The Death of the Social Contract and the Enshittification of Jobs

Pavlina R. Tcherneva

Economics Working Paper Archive from Levy Economics Institute

Abstract: This paper employs the concept of "enshittification"--the systematic degradation of a service or product in the pursuit of profit--as a powerful metaphor to analyze the decay of the US labor market in the postwar era. Situating this process within Hyman Minsky's theory of capitalist development, it argues that the current phase of money manager capitalism has accelerated a pervasive "bait-and-switch" dynamic that has emerged since the 1970s. The "bait" was the postwar social contract, which promised but never guaranteed economic security through tight full employment and access to good jobs for all. The "switch" was the neoliberal policy shift that dismantled labor protections, weaponized unemployment (via the NAIRU doctrine), and fostered financialization, leading to stagnant wages, precarity, and household indebtedness. The "trap" is the worker's inescapable dependency for survival on a job within a system that uses the threat of unemployment as a policy tool. The paper identifies the erosion of four key forces--competition, regulation, interoperability, and worker power, all of which held the tenuous postwar contract together--as the drivers of this enshittification. It concludes by articulating how the federal job guarantee proposal can act as a systemic circuit breaker capable of reverse reengineering the labor market. The job guarantee is not only an alternative to precarious employment and the NAIRU policy framework, but also a comprehensive de facto regulator that introduces much needed competition for labor by firms in the economy. The paper evaluates how the program can introduce countervailing forces to arrest the degradation of the labor market and establish a new standard for good jobs, thereby laying the foundation for a renewed social contract.

Keywords: Enshittification; Job Guarantee; Social Contract; Money Manager Capitalism; Labor Market Precarity; Financialization (search for similar items in EconPapers)
JEL-codes: B26 B52 E24 J01 J08 J38 J64 (search for similar items in EconPapers)
Date: 2025-11
New Economics Papers: this item is included in nep-his, nep-lab and nep-pke
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