From The Atlantic:
In early June, California labor regulators ruled that a driver for Uber, the app-based car service, was, in fact, an employee, not an independent contractor, and deserved back pay. The decision made national news, with experts predicting a coming flood of lawsuits. Two weeks later, FedEx agreed to a $288 million settlement after a federal appeals court ruled that the company had shortchanged 2,300 California delivery drivers on pay and benefits by improperly labeling them as independent contractors. The next month, the company lost another case in a federal appeals court over misclassifying 500 delivery drivers in Kansas. Meanwhile, since January, trucking firms operating out of the ports of Los Angeles and Long Beach have lost two major court battles with drivers who claim that they, too, have been robbed of wages by being misclassified as independent contractors.
If you think you notice a pattern here, you’re right. After years of inertia, courts and regulators are starting to take on companies that categorize employees as contractors in order to avoid wage and benefit costs. With inequality and the declining middle class becoming major issues in the 2016 presidential race, politicians (at least on the Democratic side) are now also vowing to do something about the plight of contingent workers. “I’ll crack down on bosses who exploit employees by misclassifying them as contractors or even steal their wages,” Hillary Clinton said in her big economic-policy speech in July.
The ranks of this “contingent workforce”—defined as temporary and part-time workers and independent contractors—have been growing for decades. From 2006 to 2010, their numbers swelled from 35.3 percent of the employed to 40.4 percent, according to data from the U.S. Government Accountability Office. This trend isn’t altogether bad. Plenty of part-timers, freelancers, and contractors prefer the freedom that comes from itinerant and independent work. And such work is often the result of innovations that lower barriers to entry in otherwise closed markets—the way Uber’s app, for instance, allows amateurs with cars to compete with licensed taxi drivers and owners.
The problem is that such arrangements can lead to exploitation: In their winning lawsuit, for example, the California FedEx drivers complained that the company shifted hundreds of millions of dollars in costs onto them, from buying and maintaining their FedEx-branded trucks to following FedEx schedules that didn’t allow for meal breaks and overtime. Not surprisingly, contingent workers in general report lower job satisfaction, lower pay per hour, and fewer fringe benefits than workers in the same industries with more traditional employment, according to the GAO.
Thirty-one percent of part-time faculty are living near or below the federal poverty line.
Less-skilled workers—truck drivers, hotel maids, office temps—typically bear the brunt of these contingent arrangements, but the practice is also moving into the professional classes. Thanks to a glut of law-school grads and a slumping legal business, the number of attorneys working part-time has grown from 2.4 percent in 1994 to 6.1 percent in 2013. Other educated professions, from architecture to mainstream journalism, have seen similar shifts.
Nowhere has the up-classing of contingency work gone farther, ironically, than in one of the most educated and (back in the day) secure sectors of the workforce: college teachers. In 1969, almost 80 percent of college faculty members were tenure or tenure track. Today, the numbers have essentially flipped, with two-thirds of faculty now non-tenure and half of those working only part-time, often with several different teaching jobs.
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Why this should be so is not immediately obvious. Unlike the legal and the traditional news industries, higher education has been booming in recent years. Nor does higher ed seem to follow the pattern of other industries being transformed by contingent employment. In his bookThe Fissured Workplace, David Weil of the Boston University School of Management (and currently the administrator of the U.S. Wage and Hour Division in the U.S. Department of Labor) writes that the growth of contingent employment is being driven mostly by firms focusing on their core businesses and outsourcing the rest of the work to contractors. But teaching students is—or at least is supposed to be—the core mission of higher education. That colleges and universities have turned more and more of their frontline employees into part-time contractors suggests how far they have drifted from what they say they are all about (teaching students) to what they are increasingly all about (conducting research, running sports franchises, or, among for-profits, delivering shareholder value).
To be sure, the old tenure system has its problems, and the rise of the contingent professoriate has its advantages—chief among them allowing fresh teaching talent into the higher education system, often people with more real-world experience than the regular faculty. The problem is that universities are using their power in ways that shortchange both contingent teachers and, ultimately, students. With courts and politicians increasingly questioning the fairness and legality of contingent work in industries like transportation, institutions of higher learning could soon be facing scrutiny, too.