We live in a time of rising economic polarization. Low and high-wage jobs are growing, while those in the middle are declining or “hollowing out,” not just in the United States, but across the globe. Employment used to be a reliable path to economic stability and mobility for a wide range of workers, but that is no longer the case. In 2015, almost a quarter of working Americans earned poverty-level wages, defined as equal to or less than the hourly wage that a full-time, year-round worker must earn to sustain a family of four with two children at the official poverty threshold. Workers are confronting rapid labor market changes that are eroding key features of work once largely taken for granted. Five trends are shaping economic opportunity:
1. Decline in access to jobs that provide good wages, benefits, and opportunities for many workers
2. Increase in alternative work arrangements with fewer protections
3. Decline in jobs covered by collective bargaining
4. Increased reliance on automation, including artificial intelligence
5. Declining connection to the labor market for some workers
The changing nature of work presents complex economic and social challenges that affect all workers. No single policy lever or private-sector innovation can address the challenges of improving economic security and mobility in a rapidly evolving 21st century economy. Instead, we can look to and learn from several promising strategies that can serve as building blocks for a more inclusive economy.
1. Facilitate access to work that pays well
2. Create portable benefits for workers in alternative employment arrangements
3. Strengthen workers’ roles in shaping their future
4. Leverage wage subsidies and job guarantees for America’s most vulnerable workers
5. Invest in a multifaceted strategy to improve specific growth sectors, such as care work
6. Build human capital over a lifetime
The rapidly evolving 21st century economy requires a significant investment in reimagining those policies, institutions, and norms that govern work and the work-related safety net in the United States. Philanthropy can catalyze innovation in several key ways. Government is an essential partner in fostering economic mobility, and the rapidly changing nature of work requires policymakers to innovate alongside employers and workers. Government at all levels has a stake in labor market innovations. State and local governments, in particular, may be good potential partners for advancing new strategies. And workers themselves, in addition to employers, must have a strong voice in shaping the future.