Apart from a few exceptions such as New York, Boston, and San Francisco, American downtowns have historically been largely inhabited by the poor and lower middle-class, whereas in Europe living in the city center is an expensive mark of social accomplishment. US cities are also designed to make room for cars, whereas our European cities are older and denser, providing little room for traffic and thus having to offer better public transportation. Finally, European cities have long been rather safe, whereas the decrease of crime in US “inner cities” (as Donald Trump likes to call them) is fairly recent[335].
It's true that American cities grew up in unique historical circumstances. The Cold War saw a push to decentralize the territory, pushing the populace away from urban centers to counter the potential effects of a nuclear war[336]. Franklin D. Roosevelt himself felt, in no small part due to his youth spent in upstate New York, that cities were unstable and subject to booms and busts, and thus should be countered with population growth away from urban centers[337].
Throughout the country, development was also guided by zoning laws that strictly separated industrial and residential spaces. This practice, known as Euclidean zoning, is quite foreign in European cities that have been mixed-use for centuries[338]. Finally, there is the racial component of US history. From the 1930s onward, mortgage lending was aimed primarily at the white population, leading to a dream of suburban homeownership that pulled investment away from what came to be seen as poor, black inner cities. The federal government encouraged this trend with the redlining practiced by the Federal Housing Administration, which gave cover to residential segregation practiced by private players[339].
And so today, with the unprecedented rise of a more urban economy, the US is becoming a bit more European. Its cities are safer, with a displacement of crime towards less urban spheres—including the cybersphere[340]. They’re investing in public transportation[341] and innovative solutions such as ride-hailing and ride-sharing[342] to make it easier for people not to own cars. They’re also confronting the challenges of higher density, fueled by sky-rocketing real-estate prices, heated discussions on zoning and construction permits[343], and fewer housing options for working families. And so the US is now discovering the specific problems that affect the working class in large cities. As the transition to the Entrepreneurial Age makes the economy ever more urban and emphasizes proximity services, it’s high time we reflect on solutions to these problems.
I use “proximity services” to refer to all sectors in which the work routine is constantly broken by frequent and direct interactions with customers—be it in retail, hospitality, education, healthcare, personal care, or last-mile logistics. Because these sectors never become truly routine, the tasks performed by their workers are difficult to standardize and optimize through scientific management—at least not in a way that is satisfactory for both workers and customers (remember the “Wal-Mart Effect”, a consequence of ill-advised Taylorism applied to retail, which led to a vicious circle of demotivated employees and lowered quality of service[344]). In turn, the impossibility of applying the recipes of Taylorism implies that those particular tasks, and the sectors in which they are performed, were never integrated into the Fordist model of the large corporation.
As a result, most proximity service sectors have remained overlooked exceptions to the norm, never fitting into the socio-institutional framework of the age of the automobile and mass production. What Richard Florida calls the “service class”[345] has always been there, serving us all every day. But since it didn’t fit with the dominant representation—that of a stable nine-to-five job in a big Fordist corporation—we never cared much for those sectors and the conditions of those working in them. It didn’t help that all the work falling in the domestic or care categories has long gone unmeasured and unrewarded, because it used to be largely performed for free by women in the private sphere. And in the US specifically, domestic work has also long gone overlooked because it was first slave work and then work performed by the descendants of slaves[346].
The reason why we should focus more on proximity services now is that in the Entrepreneurial Age they are the industry with the biggest potential for creating future jobs. The rise of ubiquitous computing and networks will lead to the disappearance of many routine jobs in services as well as in factories. But at the same time less routine jobs, those whose tasks cannot be performed without interacting with customers, are on the rise in a familiar process of Schumpeterian “creative destruction”. Since jobs in proximity services rely primarily on human interactions, they are harder to automate—like they were harder to Taylorize—and almost impossible to relocate overseas.
As a consequence, workers are being redeployed from the suburban industrial class of the twentieth century to the urban service class of the twenty-first century. Tamara Draut’s book Sleeping Giant describes the growing strength of that new American working class that doesn’t fall within our representations of work. Unlike factory workers or those occupying desk jobs in large corporations, who fought for and obtained higher wages, better working conditions and more political representation, this new working class has never been able to achieve much progress. Throughout the age of the automobile and mass production, proximity service workers have had to make do with low wages, unattractive working conditions, and unaffordable housing[347].
The government took over certain proximity sectors, for without its intervention there simply wouldn't have been enough supply in densely populated areas. Thus a part of the service class eventually managed to climb up the social ladder by joining the public sector, with the rather higher wages and economic security that came with working for the government. These luckier proximity workers include the likes of teachers (education), nurses (healthcare), police officers (law and order), drivers (logistics and transportation), firefighters (public safety), and trash collectors (waste management).
