A lot of people think the gig economy is what ails the labor market, but that isn’t quite right. Granted, there’s ample potential for corporations to abuse workers by misclassifying them as independent contractors. It’s pretty easy. You congratulate your plucky recruits for their entrepreneurship and then you pay them less than the minimum wage (and no benefits). I explained how that works in my last piece (“Republicans Are Attacking a Biden Nominee Over His Stance on the Gig Economy”). But as best anyone can tell, the proportion of the workforce that consists of independent contractors (6.9 percent) is smaller than it was in 2005 (7.4 percent). That was four years before Uber’s founding.
What more often ails the labor market is the typical corporation’s off-loading of lower-wage workers (and therefore any responsibility to treat them properly) onto another, usually smaller company. That frees both businesses to concentrate on core strengths. For the corporation, that’s producing Product X or Service X. For the subcontractor or franchisee, that’s skirting Labor Law Y or Labor Law Z.
The janitors who clean your office at night? Fifty years ago, they’d almost certainly have worked for the same company as you did. Today they almost certainly do not. Either they work for a subcontractor or they work for a franchisee for one of the big janitorial franchise outfits like CleanNet USA and Coverall.
David...
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