U.S. Is Land of the Full-Time Job
When it comes to striking out on their own, workers in the famously entrepreneurial, risk-taking U.S. are extremely unlikely by international standards to...strike out on their own.
This accounting, from the Organization for Economic Co-operation and Development, doesn't include people with their own incorporated businesses. In the U.S. there were almost 5.5 million incorporated self-employed workers as of May, according to the Bureau of Labor Statistics, which brings the self-employment rate up to about 10 percent. But that still ranks the U.S. as a self-employment laggard.
Part of this is just a reflection of the advanced state of the U.S. economy. There used to be tons of self-employed farmers and shopkeepers here. Consolidation and technological change have reduced their numbers faster than the number of, say, self-employed software developers has grown. Still, even when compared with other highly advanced economies, the U.S. comes across as a haven for conventional employment and a relatively slow adopter of new work practices.
This isn't necessarily a bad thing. I came across the international self-employment comparisons in a new flexibility@work report from the staffing firm Randstad. The first part is an assessment by Dartmouth economist David G. Blanchflower of self-employment trends since the Great Recession. Overall, he found, self-employment didn't rise much in developed countries during the recession, and self-employed workers continued to make a lot less money than other workers. On the other hand, they do tend to report higher job satisfaction.
The rest of the report is an update from Randstad on flexible work arrangements around the world. Here is the percentage of workers with a flexible labor relationship (defined as self-employed, working on a fixed-term contract, or working through a staffing agency) across 10 affluent countries:
This is partly a definitional issue: in the U.S. most "permanent" jobs are at-will, meaning an employer can dismiss an employee at any time for any (not otherwise illegal) reason. In much of the world, especially Europe, full-time, permanent employees have a lot more job security than that. As a result, employers have pushed for more flexible work arrangements that don't come with such protections. So some "flexible" jobs in Europe aren't really all that much more flexible than conventional jobs in the U.S.
Still, full-time jobs are definitely more common in the U.S. than elsewhere:
Many other affluent countries have developed two-tier labor markets, with a privileged class of full-time workers and a generally less fortunate group of part-timers and contract workers. There has been some talk of a similar split along generational lines in the U.S., with young adults less likely to have full-time jobs, but so far it isn't as pronounced as elsewhere in the developed world.
Basically, the U.S. comes across as the last haven of the full-time, permanent (or at least non-temporary) job. That's generally a good thing for U.S. workers, although there are indications that in some countries employer creativity in crafting flexible jobs has actually lured people into the workforce. In 2000, the U.S. had one of the highest employment-to-population ratios in the OECD, at 74.1 percent. By 2013 this had dropped to 67.4 percent. not much higher than the OECD average. In Germany, by contrast, the ratio rose during that same period from 65.6 percent to 73.3 percent.
It may be that informal work facilitated by the likes of Airbnb and Uber is bringing people back into the labor force in the U.S. but just isn't showing up in the statistics yet -- although a recent survey by the Federal Reserve Bank of Boston found that most such work is done by people who already have jobs of some sort. The death of the traditional job has been proclaimed again and again and again, and in some parts of the world it really does seem endangered. In the U.S., though, it is proving to be quite resilient.
At least a few other countries have incorporated self-employed people too; there is just isn't any international tracking of their numbers.
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