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Mapping Europe's Temp Worker Epidemic

As we’ve reported time and time again, once one looks past the headlines extolling the labor market "recovery" in the US, the details of these reports paint a much more discouraging picture. One need only look to the establishment survey – one of two measures used to calculate the Labor Department's monthly jobs figures – which shows that full-time jobs with benefits are increasingly being supplanted by low-paying part-time jobs. In the employment data, many of these jobs are misleadingly double- and triple-counted as the data fail to reflect that many workers are being forced to work two or three part-time jobs, instead of one full-time job.

Unsurprisingly, a recent report from Stratfor reveals that many European countries are struggling with the same problem – except the situation is even more dire. As Stratfor explains, jobs offered under part-time and temporary contracts are accounting for an increasingly large share of total employment, while full-time jobs are disappearing at an alarming clip.

In 2003, well before Europe's economic crisis, 15 percent of workers in the European Union were employed under part-time contracts. By 2015, that had risen to 19 percent. Meanwhile, in the US, about 18% of workers are part-time, according to the most recent data available from the Bureau of Labor Statistics.

But what's even more discouraging is the rise in temporary-contract based employment, which rose from 9 percent of the total to 11 percent between 2003 and 2015. The share of employees working on temporary contracts is as high as 20% in Poland and Spain. As Stratfor explains, relying on temporary work can have a profoundly negative impact on an employees’ long-term marketability.

“Temporary jobs offer less security than even part-time permanent ones. They often come with lower salaries and fewer training and career advancement opportunities, making it harder for workers to access credit, plan their consumption decisions or qualify for unemployment benefits.”

Already, a sizable chunk of Europe’s labor force has been permanently relegated to the ranks of the working poor.

“Since the start of the 2008 crisis, many Europeans have been forced to accept temporary contracts or permanent part-time jobs when they would rather work on a full-time, permanent basis. In many cases, the part-time or temporary contracts do not offer a path to full-time work. In some countries, low salaries also put the working poor at risk of falling into poverty."

Unsurprisingly, the problem is particularly severe along the European periphery, where the recovery from the 2008 financial crash has been haltingly uneven.

“Jobs that do not offer much security can be found almost everywhere in the European Union, but they are particularly prevalent in the south, such as Greece, Spain and Portugal, where the unemployment crisis was more severe and the economic recovery more fragile. In addition, the structure of the economy in Southern Europe is more conducive to the creation of such precarious jobs.”

Countries in central and eastern Europe are also struggling, though Southern Europe bore the brunt of the crisis’s impact.

“Countries in Central and Eastern Europe like Poland and Bulgaria also have high rates of temporary employment or jobs with low salaries. But unemployment rates rose faster in Southern Europe, where the crisis hit harder. High unemployment and insufficient economic growth in that region exposed the fragility of the banking sectors in several countries, raised questions about the sustainability of their public and private debts, and created a fertile ground for the emergence of anti-system political parties that could threaten the survival of the eurozone.”

While a surge in temporary-job creation is normal during the early stages of an economic recovery, the fact that temporary jobs continue to edge out quality full-time work could ripple out through the broader economy as consumers see their spending power curtailed by low wages and a lack of a benefits.

“The creation of temporary and precarious forms of employment is a normal phenomenon during the early stages of an economic recovery.

 

Over time, however, they could drag down an economy by limiting the room for growth in domestic demand, for example. In addition, rising income inequality feeds growing social and political tensions.

 

While unemployment rates are dropping across the board, issues such as job insecurity, low pay, long-term unemployment, and few opportunities for training or career advancement could weigh down Southern Europe's incipient economic recovery.”

Pundits have touted Emmanuel Macron’s victory over Marine Le Pen as evidence that the populist wave in European politics has crested for now; but the economic conditions that enabled the rise of populism haven’t changed.

Indeed, nearly half of the French population voted for one of the two anti-globalization candidates. Expect these policies to continue to resonate as more and more workers are robbed of the dignity and security that accompanies reliable full-time work.