Alt Work Grows in US


In late March, two Ivy League economics professors, Lawrence F. Katz of Harvard and Alan B. Krueger of Princeton, released a paper on the growth of “alternative work arrangements” in the United States. What they found confirms what millions of American workers know.

According to Katz and Krueger, “The increase in the share of workers in alternative work arrangements from 10.1% in 2005 to 15.8% in 2015 implies that the number of workers employed in alternative arrangement increased by 9.4 million (66.5%), from 14.2 million in February 2005 to 23.6 million in November 2015. Thus, these figures imply that employment in traditional jobs (standard employment arrangements) slightly declined by 0.4 million (0.3%) from 126.2 million in February 2005 to 125.8 million in November 2015.”

The professors’ paper draws on a version of the Contingent Work Survey instrument of alternative or nonstandard employee-employer activity. There is more.

“Unfortunately, we cannot determine the extent to which the replacement of traditional jobs with alternative work arrangements occurred before, during or after the Great Recession. But it appears that as of late 2015, the labor market had not yet fully recovered from the huge loss of traditional jobs from the Great Recession.”

No full recovery for the labor majority, indeed. Of the four categories of non-traditional employment Katz and Kreuger map, independent contractors were the largest. They, in this category of workers, bear business costs that company employees do not.

Workers in the so-called 1099 economy do not benefit from many federal and state labor standards. By contrast, company employees do, and they can also receive employer-provided health-care insurance.

Self-employed independent contractors file a 1099 Internal Revenue Service tax form. In contrast, company employees file W2 tax forms with the IRS.

Independent contractors pay the full share of Social Security and Medicare payroll taxes. Professors Katz and Krueger’s wording differs from the IRS’ definition of independent contractors.

According to the academic duo, “Independent Contractors” are individuals who report they obtain customers on their own to provide a product or service as an independent contractor, independent consultant, or freelance worker.” But wait.

Firms such as Uber, the ride-hailing firm, use smart phone, app-based technology to control the digital platform that links drivers with riders. Uber owns this platform, and pays the drivers, who work as self-employed independent contractors, not as company employees, which cheapens their work income.

“Technological changes that lead to enhanced monitoring, standardize job tasks and make information on worker reputation more widely available may be leading to greater disintermediation of job tasks,” Katz and Krueger write. In plain English, disintermediation reduces the number of workers taking part in a labor process.

Removing the so-called middlemen in a supply chain from growing food that ends up on a supermarket shelf, for example, reduces firms’ transaction costs. Further, employer surveillance of workers is about power to control the labor process.

Katz and Krueger’s paper asserts “that all of the net employment growth in the US economy from 2005 to 2015 appears to have occurred in alternative work arrangements.” This trend reveals that a “race to the bottom” of waged jobs that decreases workers’ security is a growing trend in the US.

What the American people do about that trend is crucial. Consider, briefly, the politics of the left and right.

In the former approach, the “Fight for $15” minimum wage struggle that arose after the Occupy Wall Street movement is a progressive push to improve the lives of tens of millions of Americans who earn less than $15 an hour. That struggle will continue after the November elections.

For the latter approach, we see Donald Trump’s White House bid to “make America great again” by elevating Caucasians at the expense of ethnic and religious minority groups. This cross-class alliance between a billionaire and scores of struggling whites is regressive.

Seth Sandronsky is a journalist and member of the Pacific Media Workers Guild. Email

From The Progressive Populist, May 15, 2016

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