A "gig" economy

Wall Street Journal, March 2 , 2016. 
Business - By By ANNA LOUIE SUSSMAN and JOSH ZUMBRUN

Silicone Valley "Gig" Economy Spreads Broadly

New research shows labor shift affects health care, education and other industries that have traditionally offered stable employment 

Excerpts:
As com­pa­nies look to shed non­core tasks and gov­ern­ment bud­gets come un­der strain, an ex­pand­ing share of the work­force has come un­teth­ered from sta­ble em­ploy­ment and its at­tendant ben­e­fits and job pro­tec­tions.

The rise has hap­pened even across in­dus­tries in­clud­ing health care and ed­u­ca­tion, man­u­fac­tur­ing and pub­lic ad­min­is­tra­tion, with pro­fes­sions that have tra­di­tion­ally of­fered sta­ble employ­ment.

For ex­am­ple, they es­ti­mate the share of work­ers in al­ter­na­tive arrange­ments has more than dou­bled to 11% in man­u­fac­tur­ing and to 16% in health and ed­u­ca­tion. It has quin­tupled, to 10%, in pub­lic admin­is­tra­tion.

Nor have white-col­lar in­dus­tries been im­mune from the shift. The num­ber of work­ers in al­ter­na­tive arrange­ments, for ex­am­ple, in the le-gal in­dus­try has nearly dou­bled over the past decade. The busi­ness process out­sourc­ing in­dus­try—es­sen-tially white-col­lar con­tract­ing firms—had $136 bil­lion in rev­enue last year and has been grow­ing 4% a year since 2000, ac­cord­ing to the in­dus­try re­search firm IBIS­World.

Com­pa­nies seek­ing to re­duce in-house op­er­a­tions have many op­tions. Large staffing agen­cies like Adecco SA, Man­pow­er­Group Inc. and Kelly Ser­vices Inc. can place work­ers into a grow­ing range of roles—in­clud­ing higher ed­u­ca­tion, gov­ern­ment and health care.

In other cases, com­pa­nies con­tract out to shed ben­e­fits they pay to full-time staff, to fo­cus on core com­pe­ten-cies, or to dis­tance them­selves from li­a­bil­ity costs.

Even fed­eral, state and lo­cal gov-ern­ment in­creas­ingly use con­trac­tors through­out their ranks to carry out ad­min­is­tra­tive, man­age­ment and in-for­ma­tion tech­nol­ogy tasks.

A Con­gres­sional Bud­get Of­fice re-port last year said spend­ing for these gov­ern­ment ser­vices had nearly dou-bled be­tween 2000 and 2012, af­ter ad­just­ing for in­fla­tion, ac­count­ing for about $260 bil­lion of spend­ing. The con­tracts were so wide­spread and com­plex that CBO said it was un­able to quan­tify how many peo­ple were in this con­tracted work­force.

Mr. Weil of the La­bor De­part­ment dubbed this econ­o­my­wide phe-nomenon the “fis­sured work­force,” the ti­tle of a 2014 book he wrote on the topic. The new RAND re­search pro­vides the broad­est con­fir­ma­tion to date that these trends are grow­ing. 

DISCLOSURE:  USC is currently a recipient of PERS benefits from a job many, many  moons ago. PERS benefits will continue to deliver a stable, generous retirement to long-term employees no matter their income or the financial condition of the government agency, due to rate increases the agencies are required to pay.  (Number 9 of the top PERS recipients in the state is Bill Korach who receives $250,395. Until the governent entity goes broke and can't pay any of its bills.  What can the poor, beleaguered government agencies (taxpayers) do?  Plenty.  Read more in future posts.