The Rise of the Knowledge Worker
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I’ve been a white-collar worker my whole career. Even saying “white-collar” sounds outdated considering the number of people who wear jeans and t-shirts to their office, if not pajamas when “the office” is really their kitchen table. “Knowledge worker” is the more apt term we use today.
Knowledge workers are about 50-60% of the U.S. workforce according to the Bureau of Labor Statistics. Knowledge workers are the masses of professionals working as computer programmers, web designers, engineers, lawyers, doctors, pharmacists, accountants, financial analysts, auditors, architects, scientists, academics, authors, editors, market researchers, and consultants, not to mention the management class of managers, directors, and executives.
Characteristics of Knowledge Workers
Knowledge workers have degrees and certifications from years of formal education and training. They are often found in highly technical and specialized roles. They work in physical and virtual offices, usually at a desk behind a computer screen for 8 or more hours a day. They collaborate with colleagues and customers in countless meetings, conference calls, and email exchanges. They frequently move from job to job, company to company in search of greener pastures – more rewarding roles, higher salaries and superior company culture. They seek the highly desired, if not illusive, “right fit”.
The defining characteristic of knowledge workers is that the work they perform is predominantly intellectual in nature. These professionals' jobs depend on their thinking. They are rewarded for labor of their minds, not the labor of their hands. They do create things, but their work product is more intangible than tangible. Their daily output results in lines of computer code, numbers in spreadsheets, project plans in Gantt charts, proposals, strategies, product designs, reports, sent emails, and PowerPoint presentations.
Their efforts, combined with their colleagues’, result in marketing campaigns, new pharmaceutical drugs, software programs and applications, completed consulting projects, designs for complex systems and structures, sound investment and legal decisions, and numerous other products and services that serve their customers and clients. To varying degrees we all use and benefit from what knowledge workers produce. They’re an essential part of the economy, and in their way, they contribute to society.
But describing what they actually do at work can be frustrating in its abstractness to their family and friends. It can even be frustrating to their fellow co-workers in the next cubicle over. Sometimes there is a direct line of sight from their work to a discernable product or service, but not always. Maybe not even often. Frequently their individual work is several steps removed from the customer, or fairly miniscule in its scope and real-world impact. What’s more is that many knowledge workers only indirectly serve their company’s customers. Their primary function is business administration. Their customers are internal customers. They manage, analyze, present, and exchange information with one another. They are a cog in the wheel that ensures the company itself runs smoothly, efficiently, and profitably. Try describing that to a kindergartener on bring your parent to school day.
I worked at one of the world’s largest financial derivatives exchanges for about 4 years. Derivatives play a critical role in the global economy, but explaining what a derivative is to a layperson is no easy task. Even a great elevator pitch didn’t stop people from glazing over with confusion and disinterest, and that’s before I told them what my job was. Revealing that I worked in HR and had very little to do with the functioning of the global economy turned their disinterest into something closer to an allergic reaction.
When it’s hard, or at least time consuming, to describe what you do, it’s hard to feel good about your job. Perhaps it’s because their work is abstract and intellectual in nature that knowledge workers feel compelled to derive a sense of identity and purpose from their job. It’s not their work product or the fruits of their labor that provides the meaning, it’s the career itself.
It's not their work product or the fruits of their labor that provides the meaning, it's the career itself
Family and friends might not be impressed with their job (truthfully because it's esoteric and hard to grasp), but everyone generally understands that a Senior Vice President job title means you have achieved something, and your work must be important. If your lifestyle furthers the appearance of having a big job and making an impressive salary, even better. Money is a bright line indicator of who is winning, which is why competitive people, and careerists in particular, really like it. Title, salary, lifestyle, all manifested by a career is what racks up the social status points. My job isn’t all about what I do, it’s all about me. I’m the work product.
History of Knowledge Work
Renowned management consultant Peter Drucker first coined the term "knowledge work" in 1959. Back then, knowledge workers were maybe 25% of the workforce. Today knowledge workers are not only 50-60% of the U.S. workforce, but as Forbes notes in their 2020 article, “The Year of the Knowledge Worker”, globally the world has over 1 billion knowledge workers.
