Facebook, Twitter & Middle Class Jobs

Thomas Friedman had a great piece a couple of weeks ago in the New York Times, titled Why I Still Support Obamacare. I recommend checking it out. He talks about the ACA but points out a much larger economic trend -- the disappearance of the middle class. It used to be that big companies needed lots of workers to run their businesses. Those businesses created lots of good paying, long-term, reliable jobs. Those jobs are what made up the middle class.

But more and more companies are finding that they don't need as many employees as they used to need in order to thrive. As an example, Facebook is a $110 billion company but only has 8,000 employees. GE, a more traditional company, has about 3 times the market cap of Facebook but has 40 times the number of employees. Fast growing tech companies are creating lots and lots of value but they're not creating lots and lots of jobs.

Friedman quotes James Manyika from McKinsey:

To be in the middle class, you may need to consider not only high-skilled jobs, “but also more nontraditional forms of work,” explained Manyika. Work itself may have to be thought of as “a form of entrepreneurship” where you draw on all kinds of assets and skills to generate income.

This could mean leveraging your skills through Task Rabbit, or your car through Uber, or your spare bedroom through AirBnB to add up to a middle-class income.

Friedman's point in the column is that affordable, mandated healthcare is going to be critical as more people begin working independently.

In many ways this is an exciting trend, but this shift in how people work, who they work for and the emergence of the "free agent" job market is going to have an extremely wide-ranging political and economic impact. It's something our policymakers need to be thinking about.