Reshaping America's Mobile Workforce

Over thirty-five million workers in the United States commute via mobile office workspaces thus America is quickly acquiring a new nickname as; Freelance Nation. The reality of the corporate shift towards more sustainable cost efficient operations also lowering carbon-foot prints enhances competitiveness reducing cost up to 45% in some cases. The jobs that have been lost are unlikely to come back, but those that do are increasingly likely to be freelance, temporary or contract positions based on mobile office networks rather than cozy permanent jobs with expensive overhead and lucrative benefits.

Specifically, in U.S. market we find primarily companies reporting better earnings based on cost controls and productivity gains not a result of sales revenue growth.  Consumer's wallets in America still remain mostly sealed, a symptom of the painful financial mortgage crisis and massive national debt obligations for years to come. 

Although many hope for a quick rebound in jobs in 2010, recent history suggests job recovery is getting increasingly slower and less robust with each passing decade. Infact, the U.S. economy is undergoing deep structural changes, particularly in population shifts as seventy-million baby boomers prepare for semi-retirement. Ushering in a new generation of online junkies that interact via social media networks like Facebook, Twitter, Google, Bing, and Yahoo. This generational shift will require years of transition and extensive access to high quality affordable education using efficient digital Internet technologies.

Since the early 1990s recession, every recovery in hiring has been slower than in previous decades. Three million jobs were lost in the deep recession, which began in July 1981 and ended in November 1982. But by the end of 1983, the number of jobs in the economy had risen above its old peak. In the 1970s and 1980s, job layoffs were in effect temporary. See SBA Report 2010: Small Business Economic Trends 

Labor Market Slack
After the 2001 downturn ended, employment continued to decline for nearly two years and did not return to previous levels until 2005, in the midst of a once-in-a-lifetime real estate boom.

The slack in the labor market is clearly visible. Today, statistics show there over six people per job opening, compared with less than two in 2007. What's more, 40% of the jobless have been out of work for six months or more. Many Americans report unemployment is now a way of life, most seek affordable education and career retraining opportunities. Large percentages of the workforce are being financially pushed into new industries mostly service oriented.

Several economic reasons point to significant shifts that support why jobs won't return to previous levels. For starters, there is competition from low-cost countries like China. Off-shoring of manufacturing is now being followed by off-shoring of software design and other technology services. Over 70% of IBM's employees, for instance, are based overseas; the company slashed its U.S. workforce by about 10,000 in 2009.

This trend has plenty of room to run, as Princeton University economist Alan S. Blinder estimates that up to 29% of all U.S. jobs could be off-shored in the coming decades. This so-called "global wage arbitrage" is largely the result of competitive pressures: If a company doesn't seek out lower labor costs globally, its competitors will.

Internet Technologies Are Reshaping  Jobs
Digital Internet and social media technologies are replacing old industries such as print media.  For example, with digital downloads replacing CD sales, there are fewer record stores and thus fewer employees in record stores. The same holds true with DvD movie rental stores now replaced by NetFlix and Red Box.

Automation and productivity-enhancing technologies such as paperless record-keeping and voice recognition have slashed jobs permanently. Offices which once required a dozen file clerks, for instance, now need fewer workers to input digital records. Regardless of how much sales rise, the positions for workers filing paper will not come back.

As evidence of this trend, the number of workers performing administrative tasks in a physical office location has fallen over 12% since the current recession began just two-years ago.

That suggests that future jobs will bifurcate into two categories: Low-skill ones that require little training and higher-skill ones that require continual upgrading of skill sets to compete on a global level.

Bubble Jobs Disappeared
During the new era increasingly we find traditional skills that once guaranteed a job for decades now may be past as well. For instance, the cost of computer hardware has fallen so low that repairs are often no longer a cost-effective alternative. The people who were trained to repair once-costly hardware are experiencing less work.

In addition to these global business trends, there is another reason some jobs won't be coming back: They were the product of the bubble in credit and housing. However, the pyramid of sub-prime loans has burst with mortgage deliquencies skyrocketing as small and regional banks are being shut down by the Federal government at record pace.  

Fueled by super-low interest rates, exotic mortgages and risky derivatives, growth from the 2001 recession greatly expanded the number of jobs in the financial and construction industries. The housing bust and the global financial meltdown mean the number of jobs in those fields will be much lower than in the boom years. That expansion was a once-in-a-generation speculative frenzy that virtually no one expects to regain to its 2006 levels for many years to come due to massive debt obligations.

Even the two most reliable sectors of job growth, government and health care, are under pressure. As the private economy sheds businesses and jobs, government tax revenues are plummeting. Today, we find many states in huge budget deficits in the billions of dollars. If jobs don't come back, neither will tax receipts, which dropped 7% in the fourth quarter of 2009, supposedly during glimmer of renewed GDP growth. Expect the U.S. GDP to remain flat with 2%-5% growth rates for several years.  

Flexible Labor Trends
For example, more than 26,590 California teachers and other school staff were laid off in 2009 as that state's budget crisis worsened. With the state facing another $20 billion deficit, further layoffs in government are likely.

Faced with a global business environment with few if any guarantees of predictable growth, businesses large and small are seeking flexible and mobile labor forces that reduce overhead costs: Part-time, freelance, contract and temp workers.

A nonpartisan think tank, The Iowa Policy Project, recently estimated that almost 30% of the U.S. workforce are independent contractors, temps, part-timers and freelancers.

Faced with the prospect of higher taxes and higher health-care costs, small enterprises are reluctant to offer full-time permanent jobs. A review of the National Federation of Independent Business (NFIB) study, reveals a sector skittish about adding workers when costs are rising and optimism about business conditions is low.

Wages Under-Pressure
Its simple supply and demand -- more people are increasingly seeking less jobs that means wages are under pressure, too. Indeed, for the 80% of the private workforce which is non-professional and non-supervisory, wages are over 9% lower than they were in 1973, once the numbers are adjusted for inflation.

To some observers, temporary positions simply transfer the risks from the employer to the employees. From the point of view of companies facing intense global competition, however, temp and freelance jobs are simply reflections of the new reality. All business is contingent and nothing is guaranteed to last. While it is tempting to yearn for "the good old days," ; all facts point toward a rapidly evolving interconnected global economy. The key factors require us to reshape the workforce structure based on cost control flexibility, mobile office collaboration and continuous upgrading of educational skills. 

BIO: Mr. Rickman is a respected CEO/Developer living in Oregon. For over 30-years, companies large and small have relied on his innovative business development, Internet marketing/sales and video broadcast services. He is a published sustainable analyst, ghost-writer columnist and co-author worldwide of several books including Eight Billion People.  Mr. Rickman holds advanced business and technical degrees from Boston University. For more information visit: http://www.sustainablevirtualbiz.com  or call (503) 621-4953.