The early 21st century has witnessed a sea change in the nature of employment and in the shape of the corporation in the United States. Employment has shifted from the career, to the job, to the task. In this paper, Jerry Davis argues that the death of the career and the rise of the gig economy are directly connected to changes in the shape of the American corporation—and that policymakers must recognize these shifts if they are to succeed in fostering job creation in 21st century America.
For most of the 20th century, the balance of power in American corporations favored management and labor, while dispersed shareholders were treated as junior partners. This coalition supported the postwar boom, in which corporations provided stable long-term employment, health and retirement benefits, and opportunities for upward mobility. However, widespread takeovers in the 1980s signaled a shift in power toward shareholders at the expense of labor.
As the pursuit of shareholder value became the primary purpose of corporations, organizational objectives became increasingly detached from the creation of employment, and the shape of the traditional corporation shifted significantly. Corporations with tiny employment rolls and assets, such as Facebook, now achieve vast market capitalizations, while large employers, like Kroger, often have modest market caps.
Chosen excerpts by Job Market Monitor. Read the whole story at Capital markets and job creation in the 21st century | Brookings Institution