GigaOm's Independent Work: Another Cause of Income Inequality and Maclean's The End of the Job look at the issues around independent work and income inequality.
The key quote comes from Maclean's:
"The rise of the contract worker may also be having a more wide-scale impact than previously realized. A growing gap between rich and poor in countries like Canada has been blamed, in part, on a growing number of poor quality jobs. There’s also mounting evidence to suggest that the rise of the throwaway worker has made recent recessions more painful and longer-lasting. Temp jobs? More like a temporary economy."
Obviously Maclean's is not a big fan of independent work, and sees it as a cause of income inequality.
We don't agree.
As part of the 2011 State of Independence study we looked at independent worker income. We found median per capita income for U.S. independent workers to be roughly the same as the median per capita income for workers overall.
We also found a fair amount of income inequality among independent workers. In particular 3 overlapping groups of independent workers significantly out earn other independents: (1) older independents (55+), (2) independents who have been independent longer than 5 years, and (3) independents that are highly satisfied with independent work.
In other words, income inequality among independent workers somewhat mirrors overall income inequality.
Our explanation - which is based on our interviews and other qualitative work - is independent workers with the right skill sets and experience are thriving and are much more financially successful than those who don't. This is very similar to what is happening across the workforce in general.
Because of this, we don't see the shift to independent work as a cause of income inequality.
Instead, we think the shift to independent work is being driven in part by the same trends that are causing income inequality.
So what's causing income inequality? I think former Labor Secretary Robert Reich nails it in his book Super Capitalism.
Everyone should read this book, but his recent Financial Times article We are all going to hell in a shopping basket nicely summarizes his views. Key quote:
"At a deeper level the crisis marks the triumph of consumers and investors over workers and citizens. And since most of us occupy all four roles, the real crisis centres on the increasing efficiency by which we as consumers and investors can get great deals, and our declining capacity to be heard as workers and citizens."
What a terrific article! A society based on consumerism cannot be sustainable simply because it is not Infinite. Sooner or later, it is bound to fail. Right now, we are all starting to see the cracks and desperately trying to glue them together.
"The rise of the contract worker may also be having a more wide-scale impact than previously realized. A growing gap between rich and poor in countries like Canada has been blamed, in part, on a growing number of poor quality jobs. There’s also mounting evidence to suggest that the rise of the throwaway worker has made recent recessions more painful and longer-lasting. Temp jobs? More like a temporary economy."
I have to heartily agree with this analysis. The major indicator of this would have to be our real estate markets around the world. They have all suffered serious decline and haven't yet quite reached the 'free-fall' stage but it is coming.
If you don't employ people properly so they can get financing, how can they possibly sign up for a quarter to -half million dollar home?
Posted by: Jan | March 11, 2012 at 06:10 PM