Economist Writing Every Day

I think the single most under-considered development in labor economics has been the revolution in the real-time measurement of labor output over last decade (although there was an interesting article recently in AEJ: Applied looking at the shift in the late 70s from standardized to variable wages within firms). A lot of ink has been spilled agonizing over why “no one wants to work” in fast food establishments for $15-$20 an hour, without appreciation for how much those jobs have been transformed by operations monitoring and management. Simply put, there’s no hiding on the line anymore. You’re either producing or you’re not and everyoone knows. Now, whether subpar performance will quickly result in termination is unclear in such a tight labor market, but you can be sure that your inadequate productivity will be quantified and communicated to you. These numbers may create a feeling of shame or inadequacy, perhaps even sufficient to make you work harder, increasing the disutility of labor faster than your earnings increase. Your prospects for advancement or a pay increase will correlate directly with your measured productivity. The spread of such indignities, previously reserved for those working assembly lines, sales, or independent contract work, are not limited to fast food:

“Workers at the plant told Bloomberg News that Tesla monitors keystrokes to track how long employees spend per task and how much of the day they spend actively working.“

⁦@josheidelson⁩ with a big $TSLA scoop https://t.co/vG2bsn84Yb

— Sean O'Kane (@sokane1) February 14, 2023

There have long been lines of work where work could be paid “piecemeal” i.e. paid per unit output. These jobs were typically limited to those where labor’s output was discrete, easily measured, and where quality could be distilled into sufficient/not sufficient categorization. Great for sewing textiles, bad for writing code or making gourmet food. When you’re working a piecemeal job you can be rewarded for high output, but it’s a double-edged sword. There’s no obscuring your contributions within the uncertainty of productivity or the efforts of others. It’s the difference between singing in a 50 person choir or playing golf. No one listening to that choir will ever know I can’t hit a note, even after dozens of performances. My fraudulence on a golf course is transparent after a single swing.

The revolution in labor measurement has all kinds of ramifications for the nature of work, management-labor relations, and the distribution of income.

1) Being watched is stressful, being measured doubly so.

2) Nobody likes being judged. Always being watched will only heighten labor skepticism and antagonism towards management.

3) Bigger rewards for higher producers can only increase income inequality even if wages rise for everyone

Better measurement could increase labor’s share of their marginal revenue product simply by reducing uncertainty and risk. This increased share, combined with greater productivity, could raise incomes for all laborers. Even under these assumptions, however, greater measurement is can still increase income inequality because it will likely reward the most productive workers more than the least.

It’s hard to usefully speculate on the exact mechanisms through which transitioning to piecemeal work affects labor. Perhaps it’s safer to just be grossly reductionist: increased monitoring and measurement of labor threaten’s every worker’s god-given right to do a half-assed job.

Worker’s, like all of us, are under-appreciated in the guile and sophistication they bring to bear when maximizing their utility. It’s not just where and when we work, it’s how we work. Some want to climb the ladder, some don’t. Some work to live, some live to work. Some jobs sustain us while we participate in high risk-reward labor tournaments in our side-hustles (music, art, indie game design, etc).

Doing a half-assed job is a tried and true strategy to living a great life if you have the tremendous fortune of living in a wealthy country. Employing half-assed workers, however, is a bit trickier and I suspect the rise in monitoring and measurement is a market response that reveals that the conflict between half-assed labor and management has never solved.

How will such conflicts be reconciled? My suspicion is that this will eventually come out as a mutually beneficial gain, on average, for all parties. Workers will be monitored and measured more tightly, which will make work less pleasant, but they will be paid more and work less. I suspect many of us would actually prefer to work 40% harder for half the hours and make double the pay. There will be people who lose in the transition, however. Every workplace has a slacker who floats from job to job, doing far less than the bare minimum, riding the wave of uncertainty that keeps their unemployment at least temporarily intact. For many occupations that strategy will cease to be viable. I’d feel bad for them…but I don’t. Maybe that makes me a grumpy old man, but if if anyone was taking bets I’d put a lot of money down that for the last 50 years it’s been mostly white men riding off the labor of others…and it’s been mostly the over-contribution of women to marginal output that has subsidized their quarter-assed counterparts.

The days of management trying to increase productivity by exhorting motivational platitudes while dangling the carrot of advancement while pretending to know who deserves credit are over. We know who’s doing the work. Which means that even if you are still formally receiving a salary, your salary will so tightly hew to your productivity that it will effectively be a piece rate. That also means, by the way, that management has no excuses anymore, either. You know who’s getting the work done. The same forces undermining a half-assed labor strategy will hopefully continue to undermine casual cronyism and discrimination as well.

But don’t worry, humans are clever. We’ll game each new system along the way. You’ll never find a more whole-assed effort than someone trying to figure out how to half-ass their job.