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More on the service economy More on the service economy
by Joseph Gatt
2019-02-24 11:04:15
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10 features of the service economy that differ from the industrial economy we once had.

1.      Task-based pay

ser001_400If you go to a barber shop and ask how employees get paid, a lot of them in a lot of places will tell you they get paid by the haircut. That is barbers rent their seat, and get to keep whatever the client pays for his haircut. At more dishonest places the barber shop will keep the money and only allow barbers to feed on tips.

Same goes for waiters in a lot of places. They either get to keep the tips and nothing else, or get paid by the day, a percentage of how many clients came in an ate. Same goes for car dealerships, in most cases you get to keep a commission on whatever car you were able to sell. Sell three or four cars a day, you get to make a lot of money. Sell no cars, and you get nothing.

Same goes for teachers at private schools, consultants, people who work at beauty salons or even cashiers. You get paid by the number of transactions, and get paid nothing if there are no transactions. This means even if you work for a business, you are a business yourself. Get lots of work, you get lots of pay. No work, no pay.

2.      Employees and workers going to the client

Another feature of the service economy is that workers are increasingly going to the client rather than the client coming to the business. That is private schools require that teachers move to the client's home or business place to teach the class, food gets delivered to the client's home, massages and hair cuts are done at the person's home.

Other jobs require a great deal of moving around as well. Doctors now move from home to home, taxis are increasingly asked to pick up people from their doorstep, and groceries get delivered to people's homes.

3.      Average worker has over 10 jobs in his career span

One of the features of the service economy is that most people will work 10 different jobs in their careers, sometimes for the better, sometimes for worse. Factors in the job market keep changing all the time. Neighborhoods get deserted, trends change, and many jobs are of seasonal or cyclical nature.

So the average worker will spend some time in retail, before moving to the service sector, before perhaps getting a temporary job at the government, before getting a somewhat stable job in the service sector, the service sector they work in dwindles and they need to move to another service sector job, they get tired of their trade and move to something else. In healthy economies that is, people will rarely spend 40 years in the same trade, for the same employer.

4.      Employees work for several employers at the same time

You might have the employee delivering food in the morning, teaching classes in the afternoon and being a waiter at a pub in the evening. There are quite a few people who do this exact sequence at any given day.

Many people work for multiple employers in multiple trades. They will have their day job, their evening job, and their weekend job. They're either doing that to pay off debt, to save money for later, or simply because they enjoy working and want to keep working while they enjoy it.

5.      Workers alternate between 4 hour workweeks and 80 hour workweeks

Yet another feature of the service economy is how seasonal jobs can be and how workloads can change from day to day and from week to week. You might be in the translation industry, get a huge load of work with a tight deadline, and work for 80 hours in a given week. You will then spend a couple of weeks with very little work, barely working 4 hours. You will then have a busy 60 hour week, before you end up with a 20 hour week.

When I was in the teaching industry I had 30 hour months and 160 hour months. I remember September being a dead month, barely squeezing in 30 hours, and spending most days reading. July was a busy month and I had worked 160+ hours. In every industry you have busy weeks and not so busy weeks, and there's the randomness factor in all that.

The problem is in some service industries you are required to be at your desk despite having no work and no clients to serve. Some employers pay by the task, yet require their employees to be present 8 hours a day.

6.      The nature of the service changes all the time and requires new skills constantly

You might be in the restaurant business and a new recipe becomes the trend. When I was in the teaching industry teaching TOEFL suddenly became the trend, then came the GRE, then came this thing called “English conversation.” We had to adapt each time to teaching to the client's needs.

Same goes for the furniture industry, the beauty industry or the fashion industry. One rock star does something, and thousands come asking for that exact same thing.

In some cases technology is the main factor, accountants who were once happy using Excel for most of their accounting are now required to use software like Python or R. In other cases security is the main factor, as you need new ways to back up your data.

7.      Employees need a repertoire of skills

If you work in the service sector you are going to need a vast repertoire of skills. Barbers need to adjust to evolving haircuts, restaurants need to adjust to evolving special orders and food allergies, fashion designers need to adjust to evolving fashion trends, some of which disappear then come back. Whatever the trade you are in, you will need a vast repertoire of skills.

8.      Some employees are stuck in a past that never existed

Now in every industry, you have to be careful who you are hanging out with. Some people who work in your industry will invent a past that never existed. A past where you could make a lot of money in your trade and when the skill was in demand. That past never really existed, as in the past you probably would have had to work for a boss who was a bully and your patience would have been constantly tested. Don't hang out with those people.

9.      Parents and in-laws are stuck in a past that never existed

Now parents and in-laws, wives and husbands will shut up if you make a million dollars today, and keep making a million dollars a day. The service economy is the kind of economy where skills, networks and finances are built over long periods of time, 10, 20, 30 years in some cases. The faster you learn the faster you will make a lot of money.

10.  Every industry will have to adjust, including public services, schools and daycare centers

In the service industry, the economy runs 24/7. That means laws should allow daycare centers to open in evenings so parents can work and pick up their children late at night in some cases. Especially single mothers or fathers that are. The school system also needs laws that would enable parents to keep their children in school until late in the evening, in the form of clubs or study sessions. The insurance industry, tax code and banks also need to adjust, along with public transportation systems and the rest. 

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