Exploring the Rise of Disposable Jobs and Their Impact on Workers

In today’s ever-evolving job market, a significant number of American workers find themselves in roles where career advancement and job security are uncertain. From the concierge at a Boston condo to the testers ensuring the addictiveness of your favorite snacks, these positions highlight a trend towards what many are calling “disposable jobs.” But why is this trend growing, and how does it impact both the workers and society?

Labor economist Paul Osterman explores this phenomenon in his book, “Disposable Workers: The Transformation of Employment.” Osterman’s research reveals that over one-third of the U.S. workforce, approximately 57 million people, are in roles where they are treated as expendable, despite working on-site for their employers.

Understanding the “Disposable Worker”

Through a survey of over 6,000 individuals and interviews with nearly 100 stakeholders, Osterman identified three distinct categories of disposable workers.

Contractors

These individuals are employed by staffing agencies but work at client sites, such as temporary office staff, building cleaners, and security personnel. While many earn low wages, some, like travel nurses, receive higher compensation. Contractors make up about 13% of the workforce according to Osterman’s survey.

Freelancers

Freelancers work for businesses or organizations without being formal employees. This group includes gig workers like Uber drivers and freelance journalists. Osterman’s study found that freelancers account for 5% of the workforce. Individual freelancers, such as dog-walkers, are not included in this category.

Marginal Workers

Employed by companies, marginal workers lack career progression opportunities and face high turnover. They constitute 17% of the workforce. These roles, though appearing standard, are structured to be temporary.

Man standing at the top of a staircase blocked by a solid wall looking toward a door located above him. — Sometimes there’s no way to progress in your job.
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Spotlight on Marginal Workers

Within the realm of marginal workers, staff attorneys and adjunct professors serve as prime examples. These individuals, although employed, are not on the career advancement track within their respective fields. Staff attorneys often handle case-specific tasks without the promise of job continuity, while adjunct professors, both part-time and full-time, face similar job insecurity without the path to tenure.

Part-Time Employment’s Hidden Costs

Part-time roles, another facet of marginal work, offer cost savings for employers. These positions not only pay hourly wages nearly 20% lower than full-time roles, but they also present a 5% gap when benefits are factored in. Employers benefit from the high turnover rates of part-timers, allowing workforce adjustments without investing in career development.

A study led by professor Susan Lambert discovered that many low-wage employers utilize part-time staffing to enhance workforce “flexibility.” One manager noted, “Temp workers: We don’t need them. Wait a day for turnover.”

A picture of a wadded up piece of paper on a book jacket that says 'Disposable Workers.' — Paul Osterman’s book, ‘Disposable Workers,’ explains how ties between employers and their employees are fraying.
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After the Affordable Care Act (ACA) went into effect, evidence surfaced that employers increased part-time roles to avoid the costs of providing health insurance. Companies in retail, hotels, and restaurants added 500,000 part-time positions after the ACA’s implementation.

Why Employers Opt for Disposable Workers

Cost-saving is a major driver for employers preferring disposable workers. Hiring freelancers and contractors allows them to bypass mandatory benefits such as Social Security contributions and health insurance costs for larger employers.

Marginal workers do receive these benefits, but high turnover reduces training investments and avoids management costs linked to layoffs or fair treatment. Furthermore, a 2023 McKinsey report suggesting 5% of employees deliver 95% of an organization’s value reflects a broader disregard for the contributions of the remaining workforce.

A woman rolls laundry bins down a hospital hallway. — Outsourcing cleaning services might seem like a good way to cut costs, but in hospitals it can undercut safety.
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The Impact on Workers and Society

Osterman’s survey indicates that disposable workers, including contractors and marginal employees, earn less and express lower job satisfaction compared to regular employees. Freelancers, however, report higher satisfaction due to their flexibility in choosing assignments.

Societal costs also arise from the disposable workforce model. For instance, research links the use of contract workers in hospitals to increased infection rates and a higher incidence of industrial accidents.