Knowledge workers have come to dominate our view about what it means to work in modern culture. The iconic “Lunch atop a Skyscraper” photo might be the image we wistfully point to on Labor Day, but it’s not the image we conjure most days. The prototypical American worker isn’t the ironworker with a hard hat and lunch pail, but rather a techie with a hoodie, laptop and noise cancelling headphones.
Much of the change in how we view the American worker is due to the fact that larger, macro trends caused work itself to change. Manufacturing was a leading driver of employment growth for decades following the end of the Second World War up to about 1979. Some may nostalgically remember the “Made in America” slogans from domestic automakers in response to foreign competition in the 1980s, or the first Make America Great Again campaign of presidential candidate Ronald Reagan. These slogans were harbingers of what was to come – a 40-year decline in manufacturing as the U.S. economy shifted to service-providing industries.
Following the Second World War, America was far and away the king of production. However, when it came to research & development our capabilities were much less than our geo-political rivals. Given this gap, the focus of our innovation was placed on the science itself, prioritizing early stage R&D over manufacturing. Other countries however, focused their innovation on the manufacturing process itself, starting first in places like Japan in the 1970s, followed by China in the 1980s. A severe recession in the early 1980’s also started the trend of breaking up large, vertically integrated manufacturing. American companies retained their core competencies of design and distribution and offshored production to more cost-effective locations like China and Mexico.
For decades now, the U.S. has been innovating new technologies that get built elsewhere. This has become known as the “Apple Effect”. In the mid-2000s the technology giant was the most valuable company in the U.S and viewed as the leader in innovative technology. Even though Apple didn’t manufacture anything in the U.S., their approach was seen as the desirable business model. In this model, “valuable” activities remain in the U.S. (or home country) while the rest of the commoditized activity could happen anywhere else in the world. Anywhere else in the world labor costs were low, that is. The Apple model fed into a stigma that already surrounded manufacturing jobs – that these jobs were unskilled labor and should be outsourced to lower-wage, less-developed countries.
As manufacturing jobs moved offshore, one of the main routes to the American middle class was slowly cut off. The blue-collar job was no longer a reliable path to upward social mobility. White-collar, knowledge work became the de facto choice. As work continues to evolve and change, the jobs that fuel social mobility in the future will also certainly change.
From Offshoring to Automation
Today the imminence of AI driven automation is raising serious discussion about which jobs will become obsolete, as well as the need for universal basic income for these displaced workers. The Organisation for Economic Co-operation and Development (OECD) is a member group of 38 high income economies in developed countries. In 2016 the World Bank estimated that as much as 57% of current jobs in the OECD could be eliminated in the coming decades. Other estimates have been less dire. In the U.S., the Brookings Institute estimates that automation is threatening 25% of jobs, especially the 'boring and repetitive' ones, to quote the headline from a 2019 CNBC story.
Just because some jobs are eliminated, doesn’t mean others won’t be created in their place. As discussed in a 2020 Forbes article, the World Economic Forum estimates that automation will displace about 85 million jobs by 2025, but the future tech-driven economy will create 97 million new jobs. Currently, approximately 30% of all tasks are done by machines, with people doing the rest. However, by the year 2025, the balance is predicted to be a 50-50 combination of humans and machines.
Undoubtedly the increased mix of machines doing the work will be unchartered territory, but it’s not obvious that automation will result in as much unemployment as some worry about. To a degree history has shown us this trend before. What did the former switchboard operators, lamplighters, and bowling alley pinsetters do? Did they never work again, or did they find a job doing something else? Certainly, the loss of these particular jobs didn’t create permanent employment gaps in the labor market. However, as it was back then, whether or not the new economy’s jobs will result in desirable, “gainful” employment remains to be seen.
