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
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.