by Chris Hughes
Of all of the effects that these economic forces have unleashed, the most pronounced is the destruction of full-time jobs and the rise of contract labor, often symbolized by the Uber drivers of the “gig economy.” Ironically, technology has taken us backward and made jobs look more like what they were for most of our country’s history: poorly paid and precarious. We tend to think that the gig economy is a new phenomenon, but the mid-twentieth century was a brief interlude in a long history in which jobs were more often than not unreliable.
Before the second half of the twentieth century, work was more likely to be at home on the farm or in a short-term stint somewhere, in the kinds of jobs my grandfather had as a young man. He grew up in a small house that sat on a few acres of rocky land in northwestern North Carolina, a mile from the Virginia border. The sixth of seven children, he quit school when he was 15 to help his family grow vegetables, raise chickens, milk cows, and generally keep the family farm in order. His first experience of a “job” was close to home, seasonally dependent, and tied to the completion of small, discrete tasks. His parents paid him with food and shelter.
With historically bad timing, his parents decided to uproot the whole Hughes clan, including my grandfather’s new wife, Thelma, and move to Philadelphia to take advantage of the economic boom of the roaring 1920s. They arrived in 1929, just in time for the stock market’s collapse. For the next two years, my grandparents lived alongside 11 other people in a standalone house in Philadelphia’s Frankford neighborhood. Lacking any education or nonfarm skills, my grandfather decided that he would become a barber. In my imagination, I see a Southern kid roaming about a dense Philadelphia neighborhood waiting for a client in need, like a Lyft or Uber driver of today except with a pair of scissors in hand.
My grandfather had cut hair—he had those shears to prove it—but he had never really been a barber like the barbers I would later see as an adult. (The bowl cuts he gave me as a kid confirmed that he had failed to develop any meaningful skill.) Crammed in like sardines with his family in a new city, he learned to make do because anything that contributed to the family’s income, even a few dollars, helped.
It wasn’t just my grandfather whose life reflected the precarious nature of work at the time. In the 1930 census, only three out of the nine working-age people in my grandparents’ crowded Philadelphia household had ever earned a steady income from a full-time job. My grandfather’s brother-in-law had been a molder in the furniture industry, his brother had been a hide sorter in a tannery, and his sister was a stenographer at an insurance company. Everyone else picked up whatever gig they could find.
But then my grandfather’s economic prospects brightened, mirroring what happened to many in the rest of the country. He landed the job of country club manager and groundskeeper back home in North Carolina, which required a lot more than 40 hours a week of work but provided housing and relative stability. He was paid $30 a month (roughly $430 a month or $5,000 a year in today’s dollars), plus free board. My grandmother came as part of the “package deal” and became the sole person staffing the pro shop and food stand. These jobs brought them much-needed independence from their extended families and some stability, but it was still far from a living wage for a young family of three.
The economic growth that lifted many Americans up over the following decades did the same for my family. When my grandfather served in the Second World War, my grandmother worked in a local diner, as many hours a week as she could get. After the war, she found stable employment as a worker in a hosiery mill and worked the next 30 years as a manager overseeing the looms that made socks and hose. In the 1950s, my grandfather became a medium-haul truck driver for an oil company, and while his schedule remained irregular, his paycheck arrived every two weeks, a heartbeat of stability in the background of their lives.
My parents got their first jobs in the 1950s and 1960s. They not only enjoyed the security of regular paychecks, but also had the added benefits of employer-provided health insurance, paid sick days, vacation time, and pensions.
For the three decades spanning 1950 to 1980, most Americans, particularly white men, were able to find steady work in jobs that provided the foundation for a stable, middle-class life. Companies provided a suite of wraparound services that guaranteed stability in their employees’ lives. In 1955, a big corporation like Kodak spent $1,000 per year, roughly $8,000 today, on life insurance, retirement, sick pay, disability benefits, and vacation pay for each employee. Employees with 15 years of service or more received medical care for life, not just for themselves, but also for their dependents. This period of stable jobs and nearly full employment was a brief historical exception, but it has been burnished in our collective psyches as a golden age.
The short period came to an end as globalization, rapid technological advancements, and the rise of finance modified the nature of jobs so that they became more precarious and piecemeal. If my parents were ten years younger, my father likely would have lost his paper-selling job and been out of work, thanks to the collapse of small-town printers in the digital transition and the rapid consolidation in the industry powered by finance. He would almost certainly now be looking for a new career—or some task to get paid for—very late in life. My mother would be making less money than she did decades earlier because wages for teachers in North Carolina have not kept up with inflation, let alone today’s higher cost of living. They, like most Americans, especially those working for private sector businesses, would be falling behind at a moment in their lives when they need security more than ever. “For workers, the American corporation used to act as a shock absorber. Now, it’s a roller coaster,” the journalist Rick Wartzman writes.
