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A public policy perspective on the fragmentation of jobs and the end of the permanent employment era


photo credit: wolleydog

While I teach Public Policy (with a very specific focus on Canada but using cross-national comparisons to illuminate the theories), my research is not in the field of industrial policy. That said, when I was undertaking my doctoral dissertation research, I had to read and understand a lot of scholarly materials (books, book chapters, conference papers and journal articles) on industrial restructuring. The rigorous methodological approach I took to understanding the puzzle I was trying to solve (how do coupled industries respond to industrial restructuring under multiple stressors) required me to do a very thorough literature review, and many of the scholarship I explored came from the industrial and labor economics field. Industrial restructuring as a field of research has far-ranging and wide scope.

Some scholars have explored plants closure and the role of labor restructuring in industry decline. Others have examined how the shift from an industrial to a knowledge economy has shifted the focus (and popularity) of industrial plants and the erosion of jobs in these factories (there’s a lot of scholarship in the past 2 years). While I’m fluent in the literature, my work on environmental policy itself has had a somewhat tangential interest on the transformation of jobs. But my professional and personal experience has been affected by, and keeps me immersed, in this particular issue. The concept of permanent employment seems to be eroding with time, and fragmented jobs are a reality. I define a fragmented job as the sum of non-permanent employment gigs (remember, I’m not a labour economist nor is this my field of research – I’m just trying to make sense of the current state of affairs). As my friend and colleague Tris Hussey noted,

The next thing that struck me is that since 2003 (and since 2005 specifically) I haven’t had just a single job at any given time. I usually had a full-time 9 to whenever job plus several other side things going on. Why? To make ends meet. Now I don’t live high on the hog and I’ve tended to work for startups and smaller companies so augmenting my income to keep afloat isn’t really surprising. However, I think the “more than one job at a time” is more of a sign of how the economy has been shifting and changing below our feet in the past 10 years (ish). Yes, there are lots of people who do have just one job that pays enough for them to live, but I also know that I’m not alone in the world of always having to juggle multiple “jobs” to keep things on track.

This is not a rare situation, and particularly not in the academic world (unless you are on a tenured or tenure-track situation). In my own case, I have built my own academic life: I consult, I do research, I teach and I participate in scholarly life, even if I’m not tenured (I am, however, considering going on the academic job market, just to give it a go). My professional integrated (or fragmented) job situation is a choice of mine. Not everybody has that choice. Some colleagues need, as Tris mentions above, to keep 4-5 contracts at a time to make ends meet.

This is, I believe, the situation worldwide. I was reading a recent article, and I quote:

German Morales uses a vacuum to tidy up in an Alexandria, Va., house he painted. The mercurial economy has put a strain on his business. A record number of people exist on the fringes of the workforce: part-timers looking for more hours and the self-employed eager for more work.

If the statistics quoted on the article are to be believed (and I’m not one to believe statistics unless I rigorously test their reliability), the average length of time a person is unemployed rose to 40.4 weeks last month, the longest period ever, and an estimated 1.1 million Americans have given up on looking for work entirely. I wonder what the statistic is in Canada.

From a public policy perspective (and this is a question I intend to explore with my students in POLI350A Public Policy), my biggest question is – what can governments at the federal, provincial and municipal levels to improve the job situation? And is this a time where civil society and businesses need to take matters into their own hands and create more jobs, even if those jobs are contract, even if people need to have a fractured, fragmented job situation? This is a puzzle that will probably haunt me for the rest of the term, in addition to all the items on my current research agenda.

UPDATE – My friend and colleague Mat Wright had posted a link to a recent article that spoke to the decline of the permanent job, which he found, for your perusal. Thanks, Mat. I found the following paragraphs particularly haunting, and I quote:

The new world, however, is characterized by short-term jobs. You may be on contract; you may be a temporary employee; you may work part-time. But the key is that you will probably be hired for a very short period (“just-in time work” is the moniker) and then “let go when the work is done.” You will probably have to hold two or three jobs simultaneously for your entire working life. You will have no pension, no benefits, no vacations, no sick days. You will be constantly looking for work. “The permanent job, for the most part, is a thing of the past.”

