Americans have become too complacent and too immobile, writes economist Tyler Cowen. To recapture our ability to succeed, we will need to embrace change.
The Future of Work

Stop being complacent and start winning again

Disruption has been the story of the decade. But there’s another story that most people are missing. It involves stagnation and becoming complacent. You wouldn’t know it from reading the breathless news coverage of how Silicon Valley is supposedly upending all of our worlds, but the hard facts show that Americans actually have become more risk averse and more set in our ways in recent decades. We have become more segregated. And we have lost the pioneer spirit that made America succeed as the world’s most productive and innovative economy.

Peace and high incomes tend to drain the restlessness out of people.

In short, many Americans have joined what in my new book I call “The Complacent Class.” To break the destructive habits we’ve formed as a society, we will need to understand where this complacency come from — and we will need to embrace innovation, change, and mobility to get ourselves out of our collective rut and back on track.

Here’s how to succeed, in life and in your career, in a complacent America.

Here’s how we got into this mess — and how we can get out of it.

We’re stuck at home

I see complacency as the single biggest emerging problem in American life. Americans are working harder than ever before to postpone change, or avoid it altogether. The truth is that peace and high incomes tend to drain the restlessness out of people. For all the revolutionary changes in information technology, big parts of our lives are staying the same.

These days, Americans are less likely to switch jobs, less likely to move around the country, and, on a given day, less likely to go outside the house at all.

For instance, the interstate migration rate has fallen 51% below its 1948-to-1971 average and has been falling steadily since the mid-1980s. You might think that information technology would make it easier to find a job on the other side of the country — and maybe it has, but that has not been the dominant effect. If anything, Americans have used the dynamism of IT to help ourselves stay put, not to move around.

We’re stuck at work

The data also show that job transitions are down. Despite talk of a “gig economy,” individuals are more likely to spend a long time with a single employer than ever before. In 1998, 44% of workers had five or more years on the job, but as of 2014, this number had increased to 51%. The percentage of workers with less than one year on the job had fallen from 28% to 21%. Partly, this is because America’s workforce is aging. But America’s employers have also put more emphasis on retaining workers, given how specialized many jobs are becoming. This specialization also makes it harder for employees to switch jobs.

There also has been a decline in the number of start-ups, as a percentage of business activity, since the 1990s. America is creating start-ups at lower rates each decade, and a smaller percentage of those start-ups rise to prominence. There are fewer unicorn miracle growth firms, there is less corporate churn and turnover of new firms replacing older firms, and there is a higher market concentration in the sectors where we can measure it.

The average American is older than ever before, and so is the average U.S. business.

Matching makes it more difficult to succeed

Digital culture is making us all ‘matchers.’

‘Matching’ is making us less dynamic

On top of our geographic and employment stasis, there is also much more pairing in our society today of like with like — known as “matching.” This applies to everything from marriage to the associations we join to the income levels of the neighborhoods in which we live.

Better matching has a big influence on many parts of American lives. For instance, in the 1930s, one study showed that over a third of urban Americans married people who lived within five blocks. But for couples who married between 2005 and 2012, more than one-third of them met online. A side effect of this is that people are much more likely to marry someone of their same educational or income level — because they’re fishing from a bigger pond.

The exact same sort of matching has come to define the workplace. More and more of the top talent is being clustered in the largest and most successful firms. Meanwhile, America’s productivity problem is coming from small and medium-size enterprises, not the market leaders.

Technology has made it easier for better corporations to identify those workers with stronger skills, more demanding work ethics, and higher intelligence. And it’s made it easier for workers to identify the best companies. This results in a kind of segregation of the skilled, hardworking, and smart. This is good in some ways, but the downside is that the less-skilled workers rarely get a chance to learn from the best.

Corporate culture has grown complacent

This new segregation has mostly been great for Silicon Valley. A troublemaker can’t just show up at Google and set up a desk and start working. The top American businesses enforce very selective standards for hires. And of course it’s not enough to be good at your job. If a job candidate is suspected of being incompatible with the “culture,” he or she faces a very tough uphill climb.

American businesses go to great lengths to measure the cooperativeness of potential employees. To do this, they often check job candidates’ credit scores — theoretically a measure of trustworthiness. This is now happening for about 60% of all hires.

Big data is also being used in other ways to ensure a compliant workforce. One recent study by Xerox found that employees who belong to one or two social networks are likely to stay in their jobs for a longer time period than individuals who belong to four or more social networks. That correlation is now part of how Xerox thinks about hiring and building a cohesive community of workers.

We’ve stopped being able to see the individual

As I think you already can sense, all the talk of “business morale” is often code for a kind of profiling. Imagine you’re someone whose previous job required you to sign up for every major social media account. Or imagine you’d been stalked and had to cancel all of your social media accounts for that reason. I can assure you the hiring software at Xerox could not care less, because it will never know or grasp the details of your individual case.

That’s the other downside to all of this. For all the benefits produced by the elite tech firms, in the longer run, a lot of businesses will end up less innovative. The best workers will get pulled into a relatively small number of companies and sectors.

That’s been the story of America over the last few decades, as the productivity of the country’s small and medium-size businesses has been underwhelming.

What you can do: Embrace change

Matching’s downsides in the realm of finding music or restaurants may not feel like such a big deal. Who cares if I don’t discover new food or music if I like what I’ve chosen. But in the case of work, the costs make people’s lives worse.

So, what can any of us do as individuals? At the most basic level, it’s really pretty simple: Be open to change.

There is good evidence that individuals have a massive psychological bias in favor of the status quo. So, if you are even thinking about making a change, go for it. Move to a new city. Learn a new skill — particularly if it’s one that will improve how you work with data and information technology. Be open to a wholesale career change.

And your openness to change shouldn’t be limited to you as an individual. Think about how your company is hiring: Is it looking for cookie-cutter candidates who check off all the right boxes — square pegs to fit into square holes? Or are you looking for unique, well-rounded individuals who can truly break the mold and lead the way to real innovation.

America has grown complacent. You can’t be if you hope to succeed.

Tyler Cowen is the author of the new book The Complacent Class: The Self-Defeating Quest for the American Dream, from which this essay is adapted.

The Complacent Class book cover