Other proximity sectors populated by the service class were deemed not critical or distorted enough for the government to take over, including retail, food, hospitality, private security, cleaning and maintenance, logistics, and a large part of child care and elderly care. Because the government didn't take charge and Taylorism couldn’t be effectively applied by the private sector (at least not without terrible side effects[348]), those sectors didn’t generate productivity gains and subsequently saw little progress in working conditions. They still inflict long and unconventional hours, low wages, harsh management, no collective bargaining, and long commutes. And this explains why proximity services are still populated with workers with the least bargaining power. As opposed to the old working class, which was generally white and rather concentrated in the now Trump-voting Rust Belt states, the new working class includes more women, people of color and immigrants[349] (including undocumented ones), all living and working in European-style large cities.
This realization provides us with a hint of the current institutional challenges. The rise of the new working class is accelerating, and the problems that it encounters are only getting worse. The current transition contributes to the clustering of everything (people, wealth, businesses) in large cities[350]. Entrepreneurs best succeed in dense cities where it’s easier to emulate fellow innovators, access critical resources and rebound following failure. And then there’s what economist Enrico Moretti calls the “multiplier effect”[351]: absent frictions and obstacles such as a cluttered housing market, the urban service class in proximity services grows at the same pace as the “creative class”—the highly qualified and entrepreneurial workers that dominate the Entrepreneurial Age.
Alas we can't simply replicate what once worked for factory workers. Indeed the industrial working class and the proximity-service working class have little in common. One is peri-urban (living near factories), the other is urban (living near the customers they serve). One is still unionized[352], the other never has been. One pulls together while working next to one another on the assembly line, the other is dispersed and l
acks opportunities to bond with other employees in the same sector. One is visible in our understanding of work (working class pride, overalls, picket lines), the other is right in front of us and yet invisible. One is relatively homogeneous in sociological terms (because of union-enforced agreements which unified status and pay[353] and geographic clustering in suburbs around factories), the other is much more diverse (from taxi drivers to Tamil and Guatemalan cooks, from receptionists and fast-food employees to bicycle delivery workers, from nurses to waiters, from child care specialists to policemen, from security guards to cleaning persons in the hotel industry). And so the way we once provided economic security and prosperity to the suburban industrial class is simply not replicable for the urban service class.
But things are changing. On the political side, Democrats are in the process of completing a radical electoral shift between the old working class and the new working class—not unlike the painful shifts made when they drifted away from the farmers, craftsmen and small business owners of the nineteenth century to embrace the cause of laborers in the new industrial world of the twentieth century[354].
The reshuffling is not without adverse consequences, as the unprecedented urban concentration of the new working class contributes to polarizing the electorate between city and country—a phenomenon that Richard Florida dubs “the most disruptive transformation in history”[355]. It is also made more difficult because the Democrats’ new urban focus leads them to shifting too much into courting the economic elite that is as concentrated in large cities as the service class[356].
The new working class was already at the heart of the coalition that brought Barack Obama to power in 2008 and 2012. His consecutive wins prove that this urban service class now has a certain weight in the electoral process, with the ability to make or break elections. Its members form a “silent majority”[357], dominated by women[358], that generally prefers Democrats. And it’s now consolidating as young people flee unemployment-ridden manufacturing areas to settle in larger cities[359]—the reason why Hillary Clinton handily won Illinois in 2016, which includes the large city of Chicago, while losing the neighboring, less urban Rust Belt.
Things are also changing on the social side. As part of emergent collective initiatives known as ‘alt-labor’, workers are attempting to secure bargaining power vis-à-vis both employers and customers—who, again, are now the most powerful party at the corporate table. Recent victories on the minimum wage front in the US[360], although limited in terms of effective purchasing power[361], were obtained through an alliance between workers and consumers. For the first time in history, service workers seem to be gaining some influence over improving their working conditions, for instance through the National Domestic Workers Alliance. Likewise, freelance workers, the upper segment of the new urban working class, are exploring new ways of organizing with the pioneering effort of Sara Horowitz’s Freelancers Union[362].
Will these prove to be hollow victories or do they foreshadow the terms of a Great Safety Net 2.0 tailored for the Entrepreneurial Age? If the city is to be the new factory floor, then we have to go through our entire social history again, with the service class organizing and bargaining with employers, the government, and customers to conquer economic security and a decent way of life. Because it's a radically different world, it calls for radical imagination—something all the more difficult because the old working class still dominates our representation of the corporate world and because it proves very hard to create good jobs in proximity services.
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The problem with proximity services
There are multiple reasons why most people find it so difficult to switch from one working class to the other. A frequent argument is that skills are different in the two worlds, so people have to train for the new jobs and learn how to become better at performing the non-routine tasks that dominate work in the urban economy (essentially, learning to be better and more caring service providers[363]). And whatever their skills, older workers find it difficult to enter a new economy: it’s a different culture, and starting at the bottom means a loss of revenue[364]. This is all a challenge on the front of workforce development—one that is currently better tackled in a country such as Germany, with vocational training in the education system, than in the other countries such as the US and France where execution of such training is poor and funding is inadequate[365].