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Posted in policy analysis, public policy theories.

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9 Responses

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  1. Lorne Daniel says

    This is an important conversation to have, Raul. The decline in full-time employment will lead to fundamental shifts in social structures, including families. I wonder if this shift is somewhat intentional – the corporate world, with its focus on short term stock market results, likes the ability to turn jobs on and off quickly and frequently.

  2. Wendy says

    Interesting summary of the situation.

    I think the biggest policy issue is not that this is how jobs are right now–there may not be anything that can be done about it during a time of substantial economic and industrial restructuring, globally.

    What I worry about is the lack of financial and economic literacy in the population generally. If you are not a lifer at an organization with a pension (which I think puts you in the majority of Canadians), then you have to create your own life-long plan to have enough money when you don’t want to work all the time.

    I don’t think very many people are prepared to do this. That is the problem. The concept that you need to save and invest every month is critical; that you need to live within your means and then some, also key.

    I know lots of people who prefer contract work and having several part time gigs to working at one full time job with 2 weeks vacation, and 9 hour a day shifts. So, the changing nature of work and jobs isn’t necessarily the issue. It’s that people are not prepared to look after themselves financially–that’s the issue.

  3. Steven Schwartz says

    I was just listening to a NPR story on this topic, specifically on job creation, where there seems to be no jobs or highly fragmented labour forces. What I can gleam from this is a couple of policy ideas, some are already in use in Europe.

    A) Rapid Access Job/skill training: When a force force, especially in a community with one or few main industries is suffering high fragmentation or limited employment, providing a public / private retraining program can and has worked. Pittsburg, PA is a perfect example of this. It was a heavy industry town & has good academic institutions as well. After the collapse of the Steel industry they attracted high tech companies and partnered them with, the gov., education and private sector to retrain thousands of people for a new economy that was attracted with short term tax breaks and incentives to stay in Pittsburg.

    B) The end of life long careers for all in North America started to end in the 80’s recession and never came back. Job fragmentation became outside of major cites the norm. Now it is happening in the Major cities. The problem is the current political climate keeps any real training programs from taking off.

    C) From High Schools to Universities, the focus on specialized “Majors” only leaves grads with limited employment options, while a more less focused 1st two years of university, lets say a “liberal Arts” focus then the major of choice, graduates students with a wider skill set. Allowing them to transition to new or emerging careers quicker.

    D) My idea is for universities to offer post grad short degree fast track programs. Grads can return anytime for life, to retrain in a new field. If you offer a more diverse undergrad program these, relearning modules can be done at night or full time rapidly. Allowing grads to re-enter the workforce faster. These new grads will bring experience from other sectors to new fields which will spur innovation and growth.

    I hope these helped.

  4. Wendy says

    I should add, the policy solution is probably getting curriculum into high schools; maybe a semester-long economics and finance course should be mandatory for graduation. Such courses should also be available to the general public who is beyond high school via the community college system. Maybe there is a tax policy that could be used as an incentive for people to obtain some education in this area.

  5. Briana says

    I don’t think it’s the government’s role to “create” jobs. However, there is more the government could do to make sure that all people have the social safety nets that were once only available to those who with traditional employment: health care, dental, pension, etc. I would also like to see people look beyond full time employment as a requirement for a good life. Society benefits from having people working as volunteers and unpaid community boosters. Jobs fill an important role, but let’s not forget that they serve a function (they are not an end in themselves). So let’s talk about the pressures on standards of living, and what governments can do to improve quality of life. Jobs are a piece of that, but they’re not the whole answer.

  6. JoVE says

    I think that at least in your classroom a bit of historical perspective might help. The full-time long-term job with pension, benefits, etc only existed for a significant proportion of the population for a reasonably short time, roughly post WWII to sometime in the past 10 years or so. That’ s only 50 or 60 years.

