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Temp Worker Nation: If You Do Get Hired, It Might Not Be for Long

Writers and warehouse workers, janitors and business consultants, truck drivers and graphic designers -- none have a social safety net.
 
 
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Almost one-third of American workers now do some kind of freelance work, and they lack almost every kind of economic security that permanent full-time workers traditionally have had. Though exact figures are impossible to find, many experts and labor organizers estimate that about 30 percent of U.S. workers are “contingent.” That means they don’t have a permanent job. They work as freelancers, temporary workers, on contract, or on call, or their employers define them (often illegally) as “independent contractors.”

Their ranks include writers and warehouse workers, janitors and business consultants, truck drivers and graphic designers—and their number is rising. Richard Greenwald, a sociologist of work and professor at St. Joseph’s College in Brooklyn, estimates that their share of the U.S. workforce has increased by close to half in the last 10 years. In July, Staffing Industry Analysts reported that the average share of contingent workers at companies it surveyed had gone up by one-third since 2009, to 16 percent. Last year, a different survey found that contingent workers averaged 22 percent of the workers at 200 large companies.

These workers are often called the “precariat,” a combination of “precarious” and “proletariat,” because the traditional social safety nets for workers don’t cover them. They have no job security as they hustle from one gig to the next, and they often don’t know where their next job is coming from or when it will come. They very rarely get paid sick days or vacation. They don’t get paid extra for working overtime. They are usually not eligible for unemployment benefits. They generally have to pay both the worker’s and the employer’s share of Social Security taxes. They have to pay for their own health insurance, and Obamacare won’t change that. (Beginning in 2014, people will be able to buy private insurance at group rates, and lower-income and working-class people will get some subsidies to help them pay for it.)

They have few options if an employer cheats them out of their pay. If they are independent contractors, they do not have the right to form a labor union.

“Instability is going to be with us,” says Sara Horowitz, head of the New York-based Freelancers Union. “The truth is that we’re in a period of decline for workers.”

The New Way We Work

Who are freelancers and contingent workers? The federal Bureau of Labor Statistics has not done an official study since 2005, when it estimated that they were 10 to 15 percent of the U.S. workforce. If their income is reported on a 1099 tax form instead of on a W-2 form with deductions, its monthly payroll surveys won’t count them as having jobs. Its household surveys will count them as employed, but don’t ask about their job arrangements.

Catherine Ruckelshaus, legal codirector of the National Employment Law Project in New York, counts “everyone who’s not a W-2 employee,” including people paid on 1099s, franchisees, and people paid in cash, such as construction day laborers, as a contingent worker. Richard Greenwald arrived at his estimates by counting sole-proprietorship businesses and people who listed more income on 1099s than on W-2s.

The number has risen significantly in the last 15 years, Greenwald says, and the pace has increased since the recession began, with many new jobs “permatemps.” This trend affects workers at all income levels, but the fastest-growing sector is college graduates in “creative” fields. In the last few years, book publishers and advertising agencies have outsourced their graphic designers, hiring them back as freelancers with no benefits. Many publishers now hire editors on a per-manuscript basis.