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"Employee-centric" strategies could lead to fragile households

Employers will face greater pressure to provide more flexibility in benefits packages and work policies; they are likely to respond by disaggregating benefits or flexibility options and letting employees pick and choose. Employees with less bargaining power or in less skilled industries will face fewer choices.

RAND writes,

As the economy continues to shift more to services and as the workforce itself changes, so too will there be changes in what workers demand of their employers, to include more personalized benefits packages and flexibility about where and when they do their work. The aging of the workforce will continue to strain the ability of American businesses to maintain productivity and profit margins while at the same time providing full-spectrum benefits packages that include health care, long term care insurance, and pensions. Employers are likely to respond to this challenge by turning toward an “employee-centric” construct in which workers choose from a number of benefit packages that vary in heath care and pension provisions, and that offer such “voluntary” options as short term disability and accident insurance. Yet the choices for older workers are bound to increase with the demand for them; the poorer and less skilled will face more meager “employee-centric” options.

At the same time, workers want to spend fewer hours on the job – especially older workers who, for financial or other reasons, are disinclined to retire fully – work outside traditional business hours; and work at home. While the 2009 Bureau of Labor Statistics “American Time Use Survey” indicates that 24 percent of all employed persons did some or all of their work at home, this percentage is 40 percent for those over the age of 25 holding a bachelor's degree or higher, but only 10 percent for those with less than a high school diploma. This divide is Robert Reich's distinction between “symbolic analyst” and “in person” service providers – the former doing research, programming, management, and other intellectual labor and the latter working as the physical purveyors of on-site services. Again, poorer, less skilled people will fall on the in-person side of the divide, and have less opportunity to trade space for time.

Implications

IFTF writes that this drive toward personalization of work lifestyles can widen inequality in household resilience. If workers start making tough choices about opting out of benefits, they make themselves much less resilient in the face of family disasters - for example, a worker with no short-term disability who gets injured could be driven right into chronic medical debt. This could be exacerbated if they have fewer options about how and where they work and the smallest disruption in their routine could jeopardize their job. Ultimately, these policies could help make wealthier, more-skilled workers more resilient, and less-skilled, poorer workers, more fragile.

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Sources:

RAND, Nov 2010, page 7-9: http://newsletters.clearsignals.org/RAND_Nov2010.pdf#page=7

Occupational Outlook Handbook, 2010-11 Edition, Bureau of Labor Statistics, United States Department
of Labor, 12/17/2009. Accessed 11/1/10 at: http://www.bls.gov/oco/oco2003.htm

State of Metropolitan America: On the Front Lines of Demographic Transformation, Brookings
institution Metropolitan Policy Program, 2010.

Unum, “HR Trends and Challenges: The Changing U.S. Demographic, Economic, and Social Landscape of the Workplace”, LIMRA International, 2007. Accessed 11/3/10 at: http://forms.unum.com/StreamPDF.aspx?strURL=/FMS_068162-1.pdf&strAudience=StreamByNumber

“American Time Use Survey – 2009 Results”, Bureau of Labor Statistics, United States Department of Labor, 22 June 2010. Accessed 11/1/10 at: http://www.bls.gov/news.release/atus.nr0.htm

See Robert Reich, The Work of Nations: Preparing Ourselves for 21st Century Capitalism, (New York: Alfred A. Knopf, 1992)