The Great Decoupling: How Workers Became Disconnected From Companies And AI Will Accelerate This Trend
I have spent almost 30 years studying organizations, work, jobs, and HR, and every year there’s a new theme. There was digital transformation, employee wellbeing, hybrid work, diversity and inclusion, women’s rights, and now AI. What’s the real direction here?
One might argue that employment and jobs are becoming “more human,” but that’s not true.
Today companies lay people off continuously with no more than an email and 4 hours notice. We abandoned DEI and topics like pay equity are almost a joke (new AI engineers make $500,000 or more). And now that CEOs talk about AI increasing “productivity” employees are more worried than ever.
In fact one trend that I see is a steady, 30+ year decline in trust. Every study from Pew to Edelman shows a decline in trust between workers and their bosses. In 2024 PwC found that only 67% of employees trust their employers overall and for frontline workers (72% of the workforce) it’s less than half.
When you look at trust in leadership, it’s far lower. In 2019 25% of workers trusted their company’s leaders: it’s now about 19% and dropping. Why the drop? During the Pandemic employee trust spiked up: now that CEOs keep talking about AI layoffs it’s plummeting.
But that’s not the big trend.
The big trend is much more significant: it’s the “decoupling” of workers from their employers. Today more than 65% of workers have side-hustles and the rate of layoff and change between employers is soaring. In fact my research shows that the average US worker will be layed off 2.5 times in their career, a number that has more than doubled in the last three decades.
Look at this chart and you’ll see all the evidence.
This chart plots many things: US GDP growth, interest rates, presidential administrations, recessions, and major regulatory events. If you read the green and light blue boxes in the middle you see a steady trend away from labor unions, collective bargaining, and legislative support for “workers.”
Rather it’s a steady trend toward what George Bush called an “ownership economy.” You own your own retirement plan (401k), companies provide you family leave and health savings accounts (shifting burden to you), and more and more programs invested in community college programs, apprenticeships, and self-driven career growth. And NAFTA and other globalization efforts outsourced many “stable” jobs.
In the 1970’s and 1980s companies themselves were more stable – they averaged 12-13 years on the S&P 500. Today it’s more like 4-5 years, as technology and global competition threatens everyone. Many see this as a good thing, but it does change the nature of work and a career.
At the moment people are freaked out about AI (I see it as a positive, not negative for workers), so the shift toward “self career management” is peaking. Just go out and get your hands on Claude, build a website, and become an influencer, entrepreneur, or software guru. Easy, right?
Well it’s easy if you have a home and some savings, but in the US more than half the working population doesn’t have more than 3 weeks of savings. So many workers now live on a treadmill, as the Michigan US Economic Sentiment goes to a 60 year low. (Add high gas prices and more inflation to this equation.)
Driving a Uber or Doordash felt liberating five years ago. Today it feels like a survival tactic, as these companies start to rule their market and push down labor costs. Everyone I talk to (even HR execs) tell me they feel like “labor” that is about to get automated. While this isn’t true, it is how people feel.
This Decoupling Was Inevitable
Now I’m not a Bernie Sanders type nor do I believe in socialism. But this inevitable process (which kind of started under Ronald Reagan) has now been fueled and institutionalized by the internet and AI. It’s very easy for companies to hire contractors all over the world and they can instrument the workplace to keep track of who’s delivering and who is not.
If you’re a nurse or in-demand machinist, plumber, or skilled trade worker you’re doing fine. But if you’re an accountant or administrative worker you may be worried. But not to be concerned, there’s Claude! Just go out and start your own gig. (i’m kidding)
And, by the way, US minimum wages aren’t keeping up. As of 2026, the federal minimum wage has remained at $7.25 for nearly 17 years (since July 2009). This is the longest period in US history without a federal increase, losing 49% of its purchasing power.
Now most people don’t make minimum wage, but you can see how the government feels about workers – it’s your problem not theirs.
How Have Workers Adapted?
Well this is obviously the topic of the decade, giving birth to MAGA. But if you look at the data it’s more nuanced. The dotted line below is inflation, and as you can see none of the US worker segments have kept up over time.
In the 1960s and 1970s, before a lot of the “decoupling” started, wages were well above inflation. Then we had the inflation shock of the 1970s and wages started to fall behind.
Low wage workers and high school grads fell behind fastest, watching their standard of living fall in the early 1980s. College grads (green) started to fall behind in the late 1990s and have plateaued since. And those with advanced degrees have done well until the year of the Pandemic (2020), and they are now slipping as well.
Despite all the recent articles about young grads not finding jobs (that’s episodic, not long term), college degrees stopped paying off almost 20 years ago. It’s sad (I graduated in 1978, fortunately), but a reality.
What Do We Do About This?
The reason I call this “The Great Decoupling” is because the big issue is not “wages vs. inflation” but how employers treat workers. Employers feel far less obligated or interested in the long term financial health of their workers. And in return, employees change jobs at 3-4 times the rate of the 1970s.
