The Evolution of Our Workforce

Work has historically consisted of unpaid household activities and chores, paid external work that generated wages, the bartering of products (goods or services), and profits if you were a business as well as a worker in it. What is little known, is that for centuries the total number of work hours has remained somewhat constant, at around 130,000 hours per lifetime for men and women, with only the split between paid and unpaid hours differing. Men worked for approximately 80,000 paid hours and 50,000 unpaid. Women were once the reverse of this split, when they were more confined to home activities, including child raising. In the 2020s, however, they are much closer to the male split, with 72,000 paid hours in a lifetime and 58,000 unpaid hours.

This unchanging number of work hours is a massive dilution of the proportion of work hours in a lifetime. For a man, paid working hours have fallen from 24.0% of his lifetime in the 1800s to 11.0% in the 2020s. For a woman, who has fewer paid hours and, on average, lives longer than a man, the percentage in the 2020s is 9.5% of her lifetime. And total work hours, including unpaid ones, have dropped for both men and women over those 220 years, from 37.0% of a lifetime to just 16.0%.

We now work for more than twice the number of years we used to in the 1800s—living as we do for over 80 years compared with around 38 years—but we work fewer than half the number of hours each year.

And yet, our standard of living almost doubled in the 19th century, then rose over five-fold in the 20th century, and could quadruple in the 21st century. And all due to productivity growth, as seen in the chart below.

These days, we treat household and paid work as being quite separate. Paid work now fulfills several roles. It is:

• Income for survival and for improving quality of life.
• Profit, if a household owns a business (and one in 11 do).
• A means of gaining self-esteem and socialising skills.
• Enjoyment as a vocation or challenge.

In the post-Industrial Age after the mid-1960s, households have been outsourcing chores to service industries, businesses have been outsourcing non-core service functions, and countries have been outsourcing services such as tourism, education and professional services to other countries that have become new types of imports and exports in the world of trade. No wonder it is the services sectors that are growing the fastest, both in Australia and in the OECD.

But how do we predict and make sense of a fast-changing workforce in a fast-changing economy and society? And should we fear what’s to come?

• Will we have enough workers in the future due to the ageing population?
• Will we have enough jobs due to immigration, mechanisation and the Digital Era?
• Which jobs will be lost as we move forward?
• Where are the new jobs and how are they going to be created?
• What are the industries and technologies of the future?

It is extraordinary how vulnerable we are to scaremongering. We will not run out of workers or jobs this century, but the workforce occupations and industries will certainly continue to change.

In the process of getting to where we are today, we have:

• Radically changed our mix of industries and occupations.
• Increased part-time and casual work to a third of the total workforce (to give jobs to those who can’t work full time).
• Raised real wages by over 15% per decade and by 400% per century.
• Provided two months off work each year through annual leave, public holidays and sick leave.
• Made work safer and introduced universal superannuation to help provide a comfortable retirement.

The next two charts show recent changes in the relative importance of industries and occupations.

One of the more recent evocative terms—casualisation—has carried ominous undertones, suggesting it is all bad news for workers whose lives and incomes are, or will be, a lottery ticket, and big business is once again an uncaring villain. However, this is yet again luddism reincarnated: fear of change; fear of technology; fear that incomes will be lost or reduced.

The reality is that our workforce has been in a constant state of change for centuries, and our lives, incomes and leisure have been the better for it, as the standard-of-living chart reminds us. And in the second decade of the 21st century we have, so far, created over 10 times more jobs than we have lost per five years, as the chart below shows us.

And yet, we hear from some quarters that the future is looking bleak: not enough jobs; not enough workers (due to the ageing of the population); not enough long careers (when it is the workers who are changing jobs more often than being retrenched); poorly paid jobs; the profits go to big-business owners instead of the workers (even though the owners are the workers, for the most part, via their superannuation!).

And now casualisation, as if it were a scourge. Yes, the advents of contractualism and casualisation are taking several forms, including:

• In-house workers on contracts involving payment by outputs
• External contractors on a payment by output (e.g. Uber)
• On-demand work (e.g. the gig economy)
• Franchising, involving IP and other license fees and share of profits

For those workers with little forward planning skills for jobs or no negotiating skills, we will see advisers and mentors coming to their aid, in much the same way as mortgage brokers and financial advisers emerged for house buying and financial asset planning and management. Unions should have taken up this new-age opportunity, but haven’t, and, sadly, are fading as a relevant element of the labour market. They did so in the Industrial Age, but have leaned towards resistance and luddism this time around.

No, casualisation and contractualism are not steps backwards, they are (perhaps scary) steps forward. There will be set-backs and mistakes along the way: there always are.

So, what does all this mean? In short, a new paradigm. But a job will continue to be a means of ‘paying the bills’ and, very importantly, a contributor to one’s dignity.

Ageing is a challenge with some dire predictions. However, suggesting there will be only three workers to support one aged person compared with the current six is not going to happen. We will be working much longer lives with less hours and less physical effort per year, and superannuation will be supporting the aged also, much more than now.

But what new entrants to the workforce need to know is:

• You will have a long working life with many more jobs than one or two long careers.
• But you will be working less hours each year as you progress through your working life.
• Unions won’t be around to protect you (membership is heading down to below 10%).
• You will need to be more self-reliant, think further ahead and augment your skill base often.
• The gig economy is here to stay, but with better rewards and conditions.
• You will need to think about rewards for output rather than hours (i.e. just turning up to work).
• Industries and occupations are in a never-ending but slow change in relative importance.
• Work will more than likely become more of an interest than just a necessity, as working hours in a lifetime shrink to around 10% compared with nearly a quarter of a lifetime a few centuries ago.

And perhaps a comforting constant when it comes to work and jobs: there seems always to be much the same proportion of jobs in the high, medium and low skill levels that provides opportunities for the super-bright, the ‘average’ worker and the battler/plodder. But the industries and occupations do change for all these levels. So, yet again, change is the constant.