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Central Pension Fund The
Growing Contingent Workforce In January of this year, an Advisory Council of the U.S. Department of Labor (DOL) issued a detailed report which documented the extent to which Corporate America is replacing full-time workers receiving pension and health benefits with part-time workers, temporary employees and independent contractors who receive no fringe benefits. This trend threatens to undermine the entire system of employer-provided health and retirement benefits in the United States, both because these contingent workers will be without benefits, and because employers that currently provide benefits will be under increased competitive pressure to terminate those benefits. Statistics compiled by the U.S. Department of Labor show that more than three-quarters (77%) of all full-time union workers receive health and retirement benefits, while less than half (47%) of full-time non-union workers receive such benefits. That disadvantage for non-union workers is, however, substantially magnified for members of the contingent workforce. The DOL Advisory Council report found that less than 18% of part-time workers had employer-provided health or retirement benefits, less than 8% of temporary workers had such benefits, and no independent contractors receive such benefits. The Advisory Council not only identified the pitifully low availability of benefits for contingent workers, but also found that these workers now make up over 30% of the U.S. workforce, and their number is growing at a rapid pace. Since 1990 the number of workers employed as temporary employees alone has tripled from 1 million to 3 million, and is expected to quadruple in size to 12 million over the next 10 years. Why has there been such expanded use of contingent workers by U.S. business? It is largely one more example of the pressure on corporate CEOs to slash costs and increase corporate earnings. In America today, as the stock market continues to boom, there are only two types of CEOs--winners or losers. Those CEOs who can find more ways to slash costs are the winners, those who do not are the losers. Those who slash are rewarded like kings, those who don’t are fired. The traditional and primary target for cost cutting has always been labor costs. In the old days, the mechanism for cutting those costs was layoffs. These days big business has found an alternative to layoffs--contingent workers. To cut costs management merely changes the status of full-time employees to temporary, part-time or independent contractor and stops paying fringe benefits. While there are certain legal requirements that must be met to accomplish this transition--with a few high-paid lawyers it can be accomplished with little trouble. While Corporate America argues that the growth of the contingent workforce is good for all because it makes U.S. business more competitive in the global marketplace it is, once again, working men and women who are asked to pay the price for this competitive edge. The U.S. Department of Labor Advisory Council report urgently called upon Congress to address this looming problem of the contingent workforce in order to protect the interests of society in preserving our employment-based system of health and retirement benefits. It is a call to balance the interests of the American workforce against the interests of big business--we will see where Congress strikes that balance. Originally
published in the International Operating Engineer |