Abstract
Almost a year after Donald Trump was elected the 45th president of the United States of America, many are still trying to understand what the election revealed about the country, its past, and what it means for the future. While some people (justifiably) focus on the socioeconomic, generational, racial, or gender divides coursing through America’s veins in hopes of making sense of the outcome, Thomas Kochan and Lee Dyer, in their new book titled Shaping the Future of Work: A Handbook for Action and a New Social Contract, point to a crucial area that intersects all of these divides: the world of work. They argue that “the deep division that was laid bare by the 2016 presidential election and by parallel developments around the world . . . is between those who have done well and see the future of work as full of opportunities and those who feel that they and their families are being left behind and are angry about their current circumstances and worried about their futures” (p. i).
This notion of a divided America is not new. America’s failure to make good on its promise as the land of equal opportunity has been an all-too-familiar refrain in both public and scholarly discourse. The call for a new social contract is also not new. For decades, leaders from various domains have talked about the need for a new social contract that addresses many of the country’s economic, political, and social issues. What is new is that we have yet to see–in this digital era–anyone endeavor to create a blueprint that proposes a way forward to a “next generation social contract” (p. 200). Kochan and Dyer fill this void. Borrowing from Jean Jacques Rousseau and other philosophers, Kochan and Dyer argue that leaders from all major sectors of society must come together to re-envision and re-enact a new social contract, which they define as “the mutual expectations and obligations that workers, employers, and their communities and societies have regarding work and employment relationships” (p. 14).
Kochan and Dyer open the book by painting a bleak picture of the past 30 to 40 years. Globalization, technological change, and a dearth of good jobs and job opportunities emerge as the major forces that have disrupted the work environment. The authors propose a long-overdue overhauling of current labor institutions and employment relations systems, explaining that prevailing policies and business models are not commensurate with the reality of the current world of work. They explain:
The main source of the challenges the work forces of today and tomorrow face is the fact that the rapid pace of globalization changes in technology and demographics has outpaced many of the public policies, business strategies, and organizational practices that were designed in an earlier era to govern work, pay, and employment relations. Closing this gap by updating these policies, strategies, and practices is essential to building a world of work where all can prosper. (p. 2)
Armed with unique perspectives grounded in more than 85 years of research across the two authors, Kochan and Dyer argue that we must look to the era of the social contract that emerged from the New Deal labor legislation of the 1930s. They advocate for leaders, particularly at local and state levels, from the key sectors of society—labor, government, business, and education—to revisit the processes by which this post–WWII social contract and labor and employment reforms, for example, social security, unemployment insurance, minimum wage, the Fair Labor Standards Act, the National Labor Relations Act, and so forth, were instituted under Franklin D. Roosevelt. These reforms are perhaps the most groundbreaking pieces of legislation to date, barring perhaps the Affordable Care Act passed under the Obama administration. Supporting workers’ interests, the reforms helped to usher in one of the strongest periods of economic progress and broadly shared prosperity the United States has seen. Kochan and Dyer highlight the contract’s key features and the role that each stakeholder group played in sustaining the investments and institutions that formed the contract, but they are keen to emphasize that the idea is not to simply replicate these processes, but to learn from them, to discern what is useful and relevant, and to adapt them to today’s knowledge and innovation-based world of work.
The latter half of the book focuses on two key areas. First, Kochan and Dyer describe major economic developments, such as globalization, deregulation, financialization, and automation, that eventually would undermine and dismantle the postwar social contract. They explain how these developments transformed the environment for work and shape the future. Second, they outline obstacles that major stakeholder groups face in taking responsibility and addressing current and future challenges. Each chapter closes with specific, actionable next steps for stakeholders. According to the authors, what enables these necessary breakthroughs is not simply business leaders adopting “high-road” strategies that yield positive returns to all stakeholders rather than just shareholders. Nor is it only unions rethinking what it means to represent all workers in ways that address their contemporary needs, or workers more proactively pursuing lifelong learning to be able to contribute in the knowledge and innovation-based economy. Indeed, these are all necessary actions. Kochan and Dyer argue, however, that in order to re-chart the course of the economy and the future of work to everyone’s benefit, all stakeholders must unite with the shared objective of solving the “market and institutional failures” that inhibit economic progress and that hold back the majority of workers today (p. ii).
Certainly a strength of this book is that Kochan and Dyer write for a wide-ranging audience in a manner that is informative but not overly didactic. This approach is likely intentional, as the authors have written this as a handbook for action (as the title suggests), and the book is part of a larger project and collection of efforts that build on their research and teaching at MIT and Cornell, respectively. Though they specifically address leaders of the major stakeholder groups on occasion throughout the book, it is clear that the ideas and messages conveyed are intended to inform the broader public. Rightly so, I would argue, as the issues and challenges presented affect the broader public. That is not to say, however, that this appeal will be well-received by everyone.
One possible critique is that some, particularly those who are subject matter experts or who have been deeply embedded in many of the challenges discussed in the book, may view Kochan and Dyer’s ideas as not radical enough or may feel that they do not address the depth of what stakeholders face. For example, in the chapter “How Business Leaders Can Contribute to a New Social Contract” (p. 73), they outline concrete steps that business leaders can take to adopt high-road strategies. Such examples are to re-examine one’s beliefs about the purpose of the firm, to learn more about high-road strategies, or to resist being a “victim of financialization” by pushing back against Wall Street–imposed pressures to adopt short-term profit maximization strategies (pp. 99–101). These suggestions, while appropriate and in many cases the desired course of action for business leaders, arguably do not address the far-reaching institutionalization and entrenchment of profit-maximization models that pervade almost every sphere in society, including the critical pillars of policy, law, and higher education. These forces run far deeper and wider than business leaders’ fundamental beliefs about the purpose of the firm. For example, increasingly, new firms face challenges such as unprecedented levels of industry concentration, heightened barriers to entry, data resource and information asymmetries, and policies promoted through regulatory capture processes that reinforce the positions of dominant incumbent firms. Often over time, these dynamics induce an isomorphism in industries, which perpetuates the prevailing, short-term, profit maximization behaviors of larger, more established incumbent firms that are beholden to Wall Street. Kochan and Dyer would likely agree that many of the issues presented are highly complex and need to be addressed through the collective efforts of multiple stakeholder groups.
Additionally, although Kochan and Dyer call for change and more collaboration among stakeholder groups, they may inadvertently reinforce “siloed” or unilateral thinking and action by stakeholders by focusing separate chapters on what individual stakeholders can do to contribute to the social contract, perhaps not giving sufficient attention to changes that must occur collectively. Perhaps future work can give more attention and instruction on how stakeholder groups might work across their respective boundaries, which is more likely to be where real and disruptive innovation occurs—at the edges, or intersections, of the spheres of society.
Further, the authors would likely make the case that this book is a “living document” (p. iii) and only the beginning of the conversation. The book appropriately lays a foundation; its primary intention is to engage and educate readers on the core premise—that we need a new social contract—and Kochan and Dyer will likely more deeply address the nuance and complexity of the challenges in subsequent editions.
In sum, Kochan and Dyer offer an alternative path to a brighter future of work. Yet, they remind us that success of future generations rests on our collective ability to reject the widely held fear that the challenges we face are outside of our control or insurmountable. Shaping the Future of Work offers a much-needed voice of hope, reason, and a way forward at a time when many find it difficult to reconcile and embrace the idea that the country’s greatest challenges lead to its greatest opportunities.