A the 2019 California Self-Insurer Association Annual Conference, John Howard MD, Director for National Institute for Occupational Health and Safety (NIOSH), talked about the evolving labor market in the United States.
The first industrial revolution used water and steam power to mechanize production. The second industrial revolution used electric power to create mass production. The third industrial revolution used electronics to automate production. Now the fourth industrial revolution uses artificial intelligence to replace many workers.
People like to talk about “standard” vs “non standard” work when referencing the workforce today. The reality is what we consider the “standard” workforce is actually a small part of the historical work arrangements. The “standard” workforce involves companies who hire workers and provide them with both wages and benefits. This model really didn’t arise until the early 1900s and it continued through the 1980s when things started to change.
In the 1980s you started to see a rise in temporary staffing agencies replacing standard work arrangements. You also started to see automation replacing workers. You also saw an increase in the use of subcontractors by companies. For example, a resort may contract out their restaurant services to another company.
Today there are essentially three work arrangements:
- Employment relationship. This is considered the standard arrangement. One employer, one employee. This also includes co-employment where an agency places workers with the client.
- Business relationship. This is considered an independent contractor. The organization lacks direct control over how the job is done. The business relationship specifies what and when the job is done, but not how.
- Gig or platform work. The platform links the worker to the customer. Is the worker a contractor or an employee of the platform? This has been the subject of widespread debate and litigation around the nation.
Nonstandard work arrangements are largely defined by what it is not:
- No expectations of ongoing work.
- Work not necessarily performed at employers workplace.
- Work not necessarily the same business as the employer, but it could be.
- No control by the employer over how the job is completed.
The positives of the gig economy include:
- Creates surplus value in the economy providing more opportunities to work.
- Faster matching customer demand and worker supply.
- Platform removes transaction hassles.
- Lower costs than associated with a permanent workforce.
The negatives of the gig economy include:
- Post-industrial corporation that maximizes profit not through productive enterprise.
- Regulatory entrepreneurship that includes taking advantage of gaps in existing labor laws.
- Core of gig business model is evasion of employment law.
- This leads to the worker not having wage/hour, workers’ compensation and other protections of traditional workers.
There have been studies that show temporary (non-standard) jobs have higher injury rates than standard employment. Reasons for this include:
- Temporary jobs can be more hazardous.
- Limited availability of personal protective equipment.
- Less likely to report unsafe conditions because of risks of being fired.
- Confusion over who is responsible for worker safety.
Research around the number of employees engaged in non-standard work is very challenging because there is no common definition of these workers. A May 2017 Study from BLS showed that the number of workers engaged in non-standard work actually dropped during the preceding ten years. This got significant pushback from people who felt this report completely understated the number. BLS revised their study in 2018 and it produced similar results. Attempts to measure the number of people participating in this alternative workforce continue to be studied but the reality is the number is unknown and probably will not be known because of the large number of variables.