There is much discussion related to the impact of technology on the future of jobs in America, and rightly so, but the magnitude is still to be realized. What hasn’t been discussed to the extent that it should have been is what is transpiring right now. The migration to a contingent workforce (aka independent contractors, freelancers, on-call, contract, temporary help, etc.) has escalated dramatically.
Since 2005, it is estimated that the contingent labor force has grown by more than 9 million, while the number of workers in traditional full-time arrangements has fallen by 400,000. This information comes from the Study “The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015” was conducted by Lawrence F. Katz Harvard University and NBER and Alan B. Krueger Princeton University and NBER in March 2016. This contingent labor force now represents about 16% of all jobs in the U.S.
What’s the issue? Sure, individuals get more flexibility, but with that “benefit” comes inconsistent hours, more modest wages and little ability to influence wage growth, more difficulty getting mortgates, healthcare insurance falls solely on the employee’s shoulders, and saving for retirement becomes nearly impossible, since we know that most workers only save through an employer-sponsored plan.
As we digest news today of the U.S. Q4’17 estimated GDP, remember that roughly 70% of this growth comes from personal consumption. If our workforce has less disposable income available to consume, GDP has to take a hit. We already have millions of Americans in “retirement” that are participating to a far lesser extent in our economy, which is certainly not helping growth.