Freelancing. Being your own boss, having a portfolio career, living on your wits, independence, having no one to answer to – this all sounds good, doesn’t it? And it can be. The other side of this world is insecurity, worry, constant fretting about the next gig, undercutting everyone – starting with yourself – to get gigs, spoofing, hustling, not being able to plan and recurring financial anxiety, not to mention fear of tomorrow.
But this freelance world is a world that we are going to have to get used to and it is a world that your children are likely to inhabit. The latest figures from the national household survey, released last week, reveal a rapid change in the Irish labour market.
There has been a massive switch to part-time work. Looking at the figures, the most conspicuous development is that since 2008, full-time employment positions continue to fall quite relentlessly. The jobs that are being created are part-time and as these jobs are on temporary contracts, with them comes a huge element of job insecurity.
You can see in the chart from the newly-released CSO data what is reality in Ireland: more and more people are working at jobs with less and less security. In the main, these are young people.
The precarious nature of being a young worker is central to the change in economic life, which is going on every day in Ireland.
Contrast this with ten years ago when young workers were getting well-paid permanent jobs in a variety of local sectors.
In addition, these young workers were buying houses which were rising in value, giving them the feeling of wealth. Some 50 per cent of Ireland’s total mortgage book was lent out in the Noughties. These two factors drove spending, tax revenue and fed the demand for labour.
Now we have precisely the opposite situation. These same young workers, carrying negative equity, are now faced with the prospect that any new job they pick up is most likely to be temporary or part-time.
This profoundly undermines any foundation for a solid recovery.
Now just imagine that the trends of the past five years are extrapolated out for the next five years. What is the Irish labour market likely to look like then?
Check out the table and graph below:
Here I have just extrapolated the trends and we see that by 2020, the number of part-time workers will have almost doubled from the 2008 figure. In contrast, there will be 10 per cent fewer total full-time positions in 2020 than there were in 2008.
This will have profound implications for everyone.
It means that the recovery will be almost non-existent because insecure workers don’t spend. Why might this be? It is because spending comes out of income and part-time incomes are usually much more volatile that full-time incomes. If your income is dodgy, you don’t spend and equally you are not a good bet for loans.
The implication of the older population having secure employment and the young having insecure employment is that the money saved by the older secure folk does not get circulated in the economy because the banks are terrified about lending it out locally. This will lead the banks to recycle savings into investments that are seen as more secure, even if they provide lower yield.
Now what may such investment look like? Why, government bonds of course. But what will a proportion of the money raised by government bonds finance? Why the salaries of permanent, middle-aged civil servants and the pensions of the already retired! This will exacerbate the security imbalances within the working population – the very imbalances that were forcing the banks to invest deposits in government bonds in the first place. Can you see where all this is going?
It is likely to make the economy more sclerotic, not more dynamic.
The purpose of these statistical updates is to give us a snapshot of the society that we live in. This sort of data should prod the government to act and to base policy on evidence.
Now think of what is happening in Ireland. The labour market is split between insiders and outsiders. The insiders have secure jobs, protected by legislation and legacy.
These people have a stake in society. The outsiders are those who are exiled to the twilight world of part-time work, temporary contracts and the quality of the last job.
These guys can’t come in hungover on a Monday and hide for the day, safe in the knowledge that someone else will foot the bill. They don’t clock in and clock out based on a rigid time clock, calculating exactly how much extra they may have worked over and above some arbitrary minimum and charging the employer accordingly.
They don’t do this because they are their own employer.
The insider/outsider dilemma is very complex in a small country like Ireland. Within families, there will be insiders and outsiders living in the same house.
Parents may be in insider employment and the children may be outsiders. Brothers and sisters may be similarly divided.
Pointing out the insider/outsider dilemma is quite different from pointing the finger.
These outcomes might be nobody’s fault. That said, it is clear that this situation can’t go on. It is obvious that if young workers are being employed casually, they will hardly reach their full potential and will flirt around in the twilight world of quasi-employment.
