Permanent Jobs Might Permanently Become A Thing Of The Past
Maybe you have or haven't noticed yet, but many people in the U.S. are no longer spending their days working away at a permanent job. Many people have moved onto the world of freelancing, consulting, self-employment or even working multiple part-time jobs to meet their financial burdens. The reason why freelance may be the way to go is that permanent jobs may take a permanent backseat if the the economy continues to recover more and more slowly each time there is a recession. With each new decade's recession, the recovery in hiring slows down, leaving more people looking for work than there are jobs available.
The History of Post-Recession Hiring Recovery
To really understand this concept lets examine the recessions of the past few decades. In the early 80's the recession began in July of 1981 with 3 million jobs being lost in just one year. Not even two years later, in 1983, the number of jobs in the U.S. economy had not only recovered from the recession, but it had surpassed the old marker, generating new jobs.
Fast forward 20 years and you see a different sort of recovery in action, a slower one. 2001 marked the end of the economic downturn of the new millennium, but employment rates continued to decline for two more years until late 2003, at which point they floundered around for two more years before finally bouncing back to the pre-recession levels in 2005. Why did it take four years for the economy to recover from a recession in 2001 when it took less than two years just 20 years before in 1981? Read on and see.
The People Factor
Economics does not get more basic than the concept of demand and supply, and right now the U.S. has a serious case of too much demand and not enough supply. Currently there are 6 people per job opening and almost half of those who are unemployed have been out of work for 6 months or more. That tells us that not only are there a lot of people losing their jobs or living in fear of layoffs, but that also the folks who are unemployed or who become unemployed, remain in that state for a half a year or more, in some cases.
Outsourcing of work to other nations across the globe does not help the U.S reinvigorate its hiring cycle. In 2009 alone, IBM cut 10,000 jobs in the U.S. and over 70 percent of the company's employees are based overseas. Companies are seeking the lowest labor costs possible, and if they cannot find it in the U.S. they are not hesitating to look beyond our own borders.
Technology-Helping Or Hurting?
Everyone loves the many technological advances that they are exposed to everyday and that make their lives easier, more enjoyable and more profitable, but in some cases technology is hurting job rejuvenation in the U.S. Since the beginning of this current recession, the administrative sector of the economy has seen a 10 percent decline in the number of workers performing administrative tasks. Why? Because updated software programs and computer systems have replaced many unskilled workers and the need to have multiple employees perform tasks that a computer or database system can accomplish in half the amount of time. For example, look at the emergence of the new administrative assistant-the virtual assistant (VA). People can choose a freelancer from a large pool of applicants that have the ability to work from any location remotely. Additionally, employers can hire these virtual assistants on a per-project basis so money is saved and benefits are not offered.
I Hate To Burst Your Bubble, But......
In the past, a new or unique skill almost always guaranteed you a job within a certain niche market, but with technology advancing quickly and special skill sets becoming an expensive luxury, many of the old niche market jobs are dying off as well. For example, there used to be a great need for computer repair men, but nowadays it is almost more economical to just upgrade your system than to pay to repair the old one, thus negating the need for a repair man.
Movie theaters used to pull in big money on tickets and concessions, but now they have to compete with Netflix, Blockbuster, On Demand cable and live streamed movies. People can rent a video for $3.00 and watch it in the comfort of their home, decreasing the need for movie theater staff.
Following the 2001 recession, the economy came back in a strong way, with an increase in the number of jobs in the financial and construction industries, but now that the housing bubble has burst and the financial world has been shaken to its foundation, the number of jobs in those industries has declined, maybe permanently. Even if those sectors see marked growth in the next few years, they will most likely never be what they once were.
Freelance Equals Flexibility
Anyone you ask will tell you that growth is unpredictable. No one can say for sure how small or large businesses will grow and fare over the next few months or years, so business leaders are taking the safe road and seeking flexible labor with lower costs. Freelancers, part time workers and temps mean no benefits to pay, pay for the work actually done, and oftentimes you can even forgo the formality of an expensive office for the employee to sit in, reducing overhead and slashing costs even more.
Take California as an example. This state is suffering from such hard financial times that they not only mandated furlough Fridays at the DMV to cut costs and save money, but they laid off over 26,000 teachers and school employees in an attempt to aid the state's worsening budget. Cutting hours and numbers of employees was the only answer.
When there are more people than there are jobs, wages become more and more scrutinized. People want to know how much there is to go around and who is getting what.
Knowing why job hiring is not bouncing back as quickly after this recession is daunting to think about, but good knowledge to have. It tells us that in this day and age there is nothing to expect, but the unexpected, and that the best way to remain prepared is to remain open-minded and flexible as well as up-to-date on the skills required within your industry or field.