We’ve seen major shifts in employment before, as many economists point out. The majority of workers were once in agriculture, but following the industrial revolution and WW2 buildup, employment shifted toward manufacturing. Postwar, and in the latter part of the century, employment in industries like finance, insurance, professional and business services grew significantly. The workforce has gone from farm to factory to cubicles. It could be that employment naturally and gradually shifts from one industry to the next as our economy evolves with advances in technology. Were employment shifts 50-100 years ago slower and more predictable than they are today? Does the advent of newer, disruptive technologies today create even more uncertainty? Digital transformation, artificial intelligence, big data, and automation will continue to have a significant impact on the labor market, but will they be more disruptive than industrial revolution technologies like the steam engine, spinning jenny, power loom, coking process, fertilizers, animal husbandry, and railroads?
The New Jobs
Just how disruptive new technologies will be remains to be seen, but we do have job predictions for a 10-year time horizon. According to the BLS, jobs that are predicted to have the largest absolute declines in the next 10 years will be found in occupational groups like office and administrative support, production operations, retail, and food service. Those are jobs like cashiers, administrative assistants, office clerks, inspectors and assemblers, retail supervisors, bank tellers, and fast-food cooks. These jobs with the largest absolute declines show where the economy will potentially have displaced workers. It doesn’t take lot of imagination to envision how these jobs will be replaced by automation. We can already see the robots, and self-checkout kiosks now.
So where will these workers go? On the flip side, there will be a number of jobs in growing sectors, most notably health care, and home and personal care. Intuitively this makes sense given our aging, and ailing population. Interestingly, the top growth jobs include a mix of higher wage, higher skilled jobs like software developer, marketing analysts, and nursing professions, as well as lower skill, lower pay jobs like fast food counter workers, laborers, and landscapers.
The question is, will today’s cashier “learn to code”, or will they just move to a different cash register behind the counter of a Starbucks or smoothie bar? Will the administrative assistant become certified as a nursing or medical assistant, or decide there is no place for them in the new economy? Will the motor vehicle assembler, forced to put down their wrench, pick up a dolly to become a stock and material mover, even if that means their job doesn’t have the satisfaction of getting to build something?
For workers at risk of being displaced, there do appear to be other options that don’t require significant, or any, additional education. They may even be able to leverage transferable skills and experience. Are these options desirable? Maybe, maybe not. I wouldn’t necessarily want my job to depend on driving in 10 years. Nor would I want my employment to depend on being a teller, bookkeeper, or executive assistant. But then again, most careerists wouldn’t either. The lower skill, lower education jobs threatened by automation aren’t the ones esteemed by careerism. If the trend seems to be going in any direction, it’s that the premium on being an educated elite with rare and marketable skills is only going up.
The premium on being an educated elite with rare and marketable skills is only going up
Job Polarization
The premium on being an educated elite is something economists refer to as "job polarization". According to the St. Louis Federal Reserve, the U.S. labor markets are undergoing important long-run changes which include: 1) the decline of middle-skill occupations, such as manufacturing and production occupations, and 2) growth in both high and low-skill occupations, such as managers and professional occupations on one end, and assisting or caring for others on the other
The St. Louis Fed classifies 4 main types of occupations:
Nonroutine cognitive occupations, which include management and professional occupations
Nonroutine manual occupations, which include service occupations related to assisting or caring for others
Routine cognitive, which include sales and office occupations
Routine manual, which include construction, transportation, production and repair occupations
As a can be seen from the charts below, the employment of nonroutine cognitive occupations, aka knowledge workers, is rapidly outpacing the other occupational types.
In one last set of data from the BLS, STEM fields are projected to grow 8% from 2019 to 2029, compared to 3% for Non-STEM occupations. Median annual wages in 2020 for STEM occupations were close to $90,000, compared to a median of $40,000 for non-STEM jobs. But here’s the real kicker. Although STEM jobs are growing at a faster rate, they will only account for 6% of all occupations in 2029. Add to that the fact that approximately 45% of STEM workers hold a bachelor’s degree or higher, compared to 34% of workers in non-STEM occupations. Keep in mind that 45% number is among people who are currently employed. For entrants to the job market in the past several years, a 4-year degree has consistently been the price of entry, not just for STEM, but most knowledge worker jobs.