This may make them keener and better at their chosen pursuit, but it’s not going to be a pretty picture if they, the worker bees, feel that they are working their butts off in a competitive world, while a drone class is sitting around getting well paid, extracting concessions and complaining at the same time.
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The insider outsider dilemma will be resolved the instant we run out of access to funds. One billion a month to borrow one billion on interest no need for projections to 2020. Enjoy the fine weather the forecast is for a harsh winter in all respects.
At last. An article that perfectly states where we are and why we should be wary of all rosy stats on employment. The thing about insider outsider conflicts is when one decides they will not play by the rules. Outsiders have less and less to lose. More importantly theirs is an economy that’ll develop legs quicker than you realise. Paradigm shift is well and truly underway.
Great Article David. I am an outsider, working in London. It means I must perform well at work everyday, no room for slacking off. This is fine, and I’m happy with it right now as I am well paid, but it means I never have a single drink on a night before work, I’m in bed by 10pm, I arrive at work early to allow for any delays, and I work through my lunch. I work 60 hours a week. David, you just have to go one step further and tell us that the Unions are destroying Ireland. The National… Read more »
Another aspect to this is that as an employee, when you go to the Higher rate of Tax (as the threshold is so low) you are effectively A SLAVE FOR THE PARASITES. YES A SLAVE FOR THE ABLE BODIED ON DISABILITY, JUNKIES, SINGLE MOTHERS WITH FIVE BABIES AND THE LIVE-IN PARTNER AND COSSETED PS UNION BENEFACTORS(ESP LAZY TEACHERS). I know of many who are only doing part- time work (and enjoying their free time) as they realise working harder and longer as a private sector employee makes no sense at all.
God Speed the Day of Reckoning…
Here I am working on a Bank Holiday Monday. After working yesterday and Saturday, oh now that I think of it I haven’t had a day off in a year or so. I am an Architect, but I am classed as being in “NPD”. Thats civil service speak for “New Product Development”. I invent, I patent and I try to get things to the market. All funded by my Architectural work. Which before anyone asks, NEVER included any multi housing schemes or “Legoland” developments. I work exclusively on commercial projects, industrial estates, shop fit-outs, bar designs and pro-bona one off… Read more »
Sheesh, ’tis like looking in a mirror! Particularly the tendency to put yourself second… third, fourth… …last! Even when you know you should be prioritising your own interests.
As a service provider, it used to be that most things trundled along evenly and the odd client would occasionally get hit with a curve ball that kept life interesting.
Now, it’s just hassle from every direction. Everyone seems to have legal and financial issues in the fallout from the madness.
Quote “The implication of the older population having secure employment and the young having insecure employment is that the money saved by the older secure folk does not get circulated in the economy because the banks are terrified about lending it out locally. This will lead the banks to recycle savings into investments that are seen as more secure, even if they provide lower yield” What absolute balderdash. Yet again McWilliams willfully ignores the basics of how the modern banking system works. At this stage one can only assume that for some reason he is deliberately misleading the reader. This… Read more »
Young people everywhere always have a hard time in the labour market. The US economy is driven by domestic consumption, yet 90 % of it’s labour force is treated woefully. No holidays, $ 6 an hour unsocial hours jobs dominate. Living with your parents indefinitely is the only way to cover the cost of living in an urban area.
The insiders are in a ponzi scheme that the bottom is falling out of. To get their pensions they are relying on the contributions of the young who are emigrating, unemployed, partially employed and self employed. None of these will contribute much to the pension/health system. They made their bed so let them lie in it. Someone calculate that PS pensions are a 116 billion euro bill waiting for someone in the future. The potential payers have fled. The pensioners will starve.
