Labor Day has been around since the late 1800s when workers were working 12-hour shifts, 7 days per week just to get by.1 Because of such harsh working conditions labor unions grew in popularity and provided a way for people to organize. One such organization in 1882 became the first Labor Day Parade when roughly 10,000 workers marched from City Hall to Union Square in New York City.1 The march was, of course, unpaid time off. Eventually in 1894 President Grover Cleveland signed Labor Day into law and the American workforce now enjoys Labor Day as a national paid holiday.
The Digital Revolution
Luckily for most of us, we’ve come quite a long way since the Industrial Revolution and its abysmal working conditions. We’re now in the Digital Revolution, or what some call the Third Industrial Revolution (here’s a breakdown of the four industrial revolutions if you’re scratching your head like I was). Thanks to new developments in technology and increasing efficiency, the average American worker has increased his/her productivity by +97% in the last 35 years. This means an average worker can complete in one hour as of 12/31/18 the same amount of work that it took him/her two hours to finish as of 12/31/83.2
For entrepreneurs and C-suite execs alike this is great news! It means decreasing costs of labor (comparatively) as technology makes us more efficient, which means better bottom lines. And while we do have to be wary of technology providing exponentially more distractions in the workplace, with good working conditions and team/staff dynamics those distractions are easily mitigated.
High "Quit Level"
In my opinion, another great Department of Labor statistic is that 3.43 million American workers quit their jobs in June 2019. A decade earlier, just 1.79 million American workers quit their jobs in June 2009 (during the nation’s 2008-09 recession). A higher “quit level” is indicative of a greater level of confidence in finding a new job to replace one’s current occupation.2 I don’t mean to let on that people quitting jobs is necessarily a good thing, but the increased confidence in finding a new job means valuable talent is becoming more prevalent in the labor pool. And as an entrepreneur myself, this gives me increased confidence when determining the future growth of my team knowing there’s so much talent out there.
As the workforce and labor pool evolve overtime, entrepreneurs will also find their business being evolving or being left behind. We can already see this evolution taking place with the increase in ‘gig’ work and 1099 contractors. A study by Upwork and the Freelancers Union predicts that freelancers will be the majority of the U.S. workforce by 2027, based on growth rates witnessed in the past year.3 In fact, over a third of workers in America already do some type of gig work, despite many of them maintaining their regular jobs.4
Some are predicting the workforce of the future will be almost exclusively gig work and operate somewhat like yelp – contractors will be able to pick and choose jobs/projects (even high level ones) that may take a day or may take a year; then at the end, both entrepreneur and contractor will rate each other. Technology is reducing both cost and barriers to entry for entrepreneurs to seek out qualified contracted help, such as would take place in the previous scenario.
Just How Fast Are Changes Coming?
While I’m not confident these changes will be as rapid as tech junkies are hoping, I do think major changes in the workforce and labor pool are coming. However, with finance being such a highly regulated industry, I foresee numerous hurdles to overcome before gig work becomes our norm. And while I plan on growing and evolving with the times, I know I’ll maintain my preference for the A-Team we have here at Custom Wealth Management. Even still, as we’re celebrating Labor Day and the efforts of the American workforce that came before us, it’s fun to explore the future possibilities of our great nation!
- History.com Editors (2019). Labor Day 2019. [online] HISTORY. Available at: https://www.history.com/topics/holidays/labor-day-1 [Accessed 20 Aug. 2019].
- Dol.gov. (2019). Home | U.S. Department of Labor. [online] Available at: https://www.dol.gov/ [Accessed 20 Aug. 2019].
- Upwork & Freelancers Union (2019). Freelancers predicted to become the U.S. workforce majority within a decade, with nearly 50% of millennial workers already freelancing, annual “Freelancing in America” study finds | Press, News & Media Coverage. [online] Press, News & Media Coverage. Available at: https://www.upwork.com/press/2017/10/17/freelancing-in-america-2017/ [Accessed 20 Aug. 2019].
- Innovative Employee Solutions. (2019). Top Independent Contractor Trends to Watch for in 2019. [online] Available at: https://www.innovativeemployeesolutions.com/blog/independent-contractor-trends-to-watch-for-in-2019/ [Accessed 20 Aug. 2019].