When unemployed people in urban areas find themselves without jobs or marketable skills today, they do what my grandfather did. Instead of reaching for a pair of barber shears, they reach for their smartphones and register to become Lyft drivers and Postmates delivery people. TaskRabbiters pitch in to assemble furniture, rake leaves, or even stand in line to buy theater tickets or a newly released iPhone. In some cases, these contract jobs are a godsend because they help workers who only get part-time hours elsewhere to supplement their income, as laborers have done since the beginning of time. We often think of millennials in these jobs, the masters of the art of the “side hustle,” but the numbers show it isn’t just millennials doing contingent work. A quarter of the working-age population in the United States and Europe engage in some type of independently paid gig, some by choice, but many out of necessity.
People who find work through apps like Lyft and TaskRabbit get a lot of attention, but they are the tip of the iceberg. The instability that characterizes their work has spread throughout the economy as the class of low-quality jobs has grown. If you include not only independent gigs, but part-time workers, temps, and on-call workers, the number of people working in contingent jobs balloons to over 40 percent of all American workers. The blue collar jobs of yesteryear that paid decent salaries and provided benefits have declined from about half of overall jobs 60 years ago to around 20 percent today. A Princeton study found that of all the jobs created between 2005 and 2015, 94 percent of them were contract or temporary, meaning virtually every job we created in the last decade was piecemeal and the income was unreliable.
Many of these jobs of the new economy pay poorly, require flexible schedules, and do not offer the stability of benefits or guaranteed pay. People in these jobs are Starbucks and Walmart employees who barely get 20 hours of work a week, babysitters and dog walkers, consultants and delivery people. Some of these workers may get to choose when they work, but they are more often beholden to when the market is ready to employ their services. Some days they may have a boatload of customers, and others, none. (Even when they do have a lot of customers, Uber drivers make barely $15 an hour before accounting for expenses like gas, maintenance, or depreciation of their cars.) Contract and part-time workers may be able to make so
me money, but they don’t have any of the stability or the opportunity to get ahead that a traditional job brought in the middle of the twentieth century.
As contract work has expanded, wages for traditional, full-time jobs have stagnated. In May 2017, I stood on the front porch of a home in Warren, Ohio, and chatted through a screen door with a woman I will call Julie, while her daughter watched television behind her. I had come to northeast Ohio at the invitation of the Ohio Organizing Collaborative, a coalition of community organizations, faith institutions, labor unions, and policy groups, to talk with people affected by the forces that gave rise to Facebook. Julie lived in a white, traditionally Democratic neighborhood that had voted for Donald Trump. Across from her house was a deserted, half-demolished parking lot, and behind it loomed an abandoned factory. Julie seemed calm and resilient, but she was visibly exhausted. She had a job as an office manager at the local school, and her husband worked nights in a pipe factory. All around them property values were in a free fall, and there was little hope on the horizon. “We are treading water just to stay alive,” she said.
Julie and her husband had reliable work and a home, and they almost certainly were not captured in poverty statistics. But the despondency Julie exuded, and the lack of hope she seemed to have for her family, haunted me. The question, “Do you think the country is moving in the right direction?” seemed almost comically irrelevant when I asked it to open the conversation. The country had left her behind. Even if it was moving in the right direction, that wasn’t going to help her.
In many cases, automation and globalization have eliminated jobs in certain industries altogether. As I continued down Julie’s street, I struck up conversations with anyone I could find. (It helped that I was paired up with a young man from the host nonprofit who lived nearby.) In the span of a single hour’s walk on a block in America’s heartland, the effects of today’s economic forces were on full display. Three doors down from Julie, we talked to a union pipe-layer who had been automated out of his last job and was trying to get retrained. A few houses further, a woman in her fifties had just been forced to retire early from the local department store, a victim of low consumer spending and ruthless price-gouging by the Walmart down the street. None of these people were poor, but all of their wages had stagnated or decreased in recent years. Many of the houses around them had been abandoned, or were in a state of near-total disrepair, evidence of a worse fate than wage stagnation.
Automation has destroyed jobs across America, particularly in communities like Warren. The jobs that disappeared first were the ones that required manual, routine labor, like in automobile manufacturing, historically one of the largest employers in the area. The world’s largest automobile manufacturer, General Motors, made twice as many cars in 2011 as it made 55 years earlier with a third of the workforce. A single worker in 1955 made 8 cars; in 2011, 43.
To be sure, at the same time as technological advancements have destroyed jobs, they have created others, like Lyft drivers and Walmart workers. But the new jobs often require different skills, are unreliable, and pay worse. Walmart employees working less than 30 hours a week have no benefits, insurance, vacation, or paid leave, and what’s more, they are lucky to make $15 an hour. That’s a far cry from a factory worker who, at least in one region of Ohio, used to make $40 an hour or more, including the value of benefits. Automation may not have reduced the overall number of jobs, but the new jobs it has created are lower quality than the ones it has erased.
