10 Predictions for 2023: No. 9 - Knowledge-Worker Leverage Backslides in 2023
In 2023, workers will temporarily lose some recently-gained leverage to their employers
(I’m making 10 predictions for 2023. Find the links to my others at the bottom of this post.👇🏿 )
If you’ve been following me for some time, you know that I believe we’re at the beginning of a generational shift of power from companies to workers.
The universal normalization of remote work has unleashed an era of unprecedented worker leverage that will not only see explosive growth in remote work but also a rethinking of knowledge work from an arrangement where workers trade their time for money to one where workers trade their output for money.
The shift started during the height of the pandemic and gained momentum into 2021 and 2022. Along the way, it was attached to different monikers... “The Great Resignation,” “Quiet Quitting,” “Acting Your Wage.”
My belief in this trend has never been stronger and yet, I predict that in 2023, workers will temporarily lose some leverage as an economic slowdown, real or perceived, slows white-collar hiring and allows corporations to reclaim some lost ground.
For workers in tech, finance, and other high-margin services businesses, those best positioned to capitalize on the long-term power shift, 2023 will see less hiring, slowed compensation growth or even declines, and some clawbacks on the perks of the last few years.
You can see it in the data.
Private sector wages in the U.S. jumped higher during the pandemic than in the previous 15 years. But they started to decrease in the second quarter of last year.
Hiring is slowing, especially in high-compensation white-collar professions such as finance and tech
Corporate leadership has been fighting against newfound worker leverage since the start of the pandemic
At least according to some markers, the bosses are not OK. Like everyone else, they’re less happy and more stressed and anxious, with less work-life balance than they previously had. They don’t quite know where the economy is headed and are often sitting in meetings where they are preparing their company for the possibility of a recession.
That uncertainty would be crazy-making for anyone. But the macroeconomic situation doesn’t quite explain what’s going on. It cannot explain, for example, why bosses remain so hellbent on getting employees back in the office when, by and large, they don’t see it as critical that they themselves do the same, according to recent surveys. That sort of discrepancy can only be explained by a renewed desire for control, of a piece with “bossism,” a term rejiggered earlier this year for the modern era by writer John Ganz to refer to bosses’ belief that they know best, or, as Ganz put it, that “the authority and power of certain people is the natural order, unquestionable, good.”
“In short, it’s a model of the kind of corporate society they wish to secure and reproduce on a larger scale: big bosses, middle-management, workers, all happily coordinated and cooperating,” Ganz wrote in April. “No unions, no pesky social movements, no restive professional managerial-classes with their moral pretensions, no federal bureaucracy meddling and gumming up the works with regulations.”
I’m making 10 predictions for 2023. Read my others below.