The End of Employment?

Questions to consider.

1. Are wages lower for contract workers than employees? If wages are lower, why?
2. Are transactions costs of hiring, supervising and firing lower for contract workers than for employees? Why or why not?
3. Does employment of contract workers instead of employees increase the firm's flexibility? If so, why?

The End of Employees
by: Lauren Weber
Feb 02, 2017
Click here to view the full article on WSJ.com

TOPICS: Labor Economics

SUMMARY: Never before have big employers tried so hard to hand over chunks of their business to contractors. From Google to Wal-Mart, the strategy prunes costs for firms and job security for millions of workers.

CLASSROOM APPLICATION: Students can examine the rationales for the outsourcing of jobs. The reasons fall into two categories : increased flexibility and lower costs.

QUESTIONS: 
1. (Introductory) What are the reasons covered in the article's cases for companies choosing to outsource jobs?

2. (Advanced) According to the article, what is the effect of the outsourcing of jobs on the likelihood that workers are promoted from lower-level positions to higher-level ones, from the mailroom to the executive suite?

3. (Advanced) Why is it that no one knows how many American work as contractors?

Reviewed By: James Dearden, Lehigh University

Here is a summary: https://www.thefastlaneforum.com/community/threads/the-end-of-employees-wall-street-journal.72709/

See http://www.nakedcapitalism.com/2017/02/the-end-of-employees.html for a contrarian review.

See http://www.forbes.com/sites/lizryan/2015/08/13/is-this-the-end-of-employment/#52b332f332d6 to see advice for a contract worker.