Technological and legal changes over the last generation have dealt employers an increasingly strong hand in setting the terms of their relationships with the people they hire. Regardless of whether you think that this is a good thing or a bad one, it’s hard to deny employers’ clout.
What’s less easy to see is the costs of exploiting that imbalance in power. They are worth considering. First, though, some background.Evidence of the aggregate power shift can be easily seen in the changes to the conditions under which employment takes place today. In the U.S., wages have been largely stagnant for three decades, though productivity has risen. That means virtually all the benefits of higher worker productivity have accrued to employers.
Meanwhile, employers have reduced the financial burdens of providing employee security. The percentage of people in the U.S. working as contingent workers had risen to 40.4% of the U.S. workforce by 2010, according to a study by the Government Accounting Office, which also concluded that the contingent workforce level had been at 30.6% in 2005. (Admittedly, the so-called Great Recession fell in the years between those two dates, but 10 percentage points is a very large shift.) And obligations to the full-time workers who remain have been reduced as well. We’ve all seen how guaranteed pensions have been replaced by defined contribution accounts such as 401(k)s.
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