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May 22, 2015

OECD: Temporary and part-time jobs fuelling inequality

The rise in temporary and part-time jobs in recent decades is partly to blame for the growth of inequality in developed economies, according to a new report by the OECD.

According to the report, around half the jobs created in OECD member states in the last 20 years have been “non-standard”; on temporary contracts or part-time hours. Such jobs are typically less secure and less well-paid than standard employment contracts, fostering inequality.

The report, In It Together: Why Less Inequality Benefits All, states that the gap between rich and poor is at its highest level for 30 years, with the richest 10% of the population in OECD countries earning nearly ten times as much as the poorest 10%. This ratio was 7:1 in the 1980s, and has risen ever since.

The OECD warns that this growth in income inequality is jeopardizing long-term economic growth, estimating it has “knocked 4.7 percentage points off cumulative growth between 1990 and 2010.”

The report notes that non-standard work can be a “stepping stone” to a more stable job in certain conditions, but that “In many countries, younger workers, especially those with only temporary work contracts have a lower chance of moving on to a more stable, career job”.

These findings echo those of IZA World of Labor author Werner Eichhorst, who in his article on fixed-term contracts writes that: “Fixed-term contracts can be a pathway from unemployment to employment, but their potential as a stepping stone to permanent employment is undercut if there is a strong degree of segmentation in labor markets.”

Read more on this story at the Guardian and download the full OECD report here.

Related articles:
Fixed-term contracts by Werner Eichhorst
Temporary agency work by Susan N. Houseman