The Precarious Workplace

UNCOMMON SENSE 30 February 2016

By David Bensman, Professor at the School of Management and Labor Relations at Rutgers University.

Work is becoming increasingly precarious for most American workers.  In part this is because many people who previously worked as employees are now working under contract.  As a result, they lack the legal rights of employees as defined by federal legislation, including the National Labor Relations Act , the Fair Labor Standards Act, the Occupational Safety and Health Act, and the Equal Employment Opportunities Act.   Contract workers don’t have the right to engage in collective action, they lack protection against discrimination, and they don’t have access to social insurance programs like Social Security, unemployment compensation, and workers’ compensation.   Lacking protection by the Occupational Safety and Health Administration, they experience more accidents and suffer more health impacts than employees.

Employers adopted labor contracting as a business model because it reduced not only their legal responsibilities but also their payroll costs. Not having to pay into Social Security, Unemployment Insurance, and Workers’ Compensation funds means that a contract worker typically costs an employer 30% less than an employee.

It is not only contract workers who are experiencing precarious work, however. Many employees now lack the power to protect their rights, standards, and norms. In part this is because the overwhelming majority of workers lack union protections; in the private sector, only 6.6% belong to unions. Workers who don’t have unions often are so powerless that they have to surrender their right to go to court against employer mistreatment as a condition of employment. Even public sector workers who have union representation increasingly find that their organizations cannot protect employees whose pensions have been reduced by the state legislature, or, for example, Chicago school teachers with seniority who have been laid off so that the school Administration can replace their schools with charter schools.

In precarious workplaces, people have no security and scant prospect of gaining any. They may be put to work by a staffing agency; they may be given part-time hours by their employer, or they may be paid under the table. Their work schedules are increasingly unstable. Skilled or professional workers with full-time jobs are increasingly replaced by less-skilled, part-time workers. Even if they are in a “skilled” position, they are increasingly responsible for paying for their own training and retraining. They receive few or no benefits from the enterprise, no health coverage, pension contribution, or stock option. Not only do they lack career ladders;they lack careers. Their resumés show a succession of jobs with painful gaps. Working for no remuneration – interning, looking for jobs, networking, writing resumés, receiving job counseling, training, or retraining, returning to school, professional development – these are all the responsibility of workers trapped in the precarious world of work, and these activities eat up a lot of time.

Taken together, the weakening of legal protections and of unions, the weakening of seniority protections, the dismantling of job ladders, and the withdrawal of social insurance have produced rampant insecurity.   Women, young workers, and people of color have been disproportionately affected by growing precarity, but even white men in their forties and fifties have been experiencing decreasing job tenure.

There have been a variety of proposals aimed at restoring security and raising labor standards. A Basic Guaranteed Income would increase workers’ bargaining power and might force companies to offer employment with legal protections, benefits, job ladders, and safe and healthy working conditions.   Recently, as the growing precarity of work has become a frequent topic of public discourse, interest in the Basic Guaranteed Income has grown. A national job guarantee for all workers would have a similar positive impact on workers’ bargaining power by creating a much tighter labor market. It might also make it possible for the nation to meet its need to improve infrastructure, housing, human services, and energy efficiency.

A second approach would be to intensify labor law enforcement. Misclassification, wage theft, and discrimination in hiring and firing have become increasingly common as governments have cut back funding for regulatory agencies. In the past decade, as states have learned how much revenue they are losing due to unpaid taxes and contributions to insurance funds, some have begun to renew enforcement programs at the municipal, state, and federal level.

A third approach would be to legislate new labor protections. Campaigns for paid sick leave, fair schedules, and increased minimum wages have been achieving success in many states and cities, emboldening advocates to launch a new campaign to broaden the standards set by the Family Leave Act of 1993 so that parents would gain access to paid leave to deal with pregnancy, childbirth, and illnesses of family members. Most proposals for paid sick leave and expanded family leave involve an insurance system, and as interest in this approach has grown, proposals have begun calling for an expansion of social insurance not tied to employment, so that people engaging in work through contracts or platforms could be covered. Some proposals involve mandatory contributions by the companies that set people to work; this would reduce the incentive to contract with workers rather than employ them. Other proposals would rely on worker contributions.


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