The 3 Legacies Of A Middle Class Recession

In the UK, the 1980’s recession had a lasting impact on what remained of the dying Primary Sector industries - namely, coal mining and quarying. The recession wasn’t totally responsible for killing off the jobs in those sectors, but it did act as the catalyst which sped up the transition of workers from the primary sector to the manufacturing and service sectors.

The recession accelerated the structural changes already under way within the employment market and so, in time, created new opportunities and prosperity for workers in another sector.

The 1990’s recession hit the Secondary Sector (manufacturing) and became the catalyst for the loss of countless blue collar jobs and an acceleration in the shift in employment patterns from the manufacturing sector to the service based sector. The career transition and re-training of factory workers and colliery workers to become call centre workers in the North of England being a case in point.

Again, the recession didn’t cause the shift in employment patterns, but merely accelerated the trend. And over time, created improved working conditions, new opportunities and prosperity for most of the workers impacted.

The 2008-09 recession has been dubbed the “Middle Class Recession” in view of the number of ‘professionals’ laid off.

Which explains why the vast majority of ‘displaced’ clients I’ve worked with this year have been highly educated professionals - namely bankers, lawyers, accountants, management consultants, surveyors, architects etc.

But the job losses we’ve seen in the last two years will, in my opinion, NOT be completely reversed once the recovery kicks in.

Instead what we’ll begin to see over the next 3-5 years is one of the biggest shifts in employment patterns in a decade. A shift, by the way, which was already under way. The recession has, like previous downturns, merely accelerated the shift and will (just like previous recessions) create new opportunities and more prosperity after the initial pain of the recession and job losses.

Specifically, I’ll stick my neck out and predict that we’ll see an acceleration in the following 3 shifts which will become the legacy of the 2008-09 recession:

1. A Shift To A More Transient And Flexible Work Force

Approximately 25% of the individual clients I’ve worked with in the last 2 years have transitioned from permanent work to contract / consulting / freelance roles. A desire for freedom, autonomy and flexible work being some of the key drivers. Along with the obvious need to be flexible in order to secure work in a challenging market place.

Having become much leaner, organisations will over the next few years operate with a smaller number of core, permanent employees whilst utilizing the talents of freelancers to work on specific projects in a flexible fashion. That’s the future of running a business in a highly globalized, technologised market so we better get used to it.

2. A Shift To The “4th Sector”

In previous recessions, employment patters have shifted to the next sequential sector. From primary to secondary. From secondary to tertiory.

What we’ll see in the next few years is the next shift as some (not all) professional white colour workers shift from the tertiory service based sector to the ‘Fourth Sector.’

Examples of the Fourth Sector include:

- The Green Economy

- Non-Profit sector

- Venture Philanthropy

- Social Enterprise

- Ethical organisations

- Micro Finance

- Sustainable Businesses

- Corporate Social Responsiblity

This once again reflects the changing expectations of individuals looking for a greater sense of meaning and purpose in their careers, whilst also reflecting the trend amongst organisations who recognise that ‘doing good’ makes commercial sense. 

 

3. A Shift Towards The Arts, Design and Culture

We’ll also see a shift towards the arts, design and culture in the next few years within the developed economies of the world. This trend is synonymous with the increased wealth that comes with mature economies and societies.

The recession, rather than curb this trend - will in fact accelerate it as more and more individuals focus on what they really want to do, rather than what they ’should’ do.

Does that mean we’ll have droves of professionals changing careers to become dancers, singers, painters and designers? 

Not quite.

What’s more likely is seeing elements of the arts, design and culture slot into people’s “portfolio career”

For example:

- A freelance accountant who also sings on stage professionally with a theatre company

- A corporate lawyer who does some freelance interior design work whilst also being a trustee for a major charity 

- A management consultant that designs and sells home made jewellry from an online store

In my experience, the 3 elements often ‘missing’ from the careers and lives of many ‘middle class professionals’ in the west is:

1. Flexibility, autonomy, work-life balance

2. A sense of meaning or purpose

3. An outlet for creative expression

What’s interesting is that the 3 shifts mentioned above would actually create the environment to help people fill these 3 missing elements So as per previous recessions, the short term ‘pain’ felt by the work force could well lead on to greater progress and opportunities to build more satisfying careers and lifestyles.

So for all the talk about the negative aspects of the ‘Middle Class Recession’, the recent downturn may not be the curse it’s made out to be.

Instead it could well be the catalyst that transforms the careers of  a generation of middle class professionals in much the same way that previous recessions have helped generations of miners and blue collar workers transform their careers and lives.

What do you think..?

By Sital Ruparelia 

Comments

[Kimmi]

In a sense I agree with you, perhaps it is my inborn pessimistic nature here... but I think it will get worse before it gets better. And I do think that we will see a lot more people 'surviving' in the meantime. Sometimes you have to cut corners to get to where you want to be. Right now I'm in school and I'm so grateful that I found something I could do fulltime or freelance. But, in order to go to school I have to be willing to take some cuts in other areas of life. And I do. Sure it's not glamourous alternating your resting place every night. Not the coolest thing in the world to scrimp and save your pennies, but if it gets me by until I land a job! Cool! I see more and more people doing this besides me and I imagine on the repair of the economy in some ways old habits will die hard. I think we will see a lot more frugal generation coming out of this.

[Scott Woodard]

Sital,

Very interesting and insightful post. And, I think you're spot on in your assessment. However, while those affected by this "middle class recession" may seek out other models of employment, corporations and organizations will need to be flexible enough to accommodate these new models. All three of the shifts you mention will require organizations open to employing a more flexible and transient workforce, "4th sector" opportunities and support for the "creative sector".

~ Scott

[Sital]

Many thanks for commenting

@Scott, yes employers will need to adjust - but I think the changes will partly reflect how organizations will want to operate. Having a flexible workforce helps them adapt to market conditions much quicker and be competitive. Having a '4th sector' feel satisfies a changing base of shareholders, customers and employers.

And why it will take several years for this to unfold. Which takes me to Kimmi's point.

@Kimmi Being tougher before it gets better. Quite possibly yes. The 'frugal' generation is probably a levelling out of 'excess' that crept in over the last decade or so. Like our parents and grandparents' generation, we'll learn what's most to us and make sacrifices elsewhere to get what we want (just like you are doing now). Which probably isn't a bad discipline for a whole generation to learn is it? Like anything worthwhile, it will be painful in the short term, but pay dividends in the future. Best of luck with your transition.

Which leads toe

[Sital]

in the last comment, "we'll learn what's most to us and make sacrifices elsewhere"

should have read:

"we'll learn what's most important to us and make sacrifices elsewhere.."