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Job security is the probability that an individual will keep their job; a job with a high level of security is such that a person with the job would have a small chance of losing it. Many factors threaten job security: globalization, outsourcing, downsizing, recession, and new technology, to name a few. Basic economic theory holds that during periods of
economic expansion An economic expansion is an increase in the level of economic activity, and of the goods and services available. It is a period of economic growth as measured by a rise in real GDP. The explanation of fluctuations in aggregate economic activit ...
businesses experience increased demand, which in turn necessitates investment in more capital or labor. When businesses are experiencing growth, job confidence and security typically increase. The opposite often holds true during a
recession In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various ...
: businesses experience reduced demand and look to downsize their workforces in the short term. Governments and individuals are both motivated to achieve higher levels of job security. Governments attempt to do this by passing laws (such as the U.S.
Civil Rights Act of 1964 The Civil Rights Act of 1964 () is a landmark civil rights and labor law in the United States that outlaws discrimination based on race, color, religion, sex, and national origin. It prohibits unequal application of voter registration requi ...
) which make it illegal to fire employees for certain reasons. Individuals can influence their degree of job security by increasing their skills through education and experience, or by moving to a more favorable
location In geography, location or place are used to denote a region (point, line, or area) on Earth's surface or elsewhere. The term ''location'' generally implies a higher degree of certainty than ''place'', the latter often indicating an entity with an ...
. The official unemployment rate and employee confidence indexes are good indicators of job security in particular fields. These statistics are closely watched by
economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
s,
government official An official is someone who holds an office (function or mandate, regardless whether it carries an actual working space with it) in an organization or government and participates in the exercise of authority, (either their own or that of their su ...
s, and
bank A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...
s. Unions also strongly influence job security. Jobs that traditionally have a strong union presence such as many government jobs and jobs in
education Education is a purposeful activity directed at achieving certain aims, such as transmitting knowledge or fostering skills and character traits. These aims may include the development of understanding, rationality, kindness, and honesty ...
,
healthcare Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health pro ...
and
law enforcement Law enforcement is the activity of some members of government who act in an organized manner to enforce the law by discovering, deterring, rehabilitating, or punishing people who violate the rules and norms governing that society. The term ...
are considered very secure while many non-unionized
private sector The private sector is the part of the economy, sometimes referred to as the citizen sector, which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The ...
jobs are generally believed to offer lower job security, although this varies by industry and country.


Measuring job security

This is a list of countries by job security, an important component in measuring
quality of life Quality of life (QOL) is defined by the World Health Organization as "an individual's perception of their position in life in the context of the culture and value systems in which they live and in relation to their goals, expectations, standards ...
and the
well-being Well-being, or wellbeing, also known as wellness, prudential value or quality of life, refers to what is intrinsically valuable relative ''to'' someone. So the well-being of a person is what is ultimately good ''for'' this person, what is in th ...
of its citizens. It lists
OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate ...
countries' workers' chance of losing their job in 2012, with some non-OECD countries also included. Workers facing a high risk of job loss are more vulnerable, especially in countries with smaller
social safety net The social safety net (SSN) consists of non-contributory assistance existing to improve lives of vulnerable families and individuals experiencing poverty and destitution. Examples of SSNs are previously-contributory social pensions, in-kind and fo ...
s . This indicator presents the probability to become unemployed, calculated as the number of people who were unemployed in 2012, but were employed in 2011 over the total number of employed in 2011.


