The New Labor Market (What’s the deal?)

Americans are beginning to realize that the relationship between those who need work done and those who can do the work is changing. Notice there was no employer/employee relationship established here. The days of someone working for 30 years disappeared 20 years ago. In a study for the department of labor done in 1999, Susan Houseman correctly identified the “contingent worker”, as a trend in the market. 10 years later we are only now seeing this trend on a mass scale. Independent contractors hired to do a specific task for as long as the contractee is willing to pay. While the department of labor will force companies to classify these individuals as employees, the result is the “employee” will only have a position either until that duty can be performed by cheaper labor (off-shore) or until the business changes.

During the .com boom legislation under the Clinton administration allowed and encouraged investment in India, China, and other countries to support the technology boom here in the US. When people realized that many of these ideas, while great, were not necessarily the economic boom that they thought they were, the money dried up, but the trained talent pool did not. From an investment standpoint and for Walmart shoppers everywhere, why would you pay $40 dollars an hour for an accountant, programmer, automotive assembly line worker, or any other group when you can pay $5-10 dollars per hour and hire twice the number to achieve the same productivity? Pay less in benefits and have a larger workforce available and be able to work 24 hour a day. This becomes a very simple equation. The truth is Americans need to get serious about changing our labor laws to facilitate contract labor and enable those who will be changing jobs every 3-5 years a much more flexible framework in which to operate. This affects everything from the 401k to healthcare. Universal Healthcare as proposed will be an excessive burden to all concerned and still not address the primary issue of how individuals can tap into a privately managed healthcare industry while freeing them and employers from having to bear the burden of insurance. We have an insurance problem not a healthcare problem.

These are but a few of the issues that I will begin talking about in the next few entries.