In the debate over just how disruptive automation will be to the labor market, I am very sympathetic to the concern that people without the appropriate skills will be displaced and lacking a home in the new workforce. However, as seen from the BLS data, many these workers will have a reasonable chance to find employment elsewhere. What is most evident to me is the growing gap between the highly educated, high wage-earning, technically advanced workers, and everyone else. More than ever, the pressure will increase not only to become a member of this knowledge working elite, but to maintain one’s status within it.
The Jobs People Want
Based on how the economy has evolved, our careerist culture ascribes value to knowledge work it just doesn’t ascribe to manufacturing and production jobs. We don’t build any more. That’s not a populist rant, that’s just a fact. But that fact does influence what jobs are in demand, and what jobs people aspire to in their careers.
Take for example the list of jobs millennials want most, according to a 2019 CNBC article: software engineer, data analyst, data scientist, business analyst, administrative assistant, product manager, financial analyst, graphic designer, software developer, and project manager. Unsurprisingly there are no blue-collar jobs on the list. There also aren’t any jobs related to health care and medical services, which are the fastest growing sectors of the economy and will have abundant career opportunities. In a careerist culture, these jobs aren’t as desirable. Making stuff and helping others, isn’t as attractive as making my career and helping me. In the new economy, it’s all about having a job, that is all about me.
For Gen Z, the list of desirable jobs is shifting to occupations like vlogger/blogger, social media influencer, and YouTuber. One 2017 study found that UK kids were turning their backs on traditional careers in favor of internet fame. Three-quarters of 6-17 year olds said they would consider some sort of career in online videos. According to these kids, the biggest job attractors were creativity, fame and the opportunity for self-expression, with money trailing in fourth place.
A 2019 study from research company Morning Consult had similar findings. Based on over 2,000 survey interviews with 13-38 year-olds, they found most young Americans were interested in being influencers. In the study, 54% would become an influencer given the opportunity, and 86% were willing to post sponsored content for money. Most surprising to me, the top reason Gen Z was interested in becoming a social media influencer was to "make a difference in the world". Maybe as Gen Xer there’s an impassable generation gap, but I can’t grasp how re-sharing memes and posting photos of the food you’re eating is making a difference in the world.
The more I learn about careers and “kids today” the bigger the generation gap seems to get. In 2019, in honor of the 50th anniversary of the first manned moon landing, Harris surveyed 3,000 kids, ages 8 to 12, divided evenly among the US, UK, and China. The poll asked kids to choose from 1 of 5 professions they wanted to be when they grew up, with astronaut being one of the choices. For US and UK kids, being a vlogger ranked top on the list, and being an astronaut ranked last. In China the results were the exact opposite.
These data are an unflattering statement about the turn our careerist culture is taking. Am I alone in thinking it’s a problem more kids want to be Kylie Jenner than Neil Armstrong? That can’t be best rank ordering of our values. It can’t be a good thing so many kids think being an influencer is actually making a difference in the world. It also can’t be the path to being a competitive player in a global economy. There’s not much I want to mimic about China’s authoritarian culture, but maybe we should consider showing our kids science experiments on Tik Tok as opposed to what they are watching now. Our kid's social media consumption seems to range from the more benign (but dumb) lip-syncing of songs, to overly sexualized videos of teens twerking, to what I can only characterize as animal abuse.
The real generation gap seems to be how Gen X has failed Gen Z as mentors and role models. A career as an influencer seems to be taking the knowledge out of knowledge worker and is another step further in the gradual dumbing down of America. Unfortunately, it's perpetuating that your career is an expression of who you are, albeit in the worst kind of way.
In Summary…
In a previous post I pondered how it came to be that the purpose of a job morphed from providing safety and security, to being one of our main sources of identity and meaning. I questioned when and why we started looking to our jobs and careers for the majority of our self-esteem needs. I link this cultural change to the rise of the knowledge worker. In thinking about today’s knowledge worker, as well as the jobs that will follow, a few things seem clear to me:
In our careerist culture, it’s not the work that provides the meaning, it’s the career itself
The pressure is increasing not only to becomes a member of the knowledge working elite, but to maintain your status within it
The coveted careers are shifting more and more to be all about one thing – me
Having a career is a laudable goal for young adults, but we need to focus them on careers that provide real value, as opposed to vapid and superficial value