Are full time workers becoming a thing of the past? Trends are pointing that way.
According to a recent summary of the August 6th US Jobs report, “As of August, there were 7.9 million Americans who wanted to work full time but could find only part-time work. When these workers and people who want a job but have stopped looking are included, the total underemployment rate rises to 13.7 percent…The trend noted at the time was clear: In December 2007, at the start of the start of the Great Recession, there were 121.7 million full-time jobs and 24.8 million part-time jobs. In November 2010 there were just 111.1 million full-time jobs but part-timers increased to 27.6 million. Today, there are 117.7 million full-time jobs (a decline since the start of the recession of four million) while part-time jobs have grown by 2.6 million, to 27.4 million. Simply put, full-time jobs are being replaced by part-time ones.”
Clearly, full time workforce trends are on the decline. By 2020, somewhere between 40 to 50% of the American workforce will be contingent or part-time employees, according to outplacement firm Challenger, Gray and Christmas.
Full time jobs going the way of Detroit
The days of guaranteed lifetime work are going the way of Detroit. For workers this can be both good and bad. The good is that workers will be more valued for what they can contribute and therefore, highly sought-after skills will demand a premium. It will be less about who you are/who you know/how long you’ve been here than it will be about what important skills can you offer today. The bad news for workers is that highly sought after skills will demand a premium… As a worker you better keep your skills and mind polished to a mirror finish.
Also, we’re seeing more and more work that’s project-based. I hire you for the project, the project is over and so is your job unless I have obtained a new project. Even then, you’d better perform and have a great work ethic or I’ll just move on.
A lot of forces are coming to bear against the traditional model of companies filled with full-time, salaried employees. Telecommuting and the rise of global commerce are wiping out cubicles and the 9 to 5 workday.
Keith Hall of George Mason University’s Mercatus Center was head of the US Bureau of Labor (BLS) Statistics from 2008 to 2012. Citing the BLS Household Survey, Hall said that over the past six months 963,000 more people reported that they were employed while 936,000 of them reported they were in part-time jobs. Hall continued, “That is a really high number for a six-month period. I am not sure that has ever happened over six months before.”
Government regulation partly to blame
Another pressure bearing down against full time workers is the fact that many government regulations, most notably Obamacare, apply only to full time workers. These are variously defined under the different laws as those working at least 30 to 40 hours per week for a single employer.
Taking advantage of these trends, organizations will increasingly prefer to hire independent contractors or part time workers. As the McKinsey Global Institute puts it, “Technology makes it possible for companies to manage labor as a variable input.”
One of my questions … what about benefits? Will the new worker economy mean that more and more employees won’t have company-provided benefits? Will everyone become an independent contractor? As I discussed in a previous post, this could have major impacts on the way employees are treated and the design of new forms of “employment policies.”
The public sector isn’t immune either. Guaranteed public jobs with great benefits is on its way out. The unions are dying. Governments at all levels have overpromised and now can’t deliver. Detroit is again a prime example. My guess is that the trend will accelerate, and we’ll see smaller government workforces — with the possible exception of DC, but then again they can print money.
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