In the United States

While all economies are impacted by market forces (which change the supply and demand of labor) the United States is particularly susceptible to these forces due to a long history of
fiscal conservatism Fiscal conservatism is a political and economic philosophy regarding fiscal policy and fiscal responsibility with an ideological basis in capitalism, individualism, limited government, and ''laissez-faire'' economics.M. O. Dickerson et al., '' ...
and minimal government intervention. Minimal government intervention has helped the United States create an
at-will employment In United States labor law, at-will employment is an employer's ability to dismiss an employee for any reason (that is, without having to establish " just cause" for termination), and without warning, as long as the reason is not illegal (e.g. f ...
system that applies across many industries. Consequently, with limited exceptions, an employee's job security closely follows an employer's demand for their skills. For example, in the aftermath of the dot com boom of 1997–2000, employees in the technology industry experienced a massive drop in job security and confidence. More recently, in 2009 many manufacturing workers experienced a similar drop in job security and confidence. Closely following market forces also means that employment in the United States rebounds when industries adjust to new economic realities. For example, employee confidence and job security in both manufacturing and technology have rebounded substantially. In the United States job insecurity is higher for men than women, with workers aged 30–64 experiencing more insecurity when compared with other age groups. Divorced or separated workers, and workers with less than a high school diploma also report higher job insecurity. Overall, workers in the construction industry have the highest rate of job insecurity at 55%. The impact of unemployment and job insecurity on both mental and physical health is now the subject of a growing body of research. This will offer insights into why, for example, an increasing number of men in the United States are not returning to work. In 1960, only 5% of men ages 30–35 were unemployed whereas roughly 13% were unemployed in 2006. ''
The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'' attributes a large portion of this to blue collar and professional men refusing to work in jobs that they are
overqualified Overqualification is the state of being educated beyond what is necessary or requested by an employer for a position with the business. There can often be high costs for companies associated with training employees. This could be problematic for c ...
for or do not provide adequate benefits in contrast to their previous jobs. It could also be attributed to a mismatch between the skills employees currently have, and the skills employers in traditionally male dominated industries (such as manufacturing) are looking for. According to data from 2014 employee confidence reports, 50% of all current workers 18 and over feel confident in their ability to find a new job if necessary, and 60% are confident in the future of their employer. Job insecurity, defined as being worried about becoming unemployed, is a concern to 25% of U.S. workers.


Outsourcing

Overseas outsourcing (sometimes called
offshoring Offshoring is the relocation of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Usually this refers to a company business, although state gove ...
) may decrease job security for people in certain occupations such as telemarketers, computer programmers, medical transcriptionists, and bookkeeping clerks. Generally, to outsource work to a different country the job must be quick to learn and the completed work must be transferable with minimal loss of quality.


