The Dangers of Temporary Employment

Re-Blogged From Stratfor

The Dangers of Temporary Employment

About six in ten jobs in the European Union today are full-time permanent positions. But jobs offered under part-time and temporary contracts account for an increasing share of total employment. In 2003, well before Europe’s economic crisis, 15 percent of workers in the European Union were employed under part-time contracts. By 2015, that had risen to 19 percent. During the same period, temporary contracts rose from 9 percent of total employment to 11 percent. Temporary jobs offer less security than even part-time permanent ones. They often come with lower salaries and fewer training and career advancement opportunities, making it harder for workers to access credit, plan their consumption decisions or qualify for unemployment benefits.

Job security is also tied to workers’ overall satisfaction. Since the start of the 2008 crisis, many Europeans have been forced to accept temporary contracts or permanent part-time jobs when they would rather work on a full-time, permanent basis. In many cases, the part-time or temporary contracts do not offer a path to full-time work. In some countries, low salaries also put the working poor at risk of falling into poverty. Jobs that do not offer much security can be found almost everywhere in the European Union, but they are particularly prevalent in the south, such as Greece, Spain and Portugal, where the unemployment crisis was more severe and the economic recovery more fragile. In addition, the structure of the economy in Southern Europe is more conducive to the creation of such precarious jobs.

Job insecurity is not exclusive to the southern members of the eurozone: Countries in Central and Eastern Europe like Poland and Bulgaria also have high rates of temporary employment or jobs with low salaries. But unemployment rates rose faster in Southern Europe, where the crisis hit harder. High unemployment and insufficient economic growth in that region exposed the fragility of the banking sectors in several countries, raised questions about the sustainability of their public and private debts, and created a fertile ground for the emergence of anti-system political parties that could threaten the survival of the eurozone.

The creation of temporary and precarious forms of employment is a normal phenomenon during the early stages of an economic recovery. Over time, however, they could drag down an economy by limiting the room for growth in domestic demand, for example. In addition, rising income inequality feeds growing social and political tensions. While unemployment rates are dropping across the board, issues such as job insecurity, low pay, long-term unemployment, and few opportunities for training or career advancement could weigh down Southern Europe’s incipient economic recovery.

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