I’ve been thinking lately that self-employment is fast becoming more secure than a job. And then this happened…last night my wife learned something disturbing?not for herself but for some of her coworkers. She has a part time job with a company that just announced that fulltime employees are losing their benefits and being converted to part time status.
Now the optimist may say, ?it could have been worse?at least they didn?t lose their jobs?. And while there may be a grain of truth to that assumption, the bad news outweighs the good here, and I?d say by a wide margin. First of all, part time isn?t full time?it?s part time. That means even if you keep your hourly rate of pay, there?s no guarantee of 40 hours a week, or even of 30 or 20. That looks an awful lot like a pay cut to me.
Second is suddenly going from a job with benefits to one without?that includes health insurance. Charles Hugh Smith has made a strong case that the middle class isn?t middle class without health insurance coverage, and I think that point is beyond debate. What we?re looking at here, in addition to the pay cut, is the loss of socio-economic class status. They?ve been demoted to ?the working poor? without ever losing their jobs. That?s pretty radical.
There ain?t no more job security
The example on my wife?s job isn?t isolated either. More employers are moving toward some variation of this all the time. Here?s the bottom line: from day to day, you can never tell what will happen with your job. A full-time job can turn into semi-employment with a single policy decision by people you don?t even know. It isn?t just layoffs anymore; its hours and schedule, pay cuts, job re-classification, job stagnation, loss of benefits?you name it. I?d even argue that the unemployment rate issued by the government is now mostly irrelevant.
Employment Realty #1 is that employers are figuring out ways to eliminate people and payrolls through a relentless shift to cheaper workers offshore, the latest computer technology or a combination of both. Translation: as much as we want to buy into the economy-is-recovering projections, it?s becoming painfully obvious that if that is happening, it?s fully capable of doing so without employees. The stagnant employment picture has less to do with the state of the economy than it does with the progression of options available to employers.
At least since World War II job security and benefits have always been major reasons why most people prefer to work for someone else rather than for themselves. Job security means insulation from the ups and downs of both the economy and the employers business, and benefits provided the safety net protecting against many of life?s uncertainties. Who wouldn?t want that if they could get it?
Now that neither job security nor benefits are guaranteed through employment, has the playing field been leveled, is there now less risk in being self-employed than there has been in the recent past? I think so.
Self-employment is becoming more secure than a job
Here?s why I think that the case for self-employment is growing all the time, and why it may be the ultimate solution to the employment meltdown of the 21st Century:
- As discussed above, jobs no longer carry the promise of stability or benefits
- Self-employment was the primary income source of most people for thousands of years prior to the 20th Century?it is entirely possible that after nearly 100 years of large scale employment by large organizations, conditions are now returning to the historic norm of the family farm or shop (though it won?t look that way)
- The same computer technology that?s putting people out of jobs is also making it easier to start your own business?we?ll spend a bit of time on this one in a minute
- As the number of people who are self-employed expands, so will networking opportunities. The way you used to job network with people at other companies coverts to networking with those in the same or related businesses
- The same instability that is making the job market less secure also opens up opportunities for part time, seasonal or contract work that can be used to supplement self-employment income?in the start up phase and later on an ?as needed? basis
- Employers who are reducing staff are often subbing out the work once done by employees?that?s an opportunity for a small business
- Because you?re smaller and have much greater freedom in a small business you may be in a better position to react to changes in the economy, such as the ones we?re seeing now
This really is a ?glass half full? situation?if we recognize what?s really happening and learn to use it to our advantage. Reality is going where reality is going; we can either embrace change as an opportunity, or let it roll over us while we look to the past for answers.
How the internet helps the self-employed
Many might curse computers and the internet for the negative affect they?re having on employment, but that?s the wrong approach.
In #3 above we touched on how computers are making it easier to be self-employed and that?s absolutely true. I?m an example of this. Earlier this week, in How Blogging Solved My Mid-Life Career Crisis, I spilled my guts about being disenfranchised at the age of 50. I was a textbook case of an economic casualty. But I chose to embrace the change rather than fight it.
Here?s the thing?people are making money working from home on their computers, and I decided that I needed to join them. Difficult? Most certainly. Impossible? No way!
Yes, there is more than enough get-rich-quick-on-the-internet snake oil being peddled out there, but beneath the phony claims, thousands of people are making a living (or better) on the internet.
I?m not saying that everyone could or should blog like I and many others are doing. But at a minimum you can use the internet to grow a local ?bricks and mortar? business, in a way that wasn?t available even ten years ago. One of my best friends is running a very successful trash hauling business here in my neck of the woods and gets nearly all his business from the web. I believe that?s increasingly possible for most businesses.
If you have any idea for a business, fully investigate how you can use the internet to make it work. And if you don?t have any, look closely into ways you can make money on the web. Some ideas include blogging (my favorite!), freelance blog writing for other sites, and providing marketing, technical and administrative support to the many commercial websites and blogs that are out there on the web.
Because of the internet, nearly any skill you have or can acquire can be converted into some form of self-employment, if only as a side business. And these days, that?s looking a lot more secure than the average job.
Have you considered starting some sort of internet business? If not, what?s stopping you?
Great post! I really think you have a great point about security. You can always find more work. Plus, we aren’t at the mercy of benefits from a fickle employer. A high-deductible plan and a HSA provides us with adequate health coverage, and we have IRAs for retirement. My husband is also eligible for a 403b from his job as a professor. But, for most essential “benefits” we rely on getting it ourselves, as a tax deductible part of my home business. It does provide a sense of security, knowing that we don’t have to worry about benefit cuts.
Or layoffs! Hi Miranda–I think job security has become an illusion, you can think your job is secure, but only your employer knows for sure. It’s interesting that there’s plenty of work and opportunity on the web, especially once you get the ball rolling. And it makes sense when you think about it–there’s always work that needs to be done, but an employer may choose either to sub it out or to avoid getting into a new line of work. With a good dose of initiative, just about anyone can tap into that, but it may mean moving out of the comfort zone.
Its the sign of the times, no job is safe anymore. I think its a good idea even for people who have a secure job to work part time in trying to be self-employed. Starting out on your own is all about getting out there and seeing what works and what doesn’t for you. Its much easier to deal with failure when you have a job and the bills are paid.
I completely agree Dan. In most jobs, no matter how secure a job seems, there should be a Plan B–at least for most people. The advantage to starting a business as a side business while you have a job is that you buy time for yourself. Most businesses are NOT overnight successed. If you have a job to pay the bills, you’ll have the time to grow it from scratch.