By the end of the 20th century, there was general agreement that, across the globe, labour markets were in transition and employment was becoming less secure. It was argued that the prevalence of secure full-time employment with benefits, known as the Standard Employment Relationship (SER), was in decline. Alternative forms of employment were growing, most of which were temporary and insecure. Today, there are concerns that this trend is continuing, perhaps even accelerating, as new digital technology creates the foundation of a ‘gig’ economy. A ‘gig’ economy is one where the dominant forms of employment are short-term contract work, freelancing and self-employment.
The current Canadian Minister of Finance recently advised Canadian workers to get used to ‘job churn’ and short-term employment. Some predict that, by 2020, full-time employment with benefits will become scarce in the United States and that 40% of the workforce will be freelancers, contractors or temporary workers.
This article takes a new look at the changing characteristics of employment and offers a method to measure employment security: the Employment Precarity Index (EPI). The EPI is used to explore the security characteristics of different forms of the employment relationship. As well as offering a tool to measure employment security, it sheds light on why official labour market data have not shown a dramatic increase in temporary or casual employment, despite research that suggests employment is becoming less secure.
Finally, we use the EPI to assess how insecure employment associated with a ‘gig’ economy
might affect well-being and social relations, including health outcomes, household well-being and community involvement.
This study uses a unique Canadian data set of nearly 8000 individual observations collected in 2011 and 2014 by the Poverty and Employment Precarity in Southern Ontario (PEPSO) research group. It includes data on the form of the employment relationship and on whether individuals were in full-time, temporary, contract, seasonal, or part-time jobs or were self-employed. It also includes data on the characteristics of each of these forms of employment, and in particular those characteristics that measure the degree of employment insecurity.
A substantial number of respondents in the PEPSO sample who reported they were in permanent full-time employment had employment characteristics that were much closer to insecure temporary employment than they were to workers in a SER.
In order to assess fully the potential social cost of an expanding ‘gig’ economy and the implications of the changing nature of employment described by numerous researchers, it is essential to assess properly who is permanent and who is precarious. Official labour market data that rely on a binary classification (you are either permanent or temporary) have the advantage of simplicity and are widely available. The research presented in this article suggests that such data can be a misleading indicator of employment insecurity. Use of a more nuanced measure of employment insecurity, such as the EPI, allows a more precise allocation of workers to employment security categories and allows a deeper understanding of the potential social costs associated with employment trends in labour markets. Our research suggests that increased overall employment insecurity in labour markets will be associated with poorer health outcomes, increased anxiety at home, delayed household formation and greater social isolation.