On Short-term Contracts

Division of labour, an idea popularised by Adam Smith in the “Wealth of Nations”, has done human beings no favors when it comes to knowing how to live. Most of us have to be cogs in one large production line, whether we are factory or government workers. It might have made us more “productive”, but has made us less happy, at the same time as we are generally wealthier and healthier.

Unfortunately, more money and better health cannot take the place of happy satisfaction in work. Studies have consistently shown that, even as real income has risen since the Second World War, the graph of life satisfaction has remained flat in the Western world.

Now there is a relatively new threat to the employee: the short-term contract. If you are an employer, you probably love short-term contracts. With the lack of well-paying jobs, young people have no option but to take what they can get, which is, increasingly, a short-term contract – no health benefits, no pension, no sick leave, no paid holiday entitlement.

And for those who don’t know what these benefits are: they have been, in the past, part and parcel of any career for the generation now retiring or retired. The justification is “flexibility”.  The economists call it “productivity”.

Some people have no option but to take a short-term contract.  Why should one have any loyalty to a company with a guillotine hovering over your head? How can one concentrate 100 percent on a good job, fearing that you will be out of work on such-and-such date? (Four years is the average length of these short-term contracts).

Both sides lose: the boss, because the employee is only just about productive after 2-3 years, and then he leaves. There is no continuity and little institutional memory. The customer is constantly dealing with new people.  One can underestimate the importance of this: the buyer in an industrial firm likes to deal with a friendly and knowledgeable supplier, to have a joke, to persuade him to do favors etc.

But, what trumps customer satisfaction is the flexibility of getting rid of people if profit drops a tad. Very convenient. And none of that messy business about firing – just no renewal notice. Meanwhile, everything is dealt with in a short-term manner. The boss looks no further forward than the next profit statement. Where will we all be in fifty years time? I won’t be here to see it, but you might be!

The short-term contract is one of the most anti-humanist devices ever mass-inflicted on a workforce. No Epicurean would indulge in this form of rule by fear.

I have run a manufacturing company and fail to understand how this negative, defensive, hand-to-mouth system can possibly work. Lovers of the “market” will tell you: “That’s the system. Get used to it”.

Those who prefer to treat employees with consideration and respect find the whole idea illustrates the unhealthy balance of power between employer and employee. Already the average American worker works longer hours, with less vacation time and benefits than anywhere else in the world, and it is doubtful if this is useful and effective for companies. Germany runs a very efficient economy and has generous benefits and adequate vacations. Life has to have some meaning other than work, long hours and no security.

Aside from short-term contracts, there is the problem of the low minimum wage. This is a truly Epicurean cause. Companies are paying a pittance and the rest of us taxpayers have to supplement the income of low-wage workers so that they can have enough to eat. This doesn’t make any sense. Why should we have to subsidize Walmart, to name but one company?  And how can the bosses sleep at night knowing that their workers are having to take the taxpayer charity of food stamps (about to be cut significantly by Congress). Epicurus would point to this as evidence of a disfunctional society.

There is a political movement now at local level to raise the minimum wage. Is there a possibility of political action against the short-term contract?

Robert Hanrott, author of the Epicurus Blog


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