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Section 1

The evolution of how we work

Chapter Sections

  • Diverse ways of working are no longer niche
  • Coping with the new diversity

The evolution of how we work

National employment market data rarely give a nuanced picture of subtle shifts, and change can take decades to appear in the statistics.

Not surprisingly, then, one feature of labour markets persists. “The majority of workers still want your standard [direct, open-ended, full-time] employment contract,” says Stijn Broecke, a labour market economist at the OECD. In Japan in 2016, about 58% of the workforce, including company executives, was in direct, open-ended, full-time employment contracts; in the US, the proportion is around 60%.1 In South Korea, those in such contracts topped 50% of the economically active population in February 2018.2

Diverse ways of working are no longer niche

A majority of those in formal work might still be in direct, open-ended, full-time contracts, but that leaves 40% or more working in some other way: part time, temporary, self-employed. This figure has grown markedly in recent decades and is undermining the assumption behind many social protection arrangements that it is enough to cover those with direct, open-ended, full-time contracts.

Part-time work

The biggest change has been in part-time work. Japan, for instance, saw the proportion of its workforce in part-time jobs rise from 16.3% in 2000 to 22.8% by 2016.3 Data for the EU15 – still the wealthiest member states – and the US go back further.4 Part-time workers in the EU15 rose from 13.6% of those in employment in 1990 to 23.5% in 2016. In the US, the growth was less pronounced – from 16.9% in 1990 to 18.3% in 2016 – but that is still nearly one in five employed people not working full time.5

Temporary work

Changes in temporary work – whether full or part time – are less clear cut, but it is an important part of employment in most developed economies, including 20.1% of all workers in South Korea. In the EU, meanwhile, temporary workers grew from 10.3% of the workforce in 1993 to 14.6% by 2016.6 What these figures do not show is the diversity of temporary work. Among the options are to work directly or via an agency, and timeframes that vary from a few hours a day to a few days in a row, or over a span of several years.

Self-employment

The third major alternative to direct, open-ended, full-time direct employment contracts is self-employment. The figures are equivocal, but this type of work continues to represent a substantial part of total employment. In South Korea, for example, despite declining for decades, self-employed workers still make up 25.5% of the workforce.7

The self-employment rate has stayed stable within Europe at about 15% of the workforce. In some countries, including the UK, the Netherlands and France, there has been a rapid increase in non-agricultural self-employment – especially for individuals working on their own account.8

The best US data suggest that about 10% of workers there are self-employed, also with little change since 2000.9 And Singapore reports a similar figure for the past decade.10

New ways of working

Other kinds of work are also appearing and growing. The legal framework for temporary agency work, for example, appeared in Europe only in the 1980s and 1990s, and it now accounts for about 2% of EU employment.11 Japan reached the same level in 2015, roughly quadrupling its 1999 figure.12 In the US, agency work rose from 1% of employment in 1990 to 2% in 2016.13

Other new forms of work include employee sharing, job-sharing and collaborative working. Some of these innovations are growing quickly. In France, for example, about 0.2% of the workforce is involved in employee-sharing schemes, and in Hungary, after just two years of these arrangements receiving regulatory approval, the figure has reached 0.1%.14

These numbers might seem small, but even a 1% shift in either the EU or US workforce affects more than 1.5 million people. Add these smaller figures to the more common forms of work outside of direct, open-ended, full-time contracts, and the numbers become impossible to ignore.

Coping with the new diversity

As with policy and regulation, labour market characteristics also vary widely across countries. Even within Europe, for example, in Bulgaria, Estonia and Latvia fewer than 20% are in some form of work that is not a direct, open-ended, full-time contract; in the Netherlands, the figure is 60%.15

The new diversity presents a complex set of social protection issues that go further than the obvious need to find ways to adequately cover those in diverse forms of work. “One issue being discussed is transferability,” says Rebekah Smith, Deputy Director at BusinessEurope, an EU-level membership organisation of national employer/industry federations. “What are the possibilities for people to take the rights that they’ve acquired – whether to a pension or training – when they change their status in the labour market?”

However, in seeking to address the real needs of those outside social protection systems it is crucial not to damage or dilute what does work well. In Europe in particular, says Stijn Broecke, “social protection systems have developed over time and in most cases still perform rather well for many people.”