In today’s rapidly evolving job landscape, the rise of non-employee workers has become a significant trend. Increasingly, individuals are performing the same roles as traditional employees but without the associated job security or career prospects. This shift has profound implications for workers’ wages and overall job satisfaction. In this article, we’ll explore the various categories of disposable workers and the broader effects of this trend on our economy and society.
Yves here. While I was aware that many workers were being shifted to non-employee status, even while doing the same job at the same location daily, I was astonished to learn that they now represent over one-third of all positions. It’s no surprise that real wages have remained stagnant over time. The campaign to undermine labor bargaining power has been unyielding. The idea of staff being treated as expendable contradicts the principle that has long defined successful companies: “Our employees are our greatest asset.” Consequently, mediocrity and a decline in quality have become rampant.
Yet, as we highlighted in a previous post, pushback is on the rise. Both New York City and New Jersey are scrutinizing how Amazon employs subcontractors to evade liability for drivers, while also enforcing rigorous schedules and lower wages than those paid by competing delivery services like UPS.
By Paul Osterman, Professor Emeritus, MIT Sloan School, Massachusetts Institute of Technology. Originally published at The Conversation
Every day as I leave my Boston condominium, I greet the concierge, who is employed by a contracting company supplying staff to residential buildings. During interviews at nearby offices, I often notice that the night cleaners are also contractors. The individual who prepares my lunch sandwich is a part-timer without any career advancement opportunities.
When my desire to eat healthily fails, and I indulge in Doritos, I recall that the tasters hired by PepsiCo to assess the chips’ addictiveness are also contractors.
These examples illustrate what I term “disposable jobs.” Individuals in these positions work on-site for employers who offer no commitments regarding job security or career development. My research indicates that over one-third of U.S. workers are considered disposable, totaling nearly 57 million full- or part-time workers out of the 162 million people in the nation’s workforce.
I am a labor economist. In my upcoming book, “Disposable Workers: The Transformation of Employment,” I delve into the reasons behind this trend, the various forms it takes, its prevalence, and its societal consequences, along with potential solutions.
Three Distinct Categories
To gain deeper insights, I conducted a nationally representative survey of over 6,000 individuals in late 2022 and interviewed nearly 100 workers, employers, and policymakers.
I identified three categories of disposable workers:
1. Contractors employed by staffing firms but working at a client’s location. These include temporary office workers, cleaners, and security guards. While many earn low wages, some, such as travel nurses, receive high compensation. My survey shows this group makes up 13% of the workforce.
2. Freelancers working for organizations without being classified as employees. This category includes Uber and Lyft drivers, food delivery personnel, computer programmers, and freelance journalists. According to my survey, these organizational freelancers constitute 5% of the workforce. However, I exclude those freelancers who work directly for individuals, like dog walkers and handymen, as I focus on employer-employee relationships.
3. Marginal workers employed by companies but lacking career advancement opportunities. These roles experience high turnover rates built into their structure. My survey indicates that marginal workers represent 17% of the workforce.
Understanding marginal work is essential due to its scale, as these jobs may appear standard yet are designed to be disposable.
Who Are Marginal Workers?
Staff attorneys are a prime example of marginal employees. Hired by law firms, they lack a path to partner promotion. Unlike their career-focused counterparts, they have no job security, often employed for the grunt work on specific cases with no guarantee of continued employment as business needs change.
Adjunct professors serve as another clear example. This group encompasses part-time instructors and full-time contract faculty, but in either case, they lack job security and a path to obtain tenured positions.
In 1970, individuals with tenure or tenure-track roles comprised 73% of college and university faculty. By 2021, that figure had dropped to just 32%, with the remainder being adjunct instructors or contract faculty.
Part-Time Marginal Workers
Part-time workers represent another aspect of marginal employment.
Employing part-time staff is more cost-effective for companies in comparison to full-time employees. Analysis reveals that part-time positions offer hourly wages about 20% lower than those of full-time jobs, factoring in variables like age, education, occupation, and industry. The wage gap widens by an additional 5% when considering benefits.
Employers also benefit from higher turnover rates
. This allows them to easily adjust workforce size while minimizing investments in career development.
In interviews conducted by a research team led by professor Susan Lambert, many low-wage employers stated that they employed part-timers to enhance workforce flexibility. One manager remarked that the constant churn of part-time employees negated the need for temporary workers.
“Temp workers? We don’t need them,” he stated. “Just wait a day for turnover.”
Following the full implementation of the Affordable Care Act in 2014, evidence surfaced that many employers sought to maximize the number of part-time employees instead of full-timers with benefits.
The ACA mandates that employers with over 50 employees either provide health insurance or assist employees in obtaining it, but only for those working 30 or more hours per week. Otherwise, they face, as of 2026, a penalty of $3,340 per uninsured employee.
Another research team analyzed part-time employment trends across three low-wage industries – retail, hotels, and restaurants – before and after the Affordable Care Act’s rollout. They discovered that the number of part-time workers increased by 500,000 in the years following the ACA’s implementation, suggesting companies were expanding their part-time workforce to reduce health insurance costs associated with standard employment.
What Drives This Trend?
Why are employers increasingly leaning towards disposable workers?
A major motivation is cost reduction. Hiring freelancers and contractors allows companies to sidestep mandatory benefits like Social Security contributions and health insurance costs for larger firms.
While marginal workers do receive these benefits, the high turnover rates inherent in their roles enable employers to invest less in training and reduce management costs typically linked to layoffs and fair treatment practices on the job.
Moreover, many employers harbor a lack of respect for the contributions of front-line employees. A 2023 report from McKinsey revealed that 5% of employees generate 95% of “an organization’s value.”
Although I dispute this claim, it nevertheless reflects the prevailing attitude within McKinsey and the firms they consulted toward the remaining 95% of workers, viewing them as expendable.
Lower Pay and Job Satisfaction
My survey indicated that contractors, freelancers working for employers, and marginal employees all earn less than their full-time counterparts.
Additionally, significantly fewer contractors and marginal workers reported job satisfaction compared to regular employees. In contrast, freelancers tend to be more content due to their ability to choose their work hours and locations.
The wider public also bears the consequences of relying on disposable workers. Research has shown that hospital infection rates increase when cleaning staff are contracted out and that contractors contribute to a higher incidence of industrial accidents.
