4) (4 points) Income insurance. a) (2 points) What is the difference between tra

Question

4)      (4 points) Income insurance.

a)      (2 points) What is the difference between traditional “jobs” and “gigs”? Why might workers prefer one or the other? Why might employers?

b)       (1 point) What has happened to the share of American workers with steady jobs the 1970s? Who is responsible for the decline of “jobs”: does it reflect worker preferences or employer preferences? Why do you conclude this?

c)       (1 point) Would it be desirable to provide workers with some other form of income security? What might be done to make up for the decline in employer-provided income security?

Explanation / Answer

a) Gigs can be defined as a job that is temporary and that has an uncertain future. The gigs don't give any job security or permanent income security the employee. On the other hand, a traditional job gives an income security and a job security because these jobs are permanent in nature or the employee generally can rely on these jobs. They are capable of giving a better standard of living and a continuous income.

Workers prefer traditional jobs because of the job security and continuous income they provide. Gigs or irregular jobs don't provide all this.

An employer might prefer gigs because of uncertain nature of the business market. The temporary worker gives flexibility for the employer to hire and fire them according to the market condition. If his business is working well he might hire more immediately but if his business is not going well he will just fire the excess labor.

b) The Share of American workers with steady jobs remains stable till 2000 but after that, it is down by 50% and is continuously declining.

The employers are responsible for this situation. The manufacturing industry has shifted away from the US to the places where labor wage is cheaper, this allows them to reap better profit by manufacturing those good away and exporting all over the world.

c) Yes, it's extremely desirable to provide the workers with an income insurance. Its certain benefits are mentioned below:

The government can launch certain initiatives like an insurance plan, providing the right skill to the people for jobs that might arise in future like IT sector etc. Providing some incentive for the manufacturing sector to manufacture in the country itself.   

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