Just How Precarious Is the US Economy?

Work in the twenty-first century sucks. But it’s not because of a new “gig economy” — it’s because work under capitalism always sucks.

An Uber car waits for a client in Manhattan on June 14, 2017 in New York City. Spencer Platt / Getty

There is an acute disconnect between the health of the economy and the lives of average workers these days. Unemployment in the United States is low, below 4 percent — the lowest it’s been in nearly two decades. But wages continue to stagnate as the “recovery” from the 2008 crash goes almost entirely to the wealthy. And if miserable economic conditions weren’t enough, people’s work lives often feel unstable.

No discussion of the state of the working class these days feels complete without the ubiquitous term “precarious.” But the extent to which precarity has spread throughout the American economy has been overblown.

One widely cited 2016 study from economists Lawrence Katz and the late Alan Krueger put the total number of workers toiling in “alternative work arrangements” at somewhere between 15.8 and 17.2 percent. More striking, however, was their finding that 94 percent of job growth came in those alternative arrangements. Precarious work isn’t yet dominant in the US workforce, Katz and Krueger found, but was basically the only piece of the labor market that was growing — with more precarious jobs surely to come.

But numbers aside, precarious work feels widespread. Uber and Lyft have changed the way we hail taxis. Spending a few nights at someone’s home through Airbnb, instead of a hotel, and arranging home repairs through TaskRabbit instead of a yellow pages handyman is the new normal for many. When these companies have reshaped the daily lives of so many of us, it makes sense to assume that the whole economy has shifted towards unstable work.

Yet recent analyses argue that proclamations of a newly unstable gig economy are overstated. Doug Henwood argued last year that the 94 percent figure Katz and Krueger cited was based on a small, unrepresentative sample of workers; Henwood examined new data from the Bureau of Labor Statistics and found that the percentage of workers in contingent and “alternative arrangements” was actually lower in 2017 than 2005 and 1995.

The data may not include every American worker with a “side hustle,” Henwood allows, but a side hustle and a gig-to-gig existence are far from the same thing. “Precarity isn’t the major problem in the American labor market. It’s that wages are stagnant or worse, benefits are eroding, and much labor is dull, alienating, pointless, and sometimes dangerous.”

The BLS numbers “poured a bucket of cold water” on the notion that contract work was up, as the reported share of independent contractors actually dropped from 10.7 percent in 2005 to 10.1 percent in 2017. As Annette Bernhardt of the University of California Berkeley Labor Center noted, the numbers showed that temps made up only 0.9 percent of the workforce. And Katz and Krueger themselves, in an updated paper last year revisiting their previous research, found essentially no change overall in the overall number of alternative work arrangements in recent years.

Labor scholar Kim Moody summarized the picture: “What we have is not so much a ‘gig economy’ as a capitalist economy with its violent ups and downs and continuous dislocations in which both employment and income are never totally secure.”

Getting these numbers right affects how we should approach a book like Louis Hyman’s Temp: How American Work, American Business, and the American Dream Became Temporary. If precarity is as widespread as Katz and Krueger argued in 2016 (whose study Hyman frequently cited around the time his book came out) and much mainstream reporting suggest, his history of temp work in America and the policy prescriptions he proposes are of the utmost importance for fixing what ails the American worker today.

But if precarity is merely a crucial but typical part of life under capitalism, no more or less prevalent now than any other time in our recent past, then there’s no reason why the history of temp work — however worthy of exploration in its own right — ought to upend our entire understanding of work, what’s wrong with it, and what’s needed to fix it.

Stability Doesn’t Exist

As might be guessed from his subtitle, Hyman’s argument leans more towards the former conclusion. For him, the postwar economy that provided stable jobs never really existed — and, to the extent that it did, it’s now dead and won’t be revived.

Even if most American workers do maintain stable employment, Hyman argues, “you don’t need to replace everybody to make the rest insecure.” “Temps define the limits of what is possible in labor, casting a long shadow over the rest of the workforce.”

The typical narrative about the rise of precarious work goes something like this: After the New Deal and World War II, a booming economy, strong labor movement, and corporate commitment to strong, stable profit-making in large firms produced a golden age for the American working class. Then in the 1970s, an oil crisis and stagflation sent the economy south. Desperate to solve its profitability crisis, American capital ditched its truce with unions, opting to throttle them instead.

By the 1980s, a combination of technological change, globalization, and bareknuckle class warfare against workers egged on by Ronald Reagan led to the dismantling of much of the landscape of work as we knew it. The postwar compact between unions and capital was dead — and with it went stable, steady, well-paid work.

As those industrial jobs either went offshore or were replaced by robots, and the service sector grew massively, blue-collar workers’ entire world was upended; the same would soon be true even for college-educated, white-collar professionals, who fell victim to layoffs and “downsizing” throughout the 1990s and beyond. By the time app-based gig companies like Lyft and TaskRabbit emerged, it was too late for stable work to be saved — the forward march of technological progress was inexorable.

That narrative, according to Hyman, is incomplete in some places, wrong in others.

Work was indeed more stable during the initial postwar period — but only for white, male industrial workers, as the industries dominated by workers of color and women workers like farm and domestic work were largely left out of the labor protections of the New Deal. (While this is true, Hyman leaves out the full story, which is a bit more complicated, as historians like Harvard Sitkoff and Nelson Lichtenstein have pointed out: though these groups were excluded, New Deal-era unions did provide a framework for organizing that eventually helped put those groups on the path to fuller industrial and, in the case of African Americans, political citizenship). The work lives of people of color and many women were a harbinger of the unstable work lives that all workers would soon experience.

That process didn’t begin in the 1970s or under Reagan, however. Temp recounts how corporations began undermining steady work from the moment it emerged, at the height of postwar stable employment. Thus it can be read alongside books like Kim Phillips-Fein’s Invisible Hands: The Businessmen’s Crusade Against the New Deal, which recounts how the effort to dismantle the New Deal began almost as soon as it appeared. Temp dispels the myth that business ever took a break from undermining what meager protections workers had eked out.

Shifting Risk Onto Workers

Two companies in particular played key roles in the history of temp work. Manpower, one of the country’s largest temp agencies, was the pioneer in spreading the temp model first among pink-collar, then blue-collar, then white-collar workers. McKinsey, the storied