“This profoundly undermines any foundation for a solid recovery.” I’m optimistic by nature and not a doom&gloomer but the general fixation with ‘recovery’ and ‘turning corners’ is ignoring the very conclusion that which EVERY Data Extrapolation demonstrates, that there will be no recovery. This ‘great recession’ is not a temporary blip on the business cycle but a profound transition to a permanent labour surplus economy. This can either be an opportunity or a disaster for society depending on how it will adapt to the new reality. This new reality is beginning to impact the young first. The question is whether… Read more »
Insecurity has always been a major factor in the Irish private sector, that’s why most clever people opted for jobs in the public service – clever shouldn’t be confused with hardworking. It’s the primary reason that we don’t have an internationally recognised irish indigenous enterprise other than Guinness. We just trundled along with a given cake size until the multinationals arrived and now, the benefits from that have been wiped out in the great property push under Fianna Fail. Bach in the old insecure days, irish employers used insecurity as a management tool – it used to be said that… Read more »
Have the self employed become the new part time workers and not buy choice.
I can remember working 12/14 hour days 6 days per week and even 4/5hours on sunday, now I work maybe 20 hours a week.
I find it funny people telling me how they took a 14percent pay cut,I have taken a savage pay cut .
I want to know who’s world do I live in.
Another dreadfully naive or cynical article from the capitalist useful idiot and fellow-traveller, classic divide-and-rule, setting tuppence against tuppence-halfpenny, the part-timers against the full-timers, low-paid private against low-paid public, the old against the young, etc etc, anything to divert attention from the elephant in the room, the real divide – the enormous gulf between the vast majority of us and the ultimate insiders, the rich and the super-rich, the tiny minority, the 1%, or 0.01%, who own and control such an enormously disproportionate share of the wealth and power, who have destroyed even their own game, and who will destroy… Read more »
Great articles. Am touched by the contributions here too. Amazing.
Hate them love them there will always be rich and poor ,I don’t care about the rich but I do care About the poor.
Why can’t there be middle to all this ,a common ground .
There use to be a middle to some degree, we need it back.
Greed and corruption we where told by kenny would be a thing of the past in his words a new way of doing things,is this a fairy tail or gimmick to con the voting masses
While DMcW is again, as posted above, pathetically trying to pit our society against itself. So look at the Daily Telegraph for a contrast, right over in London.
Liam Halligan: “Over In the Glass-Steagall Debate Is Live”
Divide the banks, DMcW, not the people. Why are you appearing to protect very well known corruption? It is becoming blatantly obvious.
On a beautiful afternoon in Sunny Dublin ,its hard to believe the country is actually in freefall.There is an air of despondency in people as is evident in the comments read here today.In Ireland the cute hoor syndrome is alive and kicking.A Greedy public sector exploiting sick time off,unpaid leave I was told by one,does that mean social welfare benefit as there is no such thing as career break,and the person is needed in the job.It is a survival of the fittest and the fittest appear to be the lot in power clinging to the idea of restoration of a… Read more »
“These outcomes might be nobody’s fault. ”
What kind of “economics” is this supposed to be? It is deafeningly Hayek’s “unknowable spontaneity”, a most evil anti-human borrowing from Bernard de Mandeville.
The last theme was basically Keynes’ “animal spirits”, the “spontaneous” lurch to action instead of inaction, now we are told not to know.
It is painfully obvious how West Brit “economics” is infested with Adam Smith, who decreed exactly this to subjects. This “economics” has caused the “trends” described.
“the money…does not get circulated in the economy because the banks are terrified about lending it out locally.” David, this sentence implies that you think banks lend existing money, which comes from other people’s savings? I’m unsure; Do you know that this model of banking hasn’t applied for decades? Or are you simplifying the system (to the point of falsification)? Either way, the process by which money is created is quite simple and there’s no reason to simplify it further. If someone gets a loan from a bank the bank types new money into the borrower’s account. That’s it! And… Read more »
Excellent article. And Excellent commentary from the outsider. Let’s face it, the insiders do not get any resonance from anything that comes from David. They don’t want to know the truth of what is going on. Too busy with the veneer. Constructing it, living it, believing in it, selling it to the rest of the population. The veneer level element of society is getting “something for nothing”. And the rest of the population must provide that something. And that section of the population get ….nothing a lot of the time. And within the outsider population, there are those who have… Read more »
ENDGAME:: Insider jobs at outsider pay and conditions?
