Wednesday, January 27, 2010

Is The Future Safety Net Multiple Jobs At Multiple Employers?

The above chart is from the New York Times article, "Job-Juggling and Job Loss" by Catherine Rampell.

States that have the highest percentage rate of workers with multiple jobs have the lowest unemployment. How will current and future workers respond to this severe economic downturn and high unemployment? Will they modify their behavior and hold multiple jobs from multiple employers as a way to diversify away the risk of a long-term loss of wages?

Certainly, at the non-professional level where job pay is hourly, it makes sense to diversify employers and hold two or more jobs from different companies. Does it make sense for managerial and professional workers who get a set weekly or yearly salary independent of the hours worked?

In the current recession where many white collar managers, lawyers, and other professionals are losing their jobs, facing long term unemployment and extended periods of lost wages, it would also make sense for them to have jobs at multiple employers and maybe also in multiple fields and sectors. Of course, there are logistical and structural issues to overcome, but nothing that is insurmountable.

Is the future of US employment, full workweeks through multiple part-time jobs at multiple employers? It is a possibility.

If employers benefit from full time employees over part-timers, employers will pay a premium wage for full time workers to offset the value of diversification to employees. Of course, there is a chance employers will find the lower wages of part-timers more valuable than having full time employees. It will come down to how risk adverse future employees become after this economic downturn and how important salary reduction is to employers across a wider range of job categories.

Will employees value a safety net of multiple employers in multiple sectors and fields over the higher wage premium of single employers?

Will employers value the lower wages of part timers more than the additional company value of a full time employee?

The next decade will tell. Either is a possible outcome.

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