The State at Work: Public Sector Employment in Ten Western Countries

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Nationally, state and local governments employed about 7. That's approximately public employees for every 10, Americans, according to Governing calculations of Census survey data. Including teachers and those working in education, the total more than doubles to about Across states, government employment statistics vary greatly. Unique circumstances tend to account for high or very low concentrations of public employment. Wyoming, for example, employs the most public employees per capita largely due to the public hospitals that it operates.

The U. Most countries throughout the world allow employers to dismiss employees only for cause. Some reasons given for our retention of the at-will presumption include respect for freedom of contract, employer deference, and the belief that both employers and employees favor an at-will employment relationship over job security. At-will means that an employer can terminate an employee at any time for any reason, except an illegal one, or for no reason without incurring legal liability.

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Likewise, an employee is free to leave a job at any time for any or no reason with no adverse legal consequences. At-will also means that an employer can change the terms of the employment relationship with no notice and no consequences. For example, an employer can alter wages, terminate benefits, or reduce paid time off. In its unadulterated form, the U.

The at-will presumption is a default rule that can be modified by contract. For example, a contract may provide for a specific term of employment or allow termination for cause only. Typically, U. Collective bargaining agreements usually provide that represented employees may only be terminated for cause.


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Cause generally includes reasons such as poor employee performance, employee misconduct, or economic necessity. An employment contract may specifically outline the situations or employee actions that would lead to termination for cause. Over the years, courts have carved out exceptions to the at-will presumption to mitigate its sometimes harsh consequences. The three major common law exceptions are public policy, implied contract, and implied covenant of good faith.

The at-will presumption is strong, however, and it can be difficult for an employee to prove that his circumstances fall within one of the exceptions. Further, not all of the exceptions are recognized by all jurisdictions. States that recognize the public policy exception vary significantly in how broadly or narrowly it is construed. The majority of states accept only public policy expressed in state constitutions and statutes. A minority also allow additional sources that may include administrative rules and regulations, professional codes of ethics, and broader notions of public good and civic duty.

Implied contracts of employment are recognized in 41 states and the District of Columbia, but even where recognized may be difficult for a plaintiff to prove.

An implied contract may be created in several different ways. Oral assurances by a supervisor or employer representative e. The list of examples above is not exhaustive. As a general rule, courts disregard language promising long-term, lifetime, or permanent employment as aspirational and consider the relationship to be at-will.

Employers can further protect themselves by using a clear and unambiguous disclaimer on written materials stating that its policies and procedures do not create contractual rights. Employers can also reserve the right to modify policies and procedures at any time. A minority of states recognize an implied covenant of good faith and fair dealing in employment relationships. Judicial interpretations of this covenant have varied from requiring just cause for termination to prohibiting terminations made in bad faith or motivated by malice.

Examples of bad faith terminations include an employer firing an older employee to avoid paying retirement benefits or terminating a salesman just before a large commission on a completed sale is payable. There have been relatively few cases in which employers were found liable under an implied covenant of good faith and fair dealing theory. By aggregating data on candidates and job openings across entire countries or regions, they may address some geographic mismatches and enable matches that otherwise would not have come about.

Finally, online talent platforms help put the right people in the right jobs, thereby increasing their productivity along with their job satisfaction. They can draw people who are engaged in informal work into formal employment, especially in emerging economies. Both of these effects could increase output per worker, raising global GDP. While independent work is nothing new and self-employment is still the predominant form of work in emerging economies , the digital enablement of it is. MGI research finds that 20 to 30 percent of the working age population in the United States and the European Union is engaged in independent work.

Just over half of these workers supplement their income and have traditional jobs, or are students, retirees, or caregivers.


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  4. While 70 percent choose this type of work, 30 percent use it out of necessity because they cannot find a traditional job at all, or one that meets their income and flexibility needs. The proportion of independent work that is conducted on digital platforms, while only about 15 percent of independent work overall, is growing rapidly, driven by the scale, efficiency, and ease of use for workers and customers that these platforms enable.

    How automation and technology are affecting work

    Such platforms include Uber, Etsy, Didi, and others. While those who pursue independent work digitally enabled or not out of preference are generally satisfied; those who pursue it out of necessity are unsatisfied with the income variability and the lack of benefits typically associated with traditional work. Policy makers and innovators will need to grapple with solutions to these challenges.

    Developments in employment, income, and skills

    Even while technologies replace some jobs, they are creating new work in industries that most of us cannot even imagine, and new ways to generate income. One-third of new jobs created in the United States in the past 25 years were types that did not exist, or barely existed, in areas including IT development, hardware manufacturing, app creation, and IT systems management. The net impact of new technologies on employment can be strongly positive.

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    The growing role of big data in the economy and business will create a significant need for statisticians and data analysts; we estimate a shortfall of up to , data scientists in the United States alone in a decade. Digital technology also can enable new forms of entrepreneurial activity. Workers in small businesses and self-employed occupations can benefit from higher income earning opportunities. A new category of knowledge-enabled jobs will become possible as machines embed intelligence and knowledge that less-skilled workers can access with a little training. In India, for example, Google is rolling out the Internet Saathi Friends of the Internet program in which rural women are trained to use the Internet, and then become local agents who provide services in their villages through Internet-enabled devices.

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    The services include working as local distributors for telecom products phones, SIM cards, and data packs , field data collectors for research agencies, financial-services agents, and paratechnicians who help local people access government schemes and benefits through an Internet-based device. We have yet to reach the full potential of digitization across the global economy.

    Making sure that digital gains are accessible to all could provide significant value. And though other challenges, too, remain, they could be addressed by exploring several solution spaces—for instance, through evolving education systems or by pursuing public-private partnerships to stimulate investment in enabling infrastructure. Digital technologies are creating major new opportunities for workers and companies, in both advanced and developing economies, but there are significant variations within and across countries and sectors.

    Our use of the term digitization and our measurement of it , encompasses:. In measuring each of these various aspects of digitization, we find relatively large disparities even among big companies Based on these measures, a few sectors are highly digitized—for example, financial services, media, and the tech sector itself.

    These tend to be among the sectors with the highest productivity growth and wage growth. Many others are much less digitized, including healthcare, education, and even retail. These tend to be the largest share of the economy in terms of GDP and the lowest-productivity sectors. Similarly, companies are digitizing unevenly.

    Companies that are digital leaders in their sectors have faster revenue growth and higher productivity than their less-digitized peers. Their profits and margins can increase three times as fast, and workers within these companies enjoy double the wage growth. Digitization will continue to change how companies organize work, as well as the mix of work in any given sector. All this will require ongoing adaptation and transition by workers in terms of skills, activities, companies, and even the sectors they work in. Clearly, we are still in the early stages of how sectors and companies use digital technologies, and there is considerable unevenness.

    From country to country, too, there are significant divergences.

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