You can’t pick up a newspaper these days, or watch a news media broadcast that is not mentioning the problem of unemployment and job loss in the economy. For most observers, the problem is often oversimplified as a result of the recession, and we only need policies to return those jobs. The reality is that we are witnessing the end of jobs as we have known them.
Mike Dorning, in his article in Bloomberg Businessweek cites U.S. employment data that is frightening. The portion of all men holding any kind of job in the U.S. is 63.5%, the lowest figure since 1948. Among prime working-age men between 25 and 54, 81% hold jobs. In comparison in 1969, 95% of men in the prime working years had a job. The temporary placement company in the U.S., Adecco, predicts that the rate of growth in contingent workers will be 3-4 times the growth rate of traditional jobs and will soon comprise at least 30% or more of the global workforce.
Sara Horowitz, founder and CEO of Freelancers Union, argues that the jobless future is already here. She points out that many people are already combining part-time work just to get by. In an article in Atlantic magazine, Horowitz says that as of 2005, a full 30% of the workforce has participated in this “freelance economy,” and entrepreneurial activity has reached an all time high in 2010. Dana Shaw, former senior Vice-President for Staffing Industry Analysts, reported that in the Fortune 100 companies, contingent workers make up 20-30% of the workforce, but predicts it will soon be 50%. Statistics Canada reported that by 2009, 52% of all temporary jobs were contract jobs, 25% of them were professionals. The permanent full time jobs that were jettisoned during the recession are not likely to return. McKinsey &Co. reported that 65% of U.S. corporations have restructured their workforce and have no plans to return to pre-recession employment, but rather are opting for contingent and contract work when the need for expansion takes place.
Marshall Brain, writing in his informative blog, cites the explosive growth in the use of robotics–not on the assembly line but in ordinary retail businesses, including McDonalds, Home Depot, and others. Brain cites the principle of Moore’s Law–that CPU power in microprocessor chips doubles every 18 to 24 months–to support his argument that a massive number of jobs will be replaced by technology and never return. He forecasts that almost all construction, manufacturing, transportation, wholesale, retail, and hotel and restaurant jobs will be lost to automation by the year 2050. This would create unemployment levels of up to 50%.
Besides the negative impact of increased unemployment, the expansion of temporary work has other downsides. One of the biggest hurdles that will have to be overcome for contingent work to be dominant is the predominant attitude in organizations that contract workers are less important or less competent, and less committed than “permanent” workers. Contingent work also is accompanied by a lack of benefits such as health, life and disability insurance. Some experts would argue that the growth of contingent and contract jobs contributes to the growing problem of income gap between the wealthy and the rest of society, as contract workers tend to be paid less and earn less than permanent workers. People who don’t earn as much money or have less economic security tend to spend less as consumers, which has a general negative impact on the economy. A second argument, which is reflected in an OECD report, is that contingent and part-time work produces more stress for these workers, who may be continually fearful of loss of employment. This in turn, has potential health cost implications for the organizations.
Many economists argue that the current economic problem is lack of consumer demand—the lack of money to spend on stuff. But with the increasing decline of the middle class who spends most of that money, the problem won’t be solved any time soon. So while politicians and business leaders chant for more jobs, the real issue is economic inequality to support sustained growth. It’s not likely that the 45 million people at the poverty level in the U.S. will drive its economy to new prosperity.
Is there an upside to the movement toward contingent and contract work?
Daniel Pink, author of Free Agent Nation, prepared us for this scenario in 2001. Pink described the emergence of “Supertemps,”—top managers and professionals, trained at the top schools, who have chosen to pursue contract work over regular employment.
While the recession and global economic conditions may be a reason for contingent workers, increasingly more people are choosing contract work for the following reasons:
- The desire for better life-work balance;
- The opportunity to create and manage their careers;
- The opportunity to learn and master new skills continually.
Derek Sankey, reporting for the Calgary Herald, cites a Strategic Council survey, which shows 62% of Baby Boomers making more than $80,000/yr. chose contract work versus 37% who chose full time regular employment. New types of talent brokers such as Your Encore, an online network of retired and veteran scientists and engineers, or Innocentive, which offers crowdsourcing services to companies with innovation challenges, connects free agents with project-based work in the virtual marketplace or Guru.com and Freelancer.com which provides opportunities to buy and sell professional contract work.
The growth of contingent and contract work is also related to how work is viewed conceptually. The fast-moving, technologically dynamic global economy has forced leaders to think about work in modular, every shifting ways. Organizations that can adapt, change and innovate quickly have an advantage today. Contingent and contract workers can facilitate this change.
Josh Bersin, President and CEO of Bersin & Associates, a talent management company, wrote a insightful article on the issue, arguing, “jobs are turning into roles, roles are becoming more specialized and the new currency of value is expertise, not simply experience.” How we have envisioned what a job is history. It was a functional role defined by a set of skills, or competencies that carried out a specific function, and along with it came a title and career path that was clearly defined. Job descriptions were written and people were hired to them and the HR function was created to manage the process. Bersin has coined the term “the borderless workplace,” which means workers work seamlessly inside and outside organizations, adapting to change in world conditions.
Penelope Trunk, writing in her popular blog on the workplace, contends that we will see the end of what we conceive of as “office life,” within a short time and that employers will increasingly view all their employees as “consultants” to facilitate flexible hours and project based work; and we will see the end of the traditional career path and organizational hierarchies.
Douglas Rushkoff, author of Life Inc: How the World Became a Corporation and How To Take It Back, was interviewed by CNN.com. He proposed the notion that jobs are obsolete. He argues that it’s not a bad thing that technology is replacing jobs. Part of the public discourse has focused on employment as the solution to economic growth, but countries have in fact focused on productivity through technology not human labor, Rushkoff contends. The U.S. and Canada is productive enough to provide everyone sufficient shelter, food, education and health care without increased employment. The problem is the proceeds of productivity–economic wealth–are not equitably distributed. The U.N. Food and Agriculture Organization reports that there is enough food produced in the world to provide the entire world’s population with 2,720 calories per day. Yet every 6 seconds a child dies from malnutrition.
So is the problem that we don’t have enough “stuff” for everyone or that we don’t have enough ways for people to work and prove they deserve the stuff?
Let’s remember that the concept of jobs is a relatively new idea. People may have always worked, but until the advent of corporate business in the Renaissance, most people worked for themselves. The advent of the Industrial Age made most jobs as menial and unskilled as possible. As technology in factories was used to increase production and use less labor, so too has digital technology supplanted jobs. One of the biggest problems we face today is how to create full employment while pursuing technology that is intended to replace it.
Most work today is knowledge work, not making stuff. Knowledge work is a creative activity. Part of the issue of resolving the job-work issue is accepting basic human rights about essential stuff–food, shelter and health–and focusing work on the value we create that makes life meaningful, purposeful and fun.
One thing is for sure, the problem of unemployment and our view of work and jobs is undergoing a revolution, not just a minor hiccup or temporary recession.