In other words, both sides have said “adios” to each other. Employers feel they can let people go with an email whenever they want, and workers are always on the hunt for the next good thing.
And the stock market and government is ok with this. Most companies see stock prices go up when they announce a layoff (that was not the fact decades ago), because most financial analysts see labor as a “cost” not an “investment.”
“We can invest in a data center that lasts 5-10 years and amortize it but all those people who run things are costing us bottom line expense every year. If we let them go we see an instant pop in earnings.”
The accounting for labor as expense goes back to the days of our agriculture economy, so I doubt it will change (even though it should).
My Experience and Advice
Ok now that you see the big picture, let’s talk about fixes.
First, I’m not a fan of massive income redistribution. People want to work, they get value out of work, and tax redistribution just creates all sorts of social and political angst. Sure if someone is disabled or impoverished we should help, but “guaranteed income” just doesn’t work. (all the experiments have failed)
Second, we clearly need to help people reskill, upskill, and educate themselves. The US education system has not fared well over these 60 years (I had a great education but my parents mortgaged the house to pay for it.) And right now the Federal Government is pushing funds to the States, which creates lots of innovative programs.
It’s sad to say that roughly 45–55% of U.S. adults do not read at a 12th-grade (proficient) level. I find that incredibly depressing as AI enters the workplace. “12th-grade reading level” ? Level 3+ proficiency in PIAA – Ability to synthesize, infer, and evaluate text. Workers below this level can read but struggle with dense documents, policy language, and multi-step instructions.” Oops, that’s what AI is all about.
Again I don’t work in primary or secondary education but if we can’t we find a way for school districts to teach kids to read, learn about history, and appreciate the finer things in life? For all the math, science, and engineering I studied I still feel my own career growth has all been about “how I think.” And that expansive thinking comes from my years of English, History, and being on the high school debate team.
AI makes these “power skills” more important than ever. Learning to “use AI” is not the literacy we need – we need REAL literacy.
And employers can do much of this. If we did a better job of motivating companies to pay for broad education (thank you to companies like Guild) it would help. And I wish the US Administration would spend more time talking and exemplifying this issue. Just pushing for more data centers, power, and AI won’t help our country thrive as a people.
Third is the topic of workforce layoffs and talent management. As an HR guru I have to say that most companies do a pretty poor job of labor force optimization. Most C-level execs I meet are always laying off, shrinking teams, or transforming the company at the same time they’re hiring like crazy.
It’s not for a lack of understanding of the issue but we have a big “management shift” that has yet to take place. Most CEOs and CFOs run their companies as if people and skills are “always available.” So they’re happy to dump a bunch of people, assuming they could hire them back if they had to.
While this makes sense financially, every layoff destroys culture, loses skills and institutional knowledge, and creates long term distrust in the workforce. I know it’s common these days, but mark my words we’re going to look back and say “these companies laying people off are just not very good at planning.”
If you think about every individual as a potential CEO (ie. talent density), you may not run your company this way. In other words, slow down the hiring, be more picky, and design your business for scale and growth, not as a place to churn headcount. Obvious stuff but not as easy as it sounds.
What Else?
The US Great Decoupling has been going on for almost 60 years, and it’s easy to say this is the natural order of our society. And when you talk with investors and many CEOs it feels like a natural trend.
In reality, it’s not quite so inevitable: every company has a choice. If you choose to run your business like a high-growth, venture-backed startup, you’ll likely follow this trend. AI companies like Anthropic and OpenAI are hiring people as fast as they can, and many of them will leave soon after their stock vests. The Silicon Valley argument that “size matters” makes this easy to justify, so it just happens.
On the other hand, long term players like Nvidia or Microsoft or Apple or Seagate in technology, Wynn and Marriott in hospitality, L’Oreal in beauty, Chevron and Exxon in energy, and many of the companies we meet with every week think long term. Yes they feel pressure to grow and quickly pivot, but they take their human capital responsibility seriously. So they avoid layoffs as much as possible and they try not to “overhire” whenever opportunities arise.
While the Great Decoupling is real, it doesn’t mean you have to run your company this way. Right now, as AI opens opportunities for total reinvention, I’d suggest you lean into the people you have. Let them help you reinvent the company – that is your real leadership challenge.
And remember that the only real appreciating asset in a business is your people. Investment in long term development, retention, and growth pays off over time. Enduring big companies understand this.
In this time of quick decisions and knee-jerk reactions to the stock market, it’s time to think long term and decide how much Decoupling is good for you. I’d suggest its in your own interest as a leader (and a job seeker) to focus on taking care of your people. They are the ones that bring you growth, value, and good ideas.
For More Information
The New World of Work in An Inflationary, AI-Impacted Economy (video)
Post-AI Labor Market Appears, How To Prioritize AI Investments, More (pod)
The Global HR Excellence Program: Join the Inaugural Cohort Now!