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Benefits plans give you a degree of control over a wide range of expenses related to your health and well-being.Chalabala

There are worse things than unpaid internships for young adults.

Like temporary work, for example. Short-term contracts and casual or seasonal jobs put people at a big disadvantage to those with full-time work. You often get paid less in salary, but that understates the problem because full-time workers typically receive a wide range of benefits that are typically unavailable to temporary staff.

Unpaid internships are symbolic of the troubles that young adults have in building their careers after graduating from college or university. Bank of Canada Governor Stephen Poloz thinks they're worthwhile as an alternative to not working at all, but there's growing opposition to the idea of grads working for free.

Anger about unpaid internships is justified, but we're dealing here with a transitional period in a young adult's life. Temporary work can mean years, decades or even a lifetime of second-class financial status in the workplace.

Temporary work has been on the rise for all workers, but it's particularly an issue for young adults. Statistics Canada data for 2013 show that 13.4 per cent of all workers were considered temporary, compared with 29.9 per cent of workers aged 15 to 24.

When you're an experienced worker with skills and contacts, contract work can be glamourized as "consulting." For millennials just starting out in the work force, contract work is financially marginalizing in ways that aren't immediately apparent because they're related to workplace benefits that pay out over time.

Data from the benefits consulting firm Morneau Shepell show the annual cost of benefits per employee ranges from $1,500 at the low end to $6,000 for executives, with employers typically paying 85 per cent of that amount on average, and workers the rest. On average, the total cost of benefits would be about $3,500 annually per employee. There's economic value here that has to be considered in analyzing the disadvantages of contract work at any age.

People who have a workplace benefits plan tend to appreciate it. The pharmaceutical company Sanofi sponsored a health care survey a few years ago in which participants were asked to choose between $10,000 in cash and their health benefits. Fifty-nine per cent chose to keep their benefits, 31 per cent opted for cash and 10 per cent didn't know.

The reason is that benefits plans give you a degree of control over a wide range of expenses related to your health and wellbeing. You may be in the prime of life as a young adult, but what if you wear glasses? Riza Sychangco, a partner at Morneau Shepell, said an average type of benefits plan would offer $200 to $400 every two years to cover glasses or contact lenses.

College and university students may put off seeing a dentist to avoid the cost, but eventually you need to take care of your dental health. A dental plan would cover most of the cost of your checkups and hygiene appointments at least, and possibly 50 per cent of major procedures such as a crown if you broke a tooth.

Need a prescription? Ms. Sychangco said pretty much all benefits arrangements offer some sort of a drug plan. Need some treatment for a sports injury? Paramedical services such as massage and chiropractic are typically covered. Feeling badly stressed out? Many benefit plans include an Employee Assistance Plan, or EAP, which covers the short-term costs of talking to a counsellor or social worker.

The higher cost of living for contract workers really becomes an issue when they marry and have kids. If neither spouse has a benefits plan, the cost of one round of dental visits for a family of four could be between $500 and $1,000. Older kids may need orthodontics, which can easily cost several thousand dollars per child. Ms. Sychangco said some dental plans cover 50 per cent of orthodontic fees.

Another benefit of a workplace benefits plan is group life insurance. You should have your own term life coverage in case you change jobs, but group life is a good backstop in case you can't afford it.

Benefits plans as a whole are an insurance policy unto themselves. Many offer some form of long-term disability coverage, and the drug plan can be life saver if you require expensive drugs to treat a chronic condition. Ms. Sychangco said the cost of the rheumatoid arthritis treatment Remicade can run to $28,000 a year.

Employers like contract work because they save a lot of money on benefits and stay flexible in managing their work forces. But let's recognize the extent to which workers of all ages are the poorer for this trend.

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