In Europe

The main difference vis-à-vis the United States is the system of
indefinite contract Indefinite may refer to: * the opposite of definite in grammar ** indefinite article ** indefinite pronoun * Indefinite integral, another name for the antiderivative In calculus, an antiderivative, inverse derivative, primitive function, ...
s. In most European countries many employees have indefinite contracts which, whilst not guaranteeing a job for life, make it very difficult for the employer to terminate a contract. Employees who have legally acquired these rights, for example because they have been with a company for two years continuously, can only be dismissed for disciplinary reasons (after a number of formal warnings and subject to independent
appeal In law, an appeal is the process in which cases are reviewed by a higher authority, where parties request a formal change to an official decision. Appeals function both as a process for error correction as well as a process of clarifying and ...
) or in the case of a company undergoing restructuring (subject to generous laws on
redundancy payments A layoff or downsizing is the temporary suspension or permanent termination of employment of an employee or, more commonly, a group of employees (collective layoff) for business reasons, such as personnel management or downsizing (reducing the ...
and often with
retraining Retraining or refresher training is the process of learning a new or the same old skill or trade for the same group of personnel. Retraining is required to be provided on a regular basis to avoid personnel obsolescence due to technological change ...
paid for by the company). In Spain, for example, such employees are entitled to 45 days redundancy pay per year worked. The high cost of redundancy payments is in practice what gives employees job security. Whilst employees who have such legally binding, indefinite contracts are in the enviable position of knowing that they (and their family) have complete financial security for the rest of their lives, it is important to realise that these obligations work both ways. In some countries such as
Germany Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwee ...
a company may prevent an employee (whose occupational training they have paid for) from leaving to take up a better post elsewhere until compensation is agreed. An employee of a company about to fold may feel compelled to stay with the company, even if they are offered work with a different firm. Every company will have a mix of employees on different types of contract. Indefinite contracts can also exist for seasonal work. These so-called
discontinuous contract Continuous functions are of utmost importance in mathematics, functions and applications. However, not all functions are continuous. If a function is not continuous at a point in its domain, one says that it has a discontinuity there. The set of ...
s mean that a
hotel A hotel is an establishment that provides paid lodging on a short-term basis. Facilities provided inside a hotel room may range from a modest-quality mattress in a small room to large suites with bigger, higher-quality beds, a dresser, a re ...
, for example, may dismiss its staff in the autumn, but it must take the same people back on again the following spring. The proportion of the
workforce The workforce or labour force is a concept referring to the pool of human beings either in employment or in unemployment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic reg ...
on indefinite contracts has fallen across
Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
in response to increased competition and
globalization Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...
. Companies may dismiss an employee just before they reach the two-year mark and then re-hire them as a new employee. Many economists argue that greater
labour market flexibility The degree of labour market flexibility is the speed with which labour markets adapt to fluctuations and changes in society, the economy or production. This entails enabling labour markets to reach a continuous equilibrium determined by the inter ...
is necessary. Economics professors argue that the threat of unemployment is necessary to maintain incentives to high productivity. Meanwhile,
John Kenneth Galbraith John Kenneth Galbraith (October 15, 1908 – April 29, 2006), also known as Ken Galbraith, was a Canadian-American economist, diplomat, public official, and intellectual. His books on economic topics were bestsellers from the 1950s through t ...
has argued in ''
The Affluent Society ''The Affluent Society'' is a 1958 (4th edition revised 1984) book by Harvard economist John Kenneth Galbraith. The book sought to clearly outline the manner in which the post– World War II United States was becoming wealthy in the private s ...
'' that some established economics professors simultaneously seek tenure. Jobs that are not backed by an indefinite contract are still poorly regarded in many European societies, often disparagingly described as "precarious" or "
McJobs "McJob" is a slang term for a low-paying, low-prestige dead-end job that requires few skills and offers very little chance of advancement. The term "McJob" comes from the name of the fast-food restaurant McDonald's, but is used to describe any l ...
"—even when the company has good prospects. In less regulated European economies, such as the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...
, it is much cheaper to sack permanent employees. In Britain, employees are only entitled to a legal minimum of one week's redundancy pay per year worked (one and a half weeks for workers over 40 years old). Instead, private- and public-sector employees who feel they have been unfairly dismissed have the right to take the company to an
Employment Tribunal Employment tribunals are tribunal public bodies in England and Wales and Scotland which have statutory jurisdiction to hear many kinds of disputes between employers and employees. The most common disputes are concerned with unfair dismissal, ...
in order to be re-instated or to obtain extra compensation. It is not necessary to go through the normal
court system A court is any person or institution, often as a government institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accorda ...
. In
Sweden Sweden, formally the Kingdom of Sweden,The United Nations Group of Experts on Geographical Names states that the country's formal name is the Kingdom of SwedenUNGEGN World Geographical Names, Sweden./ref> is a Nordic countries, Nordic c ...
, employment contracts can be time-limited, and can be extended for new time-limited periods, or not, without reason. This is only allowed for the first two years of employment. At expiration the employee will stand without job and without compensation if no extension takes place. Once with an indefinite contract the employer may only lay off people for strong valid reason. One reason could be for the employer needing less workers. In that case the general law is the person who hold their employment the longest are the last when losing their job. In all
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
countries an employee retains their existing contractual rights if their company is taken over under the
Acquired Rights Directive The Transfers of Undertakings Directive''2001/23/ECis a European Union law that protects the contracts of employment of people working in businesses that are transferred between owners. It replaced and updated the law previously known as the Acquir ...
(in the UK, known as
TUPE The Transfer of Undertakings (Protection of Employment) Regulations 2006 known colloquially as TUPE and pronounced , are the United Kingdom's implementation of the European Union Transfer of Undertakings Directive. It is an important part of UK la ...
) so the years spent working for the old company would count when calculating redundancy payments, etc.


In India

In India job security is high as
Indian labour law Indian labour law refers to law regulating labour in India. Traditionally, the Indian government at the federal and state levels has sought to ensure a high degree of protection for workers, but in practice, this differs due to the form of gove ...
make firing difficult for permanent employees. Most Indians work till retirement in the same company apart from workers in some sectors such as technology. Due to large population, competition is high but so is the size of the job market.


See also

* Dismissal * First Employment Contract (a French contract that provoked massive protests before being finally repealed) *
Contingent work Contingent work, casual work, or contract work, is an employment relationship with limited job security, payment on a piece work basis, typically part-time (typically with variable hours) that is considered non-permanent. Although there is less j ...
* Flexicurity *
Full employment Full employment is a situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural and frictional, may remain. F ...
*
Job guarantee A job guarantee is an economic policy proposal that aims to provide a sustainable solution to inflation and unemployment. Its aim is to create full employment and price stability by having the state promise to hire unemployed workers as an emp ...
*
Permatemp Permatemp is a U.S. term for a temporary employee who works for an extended period for a single staffing client. The word is a portmanteau of the words '' permanent'' and ''temporary''. There are two types of permatemp employment relationships. ...
*
McJob "McJob" is a slang term for a low-paying, low-prestige dead-end job that requires few skills and offers very little chance of advancement. The term "McJob" comes from the name of the fast-food restaurant McDonald's, but is used to describe any l ...


References


External links


Outline of U.S. Economy
{{DEFAULTSORT:Job Security Employment Occupations