    What that suggests to me is that this situation was a historical anomaly and what we are facing now is more like the historical norm (taking into account shifts in the overall economy). In fact, globally the full-time long term job with benefits and pensions has NEVER been accessible to more than an elite minority. Factory workers in industrialized countries of the North/West might not like to think of themselves as an elite, but compared to those in the global south, they certainly are.

    The question of whether it is the government’s role to create jobs, or to create an incentive to companies to create jobs, is a political and policy question that would also benefit from a historical perspective.

    Although not in your main research field, addressing these questions rigorously in your classes will provide you students with some useful perspectives on their lives, I suspect.

  7. cliveboulton says

    The end of the permanent employment era and patriotic resistance to health care reform in the USA illustrates how public policy needs advocacy reflecting the “big shift” to “just-in time work”. The bulk of enterprise software was written for industrial full-time work — Accounting centric, HR systems (payroll, annual reviews) — and needs reworking for fragmentation of jobs instead of extending 20-30 y/o systems with hairballs of complexity. Freelancers, CoWorking, Founders and Angel Capital will lead to new systems, but the transition needs policy to avoid the disrupted revolting in a “North/West spring” (London riots etc).

  8. Julian Law says

    Just a quick note on unemployment statistics. When one observes unemployment statistics it should always be done so with a hint of caution. The populations included in these statistics often vary—therefore drastically changing the results. As an example, some unemployment statistics do not put military personal in the labour force. Currently Canada’s unemployment rate sits at 7.1% its lowest rate since 2008.

    Addressing unemployment is a tricky matter for a multitude of reasons. For example, in regards to government-retraining programs, they are often met with only limited success, partly due to their limited access. In the U.S these programs are usually employed industry wide and only if said industry is able to prove that their job displacement was due to international competition. These programs are also restricted to primary and secondary industries (tertiary industries are not included). Retraining programs, in general, are too specific and localized to properly address nation wide unemployment. As an economics T.A once described the effectiveness of retraining programs “it is like trying to kill a fly with dart”.

    Although government action may be of some assistance to this problem, its impact is limited. Industries/ jobs, which are created by the government, are often inefficient and therefore have limited potential to grow—they are usually a short-term solution. The other side of government action is tax cuts, or loans, given to private corporations. These, however, often do not yield quick results as the trickle down process takes time and sometimes will not reach the bottom.

    I have however two thoughts on addressing this issue of unemployment, and job fracturing. Where what I think should be addressed should be the supply/demand of labour.

    I) As was mentioned previously, a shift in educational focus would greatly aid this problem– specifically at the middle school/ high school level. I think it would be prudent for the next generation to be educated in basic economic principles. Key principles such as Schumpeter’s creative destruction, and the importance of technology and innovation to a growing economy should be taught. As well other basic economic principles such as sticky prices/wages, the changes in demand and supply in short and long run, a basic understanding of the structure of the Bank of Canada, etc. The fundamentals of all these principles can be taught without need for a deep understanding of math, and can easily be applicable to current events. With a basic understanding of economics the next generation will be better equipped to view the nature of the labour market and understand it to be dynamic in nature. Therefore they will be able to view the labour market with a critical perspective, instead of succumbing to mob mentalities.

    II) Information asymmetries often result in inefficiencies in the market, increased transparency of the market would significantly aid labour transitions. By this I mean better information access about the demand and supply of labour could potentially reduce the time of unemployment. Where this process could be done on a nation, regional, and municipal level. I put this idea forward because there are numerous industries that are facing labour shortages, it may be more effective to first try to employ everyone (or as many people) with existing positions– that have not been filled due to lack of information. Although this solution obviously does not address the need for labour retraining, it would seem wise to first improve the efficiency of the current system, and then address the issues that continue afterwards.

  9. cliveboulton says

    The labor shortages may be turning into 10x pay for ‘A’ employees.

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