Work isn’t what it used to bePublished 11:00pm Wednesday, November 6, 2013
By Daniel Sutter
Economists measure prosperity and progress in several ways. We use inflation-adjusted median income to measure the resources available to the typical household. By this measure, progress in American may have come to a halt, as I mentioned last week. Inflation-adjusted median household income in the U.S. in 2012 was actually 1% lower than in 1989.
Several factors suggest, however, that our economy is still generating progress and improving the quality of peoples’ lives. Today I want to focus on the changing nature of work, which is now less dangerous, less demanding, and, for an increasing number of Americans, rather quite fun, which requires a reevaluation of salaries.
Let’s start with safety. On-the-job accidents killed 23,000 American workers in 1913, compared with only 3,500 in 2009. A century ago over 3,300 miners died every year in accidents, compared with fewer than 200 now. Fatalities per thousand workers have declined by 95% in the last century. Injury rates have also fallen.
Is government regulation responsible for improved on-the-job safety? Workplace fatalities were declining for decades before the establishment of the Occupational Safety and Health Administration (OSHA) in 1970. Economists who have studied OSHA generally conclude that its effect on workplace safety has been negligible.
Jobs in mining, manufacturing and agriculture were physically demanding, noisy, hot and unpleasant, as well as dangerous. Fewer Americans today have to hold such jobs. Agriculture and manufacturing have seen sharp and well-documented declines. A century ago, agriculture employed over 30% of our work force compared with less than 1% today, while manufacturing accounted for 25% of employment in 1970 versus 9% now.
What does this have to do with income? Salaries must compensate people for taking dangerous or demanding jobs. From an individual’s perspective, this makes perfect sense. If you had to choose between two jobs that differed only in risk, you would only take the dangerous job if it paid more. Numerous economic studies document compensating wage differentials for risk of on-the-job accidents as well as undesirable working conditions.
Forty years ago many more Americans received compensation for working in dangerous or unpleasant conditions than today. As workers realize that jobs have become safer, the wage differentials decline. Thus improved working conditions mean that people are better off even with constant inflation-adjusted pay. Most Americans work in sufficient safety that dangerous jobs like commercial fishing are now the subject of TV reality shows.
Moving beyond improved job conditions, our economy is transforming many leisure or recreational activities into ways to make a living. An old saying is that the worst day fishing still beats the best day at work. Today, however, many touring sport fishing pros no longer have to choose. And if fishing for a living sounds like a deal, how about eating for a living? Most of the competitors in Nathan’s Hot Dog Eating contest televised annually on ESPN earn a living as Major League Eaters.
Fantasy sports illustrate this transformation. Over 30 million Americans now play fantasy sports, with fantasy football by far the most popular. Many players wish to win their leagues, and spend an estimated $600 million a year for information to crush their drafts or better adjust their teams during the season. This demand for information supports dozens of websites through which entrepreneurs earn a living. Most of these information providers started by doing research for their own teams, later discovered a market for their research, and now essentially make a living as football fans. This sure beats working in a hot, dirty and smelly factory.
Markets harness peoples’ natural creativity for ventures which make our lives better. The internet facilitates people seeking information or instruction to connect with providers, so aspiring private quarterback coaches, poker coaches, and dog walkers can generate enough business to earn a living. The emergence of professional sports allowed people to play games for a living, while now people increasingly can play for a living. Jobs used to be all work with salaries to compensate, but for many today the work is fun, any the money is a bonus.
Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University. Respond to him at firstname.lastname@example.org and like the Johnson Center on Facebook.