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US Freelance 'Perma-Temp' Economy Takes Hold

In US, a Freelance 'Perma-Temp' Economy Takes Holdi
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October 24, 2013
A shift from full-time permanent employment to part-time temporary work has swept the U.S. economy, gathering speed since the 2008 financial crisis. One in three American workers is now either freelance, a project-based contractor or permanently temporary, according to the Freelancers Union, a private non-profit group. Most do not have benefits or security. VOA’s Carolyn Weaver profiles two New York professionals who are finding only short-term work - one at the beginning of her career, and another who thought he was near the end of his.
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Carolyn Weaver
— Harry Zupnik, an information technology specialist who lives in a New York City suburb, was laid off in 2007 from a large telecommunications company. “Since then, a little over six years, I’ve had approximately 24 months of employment,” he said. “And all the employment I’ve had has been project-related, temporary jobs: Come in, do a project, finish it, get out.”

Zupnik had hoped to be semi-retired by the time he turned 60. Instead, he’s afraid to turn down any job that comes his way. “I spend all of my time scrambling,” he said. “When I’m not working, I’m afraid to take vacations. I’m afraid because of the cost, and I’m afraid to take vacations because, oh my gosh, I might miss a project opportunity.”

Zupnik is one of the millions of Americans whose work lives have shifted radically in recent years. One in three working Americans now is part-time, freelance, in a temporary or project-based job, or employed as a “perma-temp,” according to the Freelancers Union. Most have no job security or benefits, such as employer-subsidized health insurance or a pension plan. The Harvard Business Review recently called it by far the fastest-growing segment of the U.S. job market.

The numbers are expected to grow, in part because of a mandate in the new health care reform law, the Affordable Care Act, requiring companies with more than 50 employees to offer health insurance only to those who work at least 30 hours a week.

Peter Capelli, a professor of management at the University of Pennsylvania’s Wharton School, said the change began in the 1980s, with the first wave of restructuring and outsourcing, together with the decline of unions and skilled manufacturing jobs.

“It has pushed the uncertainty that business copes with onto the work force,” he said in an interview over Skype. “Companies don’t know for sure these days whether demand will be up or down, or how long projects will last. It used to be that they carried workers in the life-time employment arrangements. When business went down, they kept them around. Now they don’t.”

Corinne Pulicay, half Harry Zupnik’s age, is in a similar bind. Last year she quit a full-time job because it had no promotion potential. Now she’s struggling to support herself while she studies textile design and marketing part-time.

“I’ve had trouble finding a steady job doing the same thing I used to do, doing production art, so I’ve had to resort to doing a variety of temp jobs,” she said. “I think people of my generation are very disillusioned. I don’t think there’s any expectation that we’ll get Social Security benefits in the future. I know a lot of my peers who, along with their day jobs, wait tables or tend bar, or are on more than one freelance gig.”

“We’re not really good as individuals at accommodating uncertainty,” said Capelli. “Most people don’t have the deep financial pockets that might make it reasonable to do. It’s not good for employees. The employers prefer it, and think it helps them remain competitive. So, it’s a winners and losers story here, and the employers have been winning and the employees have been losing.”

Zupnik points to the pressure businesses feel from Wall Street and their stockholders to increase profits by cutting labor costs.

“They’re justifying it by the bottom line, by the fact that they’re looking at short-term measurable financial results, and not at long-term value creation. There are intense pressures from Wall Street to perform and to perform now. And when you fail to perform, these companies are punished,” he said.

There is a world of difference in the lives of all those who work at irregular or “contingent,” jobs. Day laborers, many of them undocumented immigrants, wait on certain corners in Brooklyn, Queens and the Bronx every morning in hopes of picking up a day’s work on a building site, or cleaning houses. Others must arrive before dawn at blue-collar temp agencies, like Manpower, and are bused out to non-skilled jobs in warehouses or factories.

Meanwhile, some well-paid professionals choose a freelance life. Interior designer Clare Donahue, for example, has worked as an independent contractor for 30 years, shrugging off anxious family members who urged her to get a regular job. Paradoxically, her employment now seems more secure than her sister’s, who always had a regular job, said Donahue.

“She has struggled for security her whole life, and yet she’s ended up moving from job to job. She’ll start at a job, the company will be bought, they’ll start laying people off, and then everyone is fired. You go through this cycle again and again,” she said.

As for herself, Donahue isn’t as confident about the future as she once was.

“I’ve never felt really insecure until recently,” she said. “It’s a different situation for me now than it was when I started out 30 years ago. It may come to a point where there’s no safety net at the end where you need it. If I were injured, if I retired and needed help, there’s no guarantee now that anything will be there.”

For Harry Zupnik, who recently took a temporary job in Buffalo, one of the most distressing aspects of the new economic landscape is that even the projects he does land are limited in scope, and don’t give him an opportunity to use all his skills. His struggle for employment touches every part of his life, he said.

“It’s very tiring, it’s affected my family life, my friendships, my relationships, my self-confidence, the way I feel about myself when I walk down the street,” he said.

Corinne Pulicay is currently checking copyrights for a textbook  publisher, but that project will be done in a few months. She doesn’t know if she will be able to find a good full-time job with benefits, even after she graduates with an associate’s degree.

“It’s scary,” she said. “I think a new economic system is being born, where you have to sort of fend for yourself economically, you have to hustle and find new avenues of making an income. But you know some people are better at that than others, and what if you’re not one of those people, what happens to you?”

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by: Yoshi from: Sapporo
October 24, 2013 9:27 PM
Yes, employers win and employees lose. Yes, financial results are first and value creation is second. All business seek efficiency, and at last work force could not be exceptional. These are the destiny of capitalism so that we seem should found the other type of economic system. What is that? I guess business activities should be more regurated for example by federal government to perspect whole nations.

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