Meanwhile, globalization has similarly allowed enormous industries to move overseas. The economy of my hometown of Hickory has been decimated since furniture manufacturers moved production to China and the telecom industry downsized. These industries were the two major sources of employment when I was a kid, and they no longer exist. At the same time as robots made car assembly lines more efficient, trade agreements made it easier for the assembly of cars to move overseas. Meanwhile, private equity firms, a cousin of venture capital, bought up entire industries and squeezed short-term financial rewards out of them, caring little for companies’ long-term performance.
All of these changes have introduced a profound confusion into the American psyche about the state of the American Dream. We live in an age of overnight billionaires, where anything seems possible, but economic opportunity is fading in many of our communities. There is a hope that the immense wealth created for the mega-winners might find its way to our children. But at the same time, a deep anger is simmering—a result of the growing sense that diligent hard work is not necessarily creating all this wealth.
We may not have realized we were creating this world over the past few decades, but we did. Our actions now can perpetuate it, or we can embrace more powerful instruments to combat the inequality we have produced.
3
Kenya & Back
As a kid, I watched my parents dutifully tithe each year. They would tabulate their expected after-tax income and make a plan to give away 10 percent. Most of this money went to our church, but they set some aside to support local nonprofits and charities. They were exacting in how much they gave away and insisted that I follow their model with my $5 weekly allowance. I can remember my father regularly writing a check and stuffing it in a church envelope each week. As soon as I was old enough, I stuffed a few dollars into those envelopes once a month myself.
I took this tradition into adulthood and tithed a few thousand dollars every year out of my salaries from Facebook and the Obama campaign. And then, in the late summer of 2008, I sold $1 million of Facebook stock on the private markets. According to the math, I would need to give away $100,000 that year. I quickly realized I had no idea where I could put that kind of money with any confidence that it would make a lasting impact. A few years later, the challenge of effectively investing in the right causes became more complicated when, after Facebook’s IPO, my husband and I decided to go beyond tithing and give away the vast majority of our newfound wealth over the course of our lifetimes.
It had been one thing to invest modest amounts in inspiring organizations working on important causes. It was self-evident, for instance, that we would become donors to the movement for marriage equality, which my husband worked on full time. But as we considered other causes to support, we found that we needed to make a distinction between those that seemed worthwhile—and there were many—and the ones that were the most critical to us in particular. As we added zeros to the amounts we were giving, choosing the right organizations and leaders became much more complex, charged, and important to get right. These investments could radically reshape organizations’ trajectories and change people’s lives. We wanted to make them carefully and thoughtfully. And we wanted to get the most bang for the buck—to do the most effective good with each additional dollar of investment.
One of the causes I decided to focus on was the fight to end extreme poverty internationally. What follows is the story of the journey I went on to explore the most effective ways to be helpful—and the surprising implications that work had for the economic challenges we face here at home. It is the story of how I came to believe in the potential of cash transfers in general, and the guaranteed income in particular, to empower people to chase their dreams.
It was approaching noon, and I was nauseous, hot, and restless. I was sitting in the back of a white Land Rover, bouncing along a dirt road in northeast Kenya somewhere near the Somali border. Our caravan of a half-dozen vehicles had set out from Nairobi before dawn, bound for a desert village called Dertu.
A year before, I had read a new book advancing a theory of how to help the billions of people who live on less than a dollar a day. Written by the economist and development expert Jeffrey Sachs, The End of Poverty was a blockbuster success. In it, he argued that if wealthy countries banded together to commit a small percentage of their economic output to anti-poverty work, the global community could end extreme poverty once and for all. He made the ca
se that if we invest just enough money in a suite of social services like water purification, primary schooling, agricultural training, and rural electrification, economic development would follow. He dubbed the theory “integrated service delivery.” Working in conjunction with the United Nations, his nonprofit had chosen 12 sites in Africa, called “Millennium Villages,” to test the idea. The nomadic encampment at Dertu was one of these villages—in theory, a showpiece for what could happen if countries got serious about ending poverty. Sachs himself was in the Land Rover just ahead of ours, accompanied by several members of his team.
After driving for five hours, the caravan came to a stop amid a cloud of dust. In front of us was a collection of tin-roofed buildings with plain, brown cement walls that looked like they had grown up out of the desert along with the scrub surrounding them. The largest was long and narrow, like a barracks, and in front of the buildings was an open dirt field. A blue tarp had been set up off to the side as a kind of makeshift tent. As I climbed out of the vehicle, relieved to have two feet on the ground, a half-dozen Kenyans emerged from the shade of the blue tent and moved toward us. The women wore headscarves, and the men, standard Western clothing.
Dertu is in Kenya’s North Eastern Province, which is effectively a slice of Somalia governed by Kenya. The border between the two countries is only 80 miles away, and like many of Africa’s borders, it was drawn in the midst of the First World War with little consideration for the lives and cultures of the people on either side. The arbitrariness of the border was only outdone by the randomness of Dertu’s founding. In 1997, UNICEF drilled a well in the middle of an arid stretch of desert for nomadic tribes to use, and Dertu had grown up around it.