Giving ‘precarious’ jobs a bad name

Precarious employment just plain sounds unpleasant. Calling something precarious makes it seem like a problem. Technically, though, precarious employment generally just refers to work that is part-time, contract, or temporary, often with few or no benefits. Some say that kind of work is, in fact, a problem and they want laws to fight precarious employment. But just because we call this work precarious doesn’t necessarily make it something to fight. It doesn’t necessarily even make it undesirable.

Big unions are lobbying for more job-security regulations in the name of reducing job precariousness. A recent report from the Mowat Centre also recommended that governments more strictly enforce employment standards, ensure companies don’t misclassify employees as independent contractors, and look into whether independent contractors should be given “additional protections.”

Don’t expect these ideas to work. Attempts to “protect” workers from low wages have failed. In addition to not reducing poverty — partly because few minimum wage earners belong to poor households — empirical studies overwhelmingly show that minimum-wage legislation reduces employment, especially among unskilled workers. Those who do get work will often still lose hours, training opportunities, and other forms of non-wage compensation.

Expect similar attempts to “protect” workers from precarious employment to backfire. They have in Europe, as a C.D. Howe Institute report this month highlighted. It noted that European attempts to minimize precarious employment have led to “undesirable results, such as lower job creation.” In the Netherlands, legislation aimed at curbing precarious employment was found to have resulted in lost jobs and actually hurt precarious workers. The C.D. Howe report concludes by warning against “blunt legislative tools” to combat precarious employment, especially since it is often a stepping stone to better jobs.

In fact, despite it being given a bad name, there are a lot of people who prefer employment we call “precarious.” The category, after all, includes self-employment, which is partly fuelling the growth of precarious work. So why would we want fewer entrepreneurs? A paper published last year by Philip Cross, a former chief economic analyst at Statistics Canada, noted that the “increase in self-employment in recent years in absolute terms (even as their share of employment fell) has been driven by older workers choosing to start a new career or business.” He pointed to regional data suggesting people were choosing self-employment because of the benefits of being your own boss.

Temporary and part-time jobs are also overwhelmingly taken by choice, not forced by circumstance. C.D. Howe cites data from the OECD suggesting that only one-quarter of Canadians in temporary jobs would prefer permanent positions. Similarly, according to Statistics Canada, 74 per cent of workers in part-time positions are not looking for full-time work, a figure that rises to 81 per cent for workers aged 15 to 24.

In other words, for a significant majority of part-time workers, the so-called precariousness of their employment is a feature, not a bug. This fact is often ignored by those who most loudly decry precarious work. Earlier this year, a public-sector union in Toronto claimed that precarious work is “the monster that is the greatest threat to our generation.” It complained that about 50 per cent of its workers were in precarious positions. But of those, half were in a position requiring no previous work experience and filled by workers as young as 14 years old. A high school student working a dozen hours a week isn’t clamouring for salvation from his or her “precarious” employment.

Of course there are people working precarious jobs who do want more traditional employment, and their plight should not be ignored. Strengthening the social safety net, as both the Mowat Centre and C.D. Howe reports recommend, might help. But here’s another suggestion: Make it easier for employers to hire full time by reducing government interference, not adding yet more rules to it. For example, some companies are known to keep workers on contract to skirt extra costs like CPP contributions, as the Mowat Centre report points out. Yet, the government just made that burden even heavier, by expanding the CPP.

In a normal labour market it isn’t just workers who compete for employment; employers have to compete to attract better workers, too. When we see less-thanoptimal employment arrangements, a likely culprit is distortions imposed by the government.

FOR MOST WORKERS, HAVING WORK THAT’S ‘PRECARIOUS’ IS A FEATURE, NOT A BUG.

SPENCER PLATT / GETTY IMAGES There are a lot of people who prefer employment we call “precarious.” The category, after all, includes selfemployment. Why would we want fewer entrepreneurs?