Millennials don’t want to work in sales, reports the Wall Street Journal. They think it’s exploitative. They also hate the idea of variable compensation; they want a nice, steady job where the company takes the risk, not the worker.
The feeling that sales is exploitative is not new; people have always been uncomfortable with the idea of selling something or being sold. And, of course, many people have always been uncomfortable with the idea of variable compensation. But if companies are having a harder time finding people to take sales jobs and reworking compensation packages to decrease the commission component, that is worth noting.
It’s not entirely surprising, of course. I’ve heard people who worked in New York City’s government during the 1970s noting that there was an unusually high number of very competent senior staff at the time – refugees from the Great Depression who ended up there because it was the only place where you could get a steady paycheck. That generation was risk-averse in ways that their children were not, with a high savings rate and a permanent aversion to equity investments. It would be natural for the millennial generation to have had a similar reaction to such a brutal formative experience.
Unfortunately, they may be coming of age at a moment when the economy is moving toward more variable work, not less. Uber and similar services are making it relatively easy to employ people in a high-tech version of piecework: discrete tasks that are parceled out moment by moment, entirely contingent on demand. If the Journal’s article is any guide, it’s not what the new generation of entering workers wants. But it may be what’s available.
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In some sense, the 9-to-5 salaried position is an artifact of the industrial era. Such jobs existed before then, of course, in government offices and large institutions. But most jobs were much less defined. Armies of people worked for themselves, as farmers or traders or craftsmen, working only when there was demand and making only whatever profit they could eke out from their sales. Others were domestic servants, who had a steady salary but no steady hours.
Economies of scale created a lot of work doing routinized tasks that needed to be planned well in advance. The easiest way to coordinate this was to have set shifts of workers who showed up at the same time every day, prepared to do the same thing. The conversion of a huge fraction of the workforce to this sort of employment was a major revolution in human affairs. After two centuries, however, it seems natural.
Technology is making it much easier to do things on a smaller scale. It has taken over the coordination tasks that, say, brick-and-mortar stores and regular shifts once served. That’s a great economic advance in many ways – there were a lot of inefficiencies baked into those old systems. But it does mean that workers are going to be exposed to a lot more variability in their income than most of them were raised to expect.
Some of that will simply arise from the fact that piecework systems give greater rewards to the most productive workers, so there is greater variance in what different workers make for doing the same job. And some of it comes from more direct exposure to the market.
Firms insulate us from variations in our own performance – if you have a bad day, your colleagues pick up some slack, and vice versa, so that your income is smoothed out. Firms also insulate us from fluctuations in market demand; when it’s a rainy day at the store and no one comes in, the workers still get paid. As workers get disaggregated, they'll need to learn to do the things that employers once did for them, such as accumulate “rainy-day funds” to carry them through down cycles.
Before we get too sad about this change, it’s worth remembering what we hated about the old system. There’s a lot of nostalgia about those lifetime jobs with generous benefits, but when we had them, writers spent a lot of time bemoaning the soul-deadening nature of all that rote work, each person just a tiny cog in a huge machine. Task work carries more risk, but it also offers more autonomy and a direct connection between the work you do and the customers you’re helping.
Obviously, I’m not saying that sewing pieces for pennies is better than being a corporate VP. But that’s because it’s miserable, low-paid work, not because working inside a huge corporation is obviously superior to being out on your own. There’s no particular reason that task work has to be badly paid; it just was in the industrial era, because people who did task work were doing low-productivity jobs that didn’t benefit from the enormous economies of scale that, say, an auto plant enjoyed.
As those economies of scale have eroded, thanks to automation and trade, we shouldn’t necessarily think that those differentials will persist. Whether task work is satisfying and well-paid depends not on Uber’s software, but overall demand: how much will people pay for tasks, and how many unemployed people are around willing to take those tasks on.
That’s what should worry millennials, not whether 50 percent or 55 percent of their pay consists of a base salary.
Megan McArdle is a Bloomberg View columnist who writes on economics, business and public policy.