of complex trade relationships that link companies with one another in global webs. It is hard not to conclude that computers have sparked revolutionary changes—not only in what is being produced and how jobs are designed, but also in the geographic distribution of work. What impact do these types of changes have on current and future generations of workers?
The use of the concept of a “new economy” (or alternate terms such as global economy) is widely accepted as a shorthand way of saying that work today is remarkably different than it was in the recent past. But in this chapter, we open this assumption to debate. If there is a new economy, what are its distinguishing characteristics? We argue that jobs have changed in profound ways. There are new technologies, organizational designs, industries, and markets. The economy has become increasingly international. These changes have introduced the need to develop new skills to fit changing opportunity structures. But what is equally true is that many aspects of the “old economy,” including the design of jobs to require limited skill, have either survived or been reproduced in new forms. After all, for every successful computer programmer who works at a company like Microsoft, one can find three poorly paid workers laboring on hamburger assembly lines at companies like McDonald’s.1 Understanding the new, the old, and the old in the new is the key to understanding the diverse needs and experiences of today’s workforce.
In this chapter, we consider some of the major changes said to characterize work in the new economy, including the decline of mass production and manufacturing work, new skill requirements, the impact of new technologies, the emergence of new cultures of control, the gradual decline of organized labor, the rise of flexible work arrangements, and globalization. In each case, we argue that there have been significant changes but also that there are persistent features that reflect the perpetuation of the old economy within the new.
A Postindustrial Society?
One of the earliest forecasts of an emergent new economy came from sociologist Daniel Bell (1973), who argued in the early 1970s that America was entering a “postindustrial” era, in which the manufacturing-centered economy of the past was being replaced by an economy directed toward the provision of services. Bell was among the first to note something that subsequently became obvious to most Americans, particularly those located in the so-called rust belt of the industrial Midwest—employment opportunities had shifted away from manufacturing to other sectors of the economy.
Exhibit 2.1 shows that in 1940 the number of employees working in the manufacturing sector in America was more than double that in any other sector of the economy, accounting for over one-third of all employment. Until 1989, the manufacturing sector remained the largest employment sector. But as the population of the United States grew during the latter part of the twentieth century, manufacturing employment did not. Today, instead of employing one in three workers, as it did in the mid-twentieth century, manufacturing enterprises employ fewer than one in ten workers.
There are various explanations for this trend. Some argue that nearly all low-skill, low-wage manufacturing work is being funneled to developing economies, while the advanced economy of the United States focuses on knowledge work and services (Fröbel, Heinrichs, and Kreye 1982). However, it is also possible to argue that this simply reflects something “old”—the continued effort of employers to find the least expensive ways to produce goods (Cowie 2001). From this point of view, manufacturing remains central to the economy; however, it now takes place on a global scale, rather than on a national one. Yet another interpretation emphasizes that the United States is unusual—the decline of manufacturing employment is more pronounced here than elsewhere. Rather than reflecting a long-term, general trend away from manufacturing, the U.S. pattern may reflect a choice by American employers to seek low-wage sites for manufacturing rather than invest more heavily in improving techniques at home (Appelbaum and Batt 1992). It may also reflect domestic economic policy choices favoring a strong U.S. dollar and the U.S. government’s tolerance of policies in countries such as China, which keep their currencies artificially low. Such policies hurt U.S. manufacturing exports and make imported goods cheaper, resulting in stagnant or declining manufacturing employment in the United States (Scott 2015). All of these processes have played a role in shaping opportunity in the new economy.
Exhibit 2.1 Trends in Employment in Twelve Major Sectors: United States, 1940–2017
Source: Bureau of Labor Statistics.
The number of manufacturing jobs has declined in the United States and other economically advanced countries, but should we conclude that we are truly postindustrial? In the new economy, manufacturing enterprises continue to employ more than 12 million American workers. This may be an underestimate, as many industrial employers make increasing use of temporary workers, many of whom are not counted as industrial workers in government statistics. Although manufacturing employs a smaller percentage of Americans than it once did, it remains a major force in the economy and creates demand for the products and services generated in other parts of the economy (Hatton 2011, Scott 2015). It is not at all clear that manufacturing employment is in an inevitable long-term decline to the point where it will disappear entirely. Rather, it remains an important but less dominant part of what is now a more diversified economy. It is also important to recognize that while the United States might view trends as “losses,” other countries, particularly those in the global south, view the movement of manufacturing jobs as “gains,” resulting in substantial economic improvements in those societies (Pandian 2017).
The fact that manufacturing opportunities have stagnated and declined in the United States does not mean that manufacturing jobs will entirely disappear. Nor does it mean that the ways of working that developed in the old economy are on a path to disappearing as a result. The practices of the old industrial economy are woven into the design of many jobs central to the new economy.
The End of Mass Production?
It is generally agreed that economic activity in the old economy centered on the production of manufactured goods (e.g., automobiles, steel, chemicals, appliances) in large quantities for mass markets. The Ford Model T is the classic example of what the American manufacturing economy produced—an affordable and highly standardized car, mass-produced by American workers in a central factory location (Chandler 1990). Coordinating hundreds (and sometimes thousands) of workers at a single location meant that employers such as Henry Ford had to develop bureaucratic management systems, complete with rigid job definitions, rules of conduct, and productivity expectations (Edwards 1979).
The dominant managerial approach of the time was to follow the practices of scientific management, which encouraged the replacement of skilled workers with cheaper, more dispensable low-skill workers, while removing discretion from the shop floor and placing it in the hands of management (Braverman 1974). Finding ways to enhance productivity through job simplification, replacing people with technology, and improving managerial control over what was happening in the workplace were all central to this approach. The assembly line epitomized this philosophy, a combination of technology and organization that harnessed workers to labor at repetitive, simple tasks. To appreciate how this affected the performance of work, consider the difference between making automobiles using highly skilled workers (as many of the first automobiles were made) and the assembly line methods pioneered by Henry Ford. Instead of relying on a skilled (and hard to replace) craft worker who controlled how the work was done, the assembly line created jobs that required very little training, involved relatively simple repetitive operations, and dictated to the worker how the job should be performed. Perhaps most importantly, the worker lost control over the pace of work, as the assembly line pushed work forward at a speed primarily determined by management. The result was the creation of legions of deskilled jobs, the dissolution of many craft skills, and a decline in the worker’s ability to control the conditions and rewards of work.
This
