Friday, June 3, 2011

9.1% Unemployment, Disposable Workers And Where Are Job Creators

One Year Unemployed Anniversary Let Them Eat Cake

Well the jobless numbers are in for May 2011 and the rate increased to 9.1% . When will the job creators use their continued tax breaks to hire permanent employees because there is a growing trend afoot in the United States and it is the age of disposable workers. Disposable contract workers do little to get the economy back on a solid footing.

There is a constant refrain of it is not good to raise taxes on those that would be creating jobs. We are waiting for the trickle down; the Bush tax cuts for the top income levels have been in place for years and should have trickled down in the form of permanent jobs by now. There is a new and not often talked about trend out there in the job market, disposable workers. This group of disposable workers is not the gathered on the roadside ready to do a short term construction job, but are computer programmers, project managers and recruiters. Just about every career disciple you can think of from engineers to architects is often hired on a contract basis.

Some contract workers find themselves working on 3, 6, 12 or 18 month contracts and often without medical benefits. Some job seeking network groups will see the same people cycle through 3 or 4 times after their contracts end or even before the terms are up. The reason companies are doing this is because they don’t have to count these people as part of their workforce, provide medical benefits or contribute to retirement plans. Often contract workers actually work for another firm and their paycheck comes from someone other than their work location company.  

The catch 22 for a contract worker is they answer to the powers that be of the contracting firm and the feedback from that company can get them dismissed for almost any reason. Since the company that pays the contracted employee is basically just supplying labor there is very little push back when someone is said not to be suitable for a particular task.

Can someone with a 3, 6, 12 or 18 month job outlook purchase a new car or home that has a 5   to 30-year loan commitment? It is not likely that a contract worker will be able to or want to enter into a long term financial commitment. The continued uncertainty caused by high unemployment, temporary employment and underemployment will continue until job creators start hiring permanent workers.

People with permanent jobs think, act and spent on a long term basis. An article by Gallup places the combined underemployment and unemployed rate at 19.2%. That means that almost 20% of the workforce is not participating in the economy on a normal basis. A video produced by CNN titled Barely Getting By On ‘underemployment’ shows the effects of the issue.  

So exactly what is going on here? The recession allow companies to clear the decks and now many bring in professionals to work on a project basis just like a fast food joints brings in extra help for the lunch rush and then sends them home. The extra profit from this type of labor management goes to bonuses, acquisitions or international expansion. From a long term standpoint this is a worst case scenario because it creates an environment of zero loyalty and is a race to the bottom because the employer and employed are engaged in short term behavior. The employer is planning for profit and the employee is planning for survival.

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