The latest entry in a special project in which business and labor leaders, social scientists, technology visionaries, activists, and journalists weigh in on the most consequential changes in the workplace.
A few days ago, a stranger sat down on a park bench beside me and asked me to help him make a decision. He’d been offered a good job—a good salary, full benefits, and equity—managing a team at a prominent tech company. But like most of the workers at the company, his team would be composed of contractors, who would receive no benefits; they wouldn’t even be allowed to eat the catered lunch provided to the small number of regular employees. Besides the difficulty of retaining and motivating his team, he struggled with the ethics of a business model that would extract value from the people working for him but not provide them with the economic security that he and other high-level employees would enjoy.
A tile street mural in San Francisco dedicated to Dolores Huerta, co-founder of United Farm Workers. (Photo: jejim/Shutterstock)
This situation is increasingly common. A growing number of American workers are falling through the cracks of the odd confluence of labor, health, and social policies that simultaneously prescribe an outsized role for employers in funding and administering social benefits, yet only allocate these benefits, as well as essential legal protections, to certain classes of workers. But we have a chicken and egg problem: Workers must organize to demand better terms from their employers or to put pressure on policymakers to close the loopholes. Yet among the protections many contingent workers lack is a right to organize and access to federal institutions enforcing that right.
A striking feature of the gigging economy is the common use of independent contractors by major companies providing low-skill or unskilled work, like driving a car, delivering groceries, and labeling images. Independent day laborers, domestic workers, and even taxi drivers have long worked this way, of course; what’s new is that companies like Uber, TaskRabbit, and Amazon’s Mechanical Turk dispatch tens to hundreds of thousands of workers daily.
Contractors have historically been highly skilled specialists. These sought-after workers typically negotiate higher hourly rates to offset the greater costs and risks of contract employment, such as purchasing health insurance, covering Social Security taxes, and the lack of unemployment insurance or worker’s compensation. The unskilled nature of tasks fulfilled by today’s contract workers gives these people virtually no bargaining power: behind them stand masses of un- and underemployed, casualties of the jobless recovery, ready and willing to take any work available. Exempt from all federal labor regulation, including minimum wage and maximum hours, occupational health and safety, and anti-discrimination laws, unskilled contractors are in a race to the bottom.
Lacking individual bargaining power, these workers’ best hope lies in collective bargaining. Yet organizing is unlikely among contractors. Most are dispatched to tasks remotely and rarely encounter each other. More importantly, among the federal labor protections from which they are exempted are those guaranteeing the right to organize, established in the National Labor Relations Act of 1935. Most employees are legally protected by the NLRA from retaliation for collective action, including walkouts and strikes, aimed at changing their working conditions. These protections apply to employees whether or not they are represented by a union. Contractors, in addition to a few others like agricultural and domestic workers, enjoy no such protections.
It is difficult, but not impossible, to organize low-skill and unskilled employees, as the early industrial unions did. It is harder still, but not impossible, to organize dispersed workforces, as the Service Employees International Union and home health-care workers have done. It is even possible, though rare, to successfully organize low-skilled workers not protected by the NLRA, as Cesar Chavez did in California’s Central Valley, and as contractor taxi drivers have done in New York City. But taxi drivers, subject to background checks and other regulations, are hard to replace, and farmworkers work together in the fields. There are few models for organizing among this new breed of contractors—atomized, unprotected by the law, and easily replaced.
If bargaining with employers is unlikely to succeed, an alternative is to change the laws. That critical protections and important benefits are not afforded to contractors is a policy choice, not a law of nature. In theory, policies and regulatory frameworks can be revised. Indeed, one of the United Farm Workers’ major successes was the passage of the Agricultural Labor Relations Act, which gave California’s agricultural workers the bargaining rights they lack under the NLRA. The problem is that the primary resource necessary to effectively push for policy changes is the same as that needed to pressure employers: organization.
Policies change only in response to pressure on policymakers. But without a labor party, unions are the primary advocates for policies that protect workers. Even when dedicated advocates exist, American political institutions are, by design, slow-moving and stacked in favor of the status quo. In the area of labor and employment policy, government has been particularly slow to adapt to major changes in the economy. For decades, institutions responsible for enforcing labor protections, like the Department of Labor and the National Labor Relations Board, have operated with funding and staffing appropriate for a much smaller economy, and one in which many more workers had the benefit of union representatives to advocate for them. Given the snail’s pace at which American labor policy is updated, and the poor outlook for organizing workers in the gigging economy, the prospects for reform appear dim.
As for my new friend on the park bench, he wanted to make a statement on behalf of the contract employees. But, mindful of the precariousness of his own employment offer, he didn’t push too hard: he would accept the position only if his team could eat the catered employee lunch. Last I checked with him, the company was still “considering it.”
For the Future of Work, a special project from the Center for Advanced Study in the Behavioral Sciences at Stanford University, business and labor leaders, social scientists, technology visionaries, activists, and journalists weigh in on the most consequential changes in the workplace, and what anxieties and possibilities they might produce.