Is the Unemployment Rate Really Decreasing?

Back when I was growing up in the 1960s and 1970s, employees regularly expected to receive health and life insurance, vacation pay, and pensions. Pensions became rarer and rarer as the years went on. 401K plans, and their counterparts, became the norm. Sometimes employers matched funds, or partially matched funds, and sometimes they didn't.

By the 1980s or 1990s, workers began to realize that jobs with pensions were the exception, not the norm. But they still, for the most part, received insurance, which was partially paid for by their employers, and vacation and sick pay. Now, in 2012, workers can't even expect those benefits. In fact, people who hold full-time jobs are beginning to be happy with just having a job. After all, so many people can't find employment. This mind-set is a windfall for employers. Suddenly, they are bombarded with job applicants, and they can pick and choose who they want, and what they want to offer them. This doesn't bode well for John and Jane Q. Worker.

Unless you've been living in Kenya with Donald Trump and President Obama, you've been, and are being, assaulted on all sides by political ads, political predictions, political arguments, and political allegations. Democrats claim that the rate of unemployment has decreased slightly. Republicans counter that it only appears that the number of unemployed workers has gone down because many have had their benefits expire, or they have given up looking for work.

Given up looking for work? Get real. What I think (and this is purely speculation on my part, based on my own recent experience) is that people are finding work off the books, or they are working for companies full time, with no benefits, via an employment agency. I have met people who are working for individuals at their homes, as housekeepers, nannies, gardeners, helpers, etc. They are being paid a living wage, and they are not paying taxes on those wages, and neither are their employers.

Other people have signed on with temporary employment agencies. These agencies pay good hourly wages, and their clients are not obligated to give the workers any benefits because these workers are not their employees; they are independent contractors or freelance employees. Freelancers and temporary workers have always been an option for employers, but it used to be that they were temporary options: people who filled in for employees who were on vacation, on disability, or on maternity leave. Now, these freelancers are full-time workers. And, many hold supervisory and managerial positions.

I have worked for two large companies during the last year that have downsized their staff and rely heavily on freelance employees. I was very surprised when I discovered that many people who are in charge of entire departments are not company employees, but work through an employment agency.

I believe, through my own experience and from anecdotal evidence garnered from people I have spoken to, that the hiring paradigm has shifted dangerously. Employers with stockholders can keep their official employee numbers down and use their freelancer budget to people their positions. Stockholders can then applaud the companies for keeping employee costs down, while overlooking the reality: employees are being paid through another channel, at a still-great cost, that they might not know about. If they do consider the freelancer budget, they might still be happy that benefit costs are non-existent for those employees. Private companies also benefit by not having to provide benefits to employees.

It's time to realize what I believe is happening in the workplace and to either rally against these changes, or learn to cope with them. But, we need to be aware of this new reality before we can decide which course to take.