What’s more, the new jobs for less educated workers are found more in large cities than in suburban areas. They come with harder work, long hours, seasonal hiring, off-peak hours, long commutes, and a lack of recognition. It's not that workers from legacy industries are lazy. But there's a mismatch in expectations: most simply don't see themselves doing such jobs. They prefer to stay far away from large cities as they dread harsher conditions in terms of wages, hours, housing, and transportation[366]. Why jump into the new economy if jobs there lack social recognition, strong unions, decent wages, and social benefits?
None of this even addresses the stigma for male workers that comes with entering a traditionally female-dominated field[367]. Most have not been trained, culturally speaking, for jobs that are less about making things and more about caring for people. Would a coal worker from West Virginia switch to elderly care in Pittsburgh or Washington, DC? For someone with a previous career on an assembly line or behind a desk, becoming a nurse, a child carer or even a delivery person simply doesn’t match their representation of what work is about.
During periods of transition, there has always been a mismatch between what workers expect and what employers offer. Every techno-economic paradigm produces jobs that didn’t exist before or multiplies jobs that weren’t valued in the past. Historically, because those jobs initially come without economic security and good wages women and immigrants tend to be the only ones ready to take them. In doing so they enable innovative ventures to take off and grow at a larger scale. In time, broad progress eventually makes it possible to improve the quality of jobs for the next generation of workers.
Indeed mass migration and then women joining the workforce are two reasons why the US economy has been unusually prosperous since the middle of the nineteenth century. During every techno-economic transition since then—to the age of steel and heavy engineering, to the age of the automobile and mass production, and to the age of ubiquitous computing and networks—, the US surmounted the difficulties of succeeding in a techno-economic transition by welcoming new participants into the workforce: women who had previously stayed at home and immigrants from other countries, especially those with less education who would take the lousy jobs brought about by the transition.
When the US economy transitioned to the age of the automobile and mass production, most of the new jobs on assembly lines weren’t taken by American workers, but rather by laborers who had recently immigrated from Germany, Poland, Ireland, and Italy (or were the children of immigrants from those countries). Those diligent workers willing to take any job were critical to succeeding in the transition. Had the US locked down its borders before the Immigration Act of 1924, it probably wouldn’t have become the prosperous center of gravity of those new ages[368].
The same is true in today’s China. Though it isn’t particularly welcoming to immigrants from other countries, immigration is nonetheless a massive phenomenon within China, a huge country with disparate levels of development between the coastal cities and the hinterland. The online commerce and urban logistics boom there wouldn’t be possible without the many work-hungry, less educated workers made available by massive internal migration. But it’s not easy, as regulatory restrictions to workers’ mobility turn migrating from poor Yunnan to prosperous Shanghai or Hangzhou into a challenge comparable to emigrating from Africa to Western Europe and looking for a job—any job.
Our effort at imagining a Great Safety Net 2.0 for the Entrepreneurial Age must be focused on today’s very different context. Women are now part of the workforce, hence they no longer constitute a reserve
army able to fulfill the new jobs of the day. As for less educated immigrants, the closing of borders in the West makes it impossible for them to help us succeed in the current techno-economic transition. Unlike during the previous great surges of development, we in the West don’t have a pool of workers entering the workforce with a readiness to fill the radically new jobs of the day.
On top of that, many new jobs are simply unsustainable (if not plainly illegal) due to regulations rendered obsolete by technology but that endure nonetheless[369]. The taxi industry has become an infamous example of corporatist resistance against the creation of new jobs. We could all renounce our personal car and be driven around through ride-hailing and ride-sharing platforms which would create many jobs and radically change urban mobility. But how do you create those jobs when confronted with the obsolete regulations that we inherit from the past and fierce resistance of the taxi industry? There are many cases, across many industries, in which the corporatism of existing professions slows down job creation in proximity services[370].
Beyond industrial regulations, what’s left of the Great Safety Net 1.0 also contributes to slowing down job creation in the Entrepreneurial Age. Continental Europe is the best illustration of how many jobs in proximity services are not created because of the lack of a favorable institutional context. In the US and the UK, there are many workers in market-operated proximity services. But their condition is so miserable that generous tips (and food stamps) are barely enough for them to make ends meet. In continental Europe the market has been led down a very different path: due to the higher minimum wage and more worker-friendly regulations, all of which are part of the Great Safety Net 1.0, low-skilled workers in proximity services are much scarcer than in the US or London.
The result can be felt in the day-to-day experience of using proximity services in large European cities: higher prices, longer lines, and a high propensity to seek help through illegal channels (such as hiring a nanny, often an immigrant, without a formal contract and with all earnings paid in cash). Coming from France, I quickly noticed the differences in 2015 when I moved to London. There, market-operated proximity services (that is, restaurants, delivery, cleaning services, child care, and ride-hailing) are relatively cheap as compared to continental cities such as Paris, Munich, and Amsterdam.
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