King Cnut and under-employment

I was considering the question of the current jobs market and the issue of unemployment.

Edinburgh, where I live, has many high grade jobs paying well with many benefits.  Professional services, the banks, and insurance companies all offer many high paid jobs.

There is some ridiculous stat that over half the houses worth more than £500,000 in this city are owned by someone who works for one of the banks!

But the jobs market is changing.  There is an underclass developing of workers on short term contracts or relatively low paid staff working for small businesses in outsourced jobs - in roles that might previously been done as a permanent contract with a large company.

I read a few years ago that the world of work in the 21st century was headed this way.  Large companies would consist of an uber class of top managers, technical and professional specialists and a rump of core, well regarded workers.  Other people would be self employed, outsourced (ie the same for less) or contract workers - which sometimes, but not always, will be well paid.

Well, I think this day has already arrived, well and truly!

In Edinburgh the retrenchment of the Life and Pensions industry (driven by technology, regulatory change and the un-bundling of investment management, administration and product development) and the tsunami that has swept over the banks, has speeded up this change.

Industry and economies change!  Ask the Stevedores of the Port of London what difference containerisation made and how greater and greater tonnage could be handled by fewer and fewer men.  We cannot be too much of the King Cnut when setting economic and industrial policy!

As a result of both changing industries and economic conditions, Edinburgh is now festooned with short term contract and outsourced work.  Sometimes it pays well and sometimes it pays no better than doing the role is a permanent employee - perhaps without the pensions and benefits (or money in lieu) and all the risk is on the employee's side!

I have even heard tell that if you accept a contract through an employment agency and leave because a permanent job comes up elsewhere (or a better contract) the agency may make you pay them their monthly cut of your fee from the employer!!  This means, not only is the risk on the side of the employee but they are also tied in if they get the opportunity to get a permanent job somewhere!

Of course, contracts and outsourced roles can work for people too.  It could create an opportunity to develop an important part of your CV, it could pay more money if you get a good one and it could be the gateway to a more permanent job!

Jobless recovery?
It seems to me today we have something of a jobless recovery.  The private sector is doing its best to replace roles but, as someone said to me in the pub recently, 'they've got a new job, but a crap job!'

I've heard of people being made redundant and going on to do some similar work with a small firm on as little as half of what they got paid before!

I've also heard of people leaving big companies to work stacking shelves in Tesco or to drive a Taxi.  Nothing wrong with that unless it breaks the heart of the worker, fails to provide them with the money they need to get by, and leaves their career and hopes and dreams shattered into tiny pieces all over the ground!

This is under-employment - and it is a big problem in the UK today!

These part-time, contract and smaller roles have helped us deal with unemployment.  they have helped keep the numbers down to 2.5m unemployed - fewer than many commentators expected in 2008 when the economy went into meltdown!

But the stats mask the truth that unemployment is far worse - or under-employment I should say!

I think we know that part-time work has increased during the recession but more work needs to be done on quantifying under-employment.

I read a short German study that highlighted that the psychological effects of under-employment mirror those of unemployment - low self esteem, loss of confidence, an increase in rates of depression or anxiety, lives broken and seeped in disappointment.

Of course, those who adapt do best and this need only be a passing phase for many on their journey - maybe saving them from waking up and finding they have occupied the same corner of some office for 20 years!  But adaptation does not come to all and, I think, gets harder as the worker gets older, pushing into their 50s.

My plea is this: that social commentators and economists need to do more work on under-employment to truly understand the extent of unemployment in a jobless recovery.  I think the issue goes far deeper and wider than the stats suggest.

And, I think more needs to be done to move us towards full employment.  Part of which - lest we become the Danish King Cnut trying to hold back the tidal wave - probably includes contract work and workers being adaptable.


Gavin