Furthermore, productivity increases do not always lead to increased wages, as can be seen in the United States, where the gap between productivity and wages has been rising since the 1980s.Researchers at the Overseas Development Institute argue that there are differences across economic sectors in creating employment that reduces poverty. 24 instances of growth were examined, in which 18 reduced poverty. This study showed that other sectors were just as important in reducing unemployment, such as manufacturing. The services sector is most effective at translating productivity growth into employment growth. Agriculture provides a safety net for jobs and economic buffer when other sectors are struggling. Models of the employment relationship
Scholars conceptualize the employment relationship in various ways. A key assumption is the extent to which the employment relationship necessarily includes conflicts of interests between employers and employees, and the form of such conflicts. In economic theorizing, the labor market mediates all such conflicts such that employers and employees who enter into an employment relationship are assumed to find this arrangement in their own self-interest. In human resource management theorizing, employers and employees are assumed to have shared interests (or a unity of interests, hence the label “unitarism”). Any conflicts that exist are seen as a manifestation of poor human resource management policies or interpersonal clashes such as personality conflicts, both of which can and should be managed away.
To categorize a worker as an independent contractor rather than an employee, an independent contractor must agree with the client on what the finished work product will be and then the contractor controls the means and manner of achieving the desired outcome. Secondly, an independent contractor offers services to the public at large, not just to one business, and is responsible for disbursing payments from the client, paying unreimbursed expenses, and providing his or her own tools to complete the job. Third, the relationship of the parties is often evidenced by a written agreement that specifies that the worker is an independent contractor and is not entitled to employee benefits; the services provided by the worker are not key to the business; and the relationship is not permanent.As a general principle of employment law, in the United States, there is a difference between an agent and an independent contractor. The default status of a worker is an employee unless specific guidelines are met, which can be determined by the ABC test. Thus, clarifying whether someone who performs work is an independent contractor or an employee from the beginning, and treating them accordingly, can save a company from trouble later on.