I am really disappointed at how David finishes the article, falling into the trap of believing that those on the inside just sit around and complain. I am an insider, and I do not see it as complaining, I see it as comforting. If all these little outsiders saw us happy and content they might be so much more unhappy. Our comforting and emphasizing and bringing ourselves onto the same level as those who are struggling is what makes us Irish. We are a uniquely social culture. And if little Johnny who left school after the Junior Cert and who… Read more »
In WW11 American soldiers were in combat an average of 10 days a year..
In Vietnam U.S soldiers were involved in combat 260 days a year…..
In Ireland during this financial War Citizen Soldiers are involved in combat with austerity every day of the year………
David McWilliams wishes to start a revolution he wants some to complain about those who work for the civil or public service but he’s clever not directly say it as he would be biting the hand that feeds him that is to say he works for public service at times he works for RTE he depends on the goodwill of those who work for RTE and those in the on the inside and outside that read newspapers and books. Most of the private sector workers work indirectly for government agencies their products are sold to government agencies without these government… Read more »
Privatizing wealth and socializing debt. Life is good when your living as a banker off those on minimum wage, they cook my meal and pay my bills, thanks modern slavery, thanks to the system.
Don’t you just love capitalism some fools think everyone can be on top I love those guys as they feed me and pay my bills.
The twilight of banking : NO LENDING IN EUROPE: Ambrose Evans-Pritchard’s {Daily Telegraph} column June 2 notes that the Bank for International Settlements (BIS) reported (for the fourth quarter of last year) a large further drop in bank lending within the Eurozone. It fell by $284 billion in that quarter, a 20% annual rate of contraction; and also reported that a specific Cameron government program in the U.K. designed to increase bank lending — the Funding for Lending Scheme — had failed to do so. The BIS quarterly report also warned that QE policies were creating asset bubbles for the… Read more »
Freelancers are too busy to post here it seems, no time for a “mumblin’ word” about what’s being done to them. After all time is money, talk is cheap! And the meat-grinder makes it cheaper by the hour, for the bosses.
Where there used to be marketing dept’s, kept well away from engineering and development, now everyone markets themselves – the cacophony is deafening! And the productivity is catastrophic. This is “competition” so lauded by the magicians of the Mont Pelerin Society, a twilit dead-end if there ever was one, as intended.
Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity.
Strength to Love (1963)
Great article David,
Is this article a repeat of one you wrote some time ago?
If I may be allowed to be gnomic – we are now entering the zettabyte era. Ye shall all be ultra specialists contributing to the cloud or you will starve because your generalist working habits have all but been optimized out of existance by cost cutting, targeted marketing and surgical outsourcing. You are witnessing the last days of PAYE no matter where you think you are currently and comfortably ensconced. The regulators/ lawmakers and public institutions of all forms have been left behind in the dust of pixellated data streams which are evaluated trans-nationally and ex-regulatory as they arrive real-time… Read more »
Describes my situation and increasingly I ask, why hand around here to support all the insiders? It doesn’t look like much up side and better not to indulge the bastards…
Feels like yesterday (heaven). June 1983. Off south to a hotel job.
Ice cream wars in Glasgow and glad to out of the crap hole.
I’d do it again and live a little. Some very pretty girls on the south coast and the summer nights are long.
Mother’s Little Helper The Rolling Stones
http://www.youtube.com/watch?v=13olfeD026g
ILO report on EU jobs
This is the ILO’s World of Work
See the ILO paragraphs and graphics about part-timer work.
More than 2.7 million jobs have disappeared in the EU since 2007, where total unemployment now exceeds 20 million. About 30% of that total (6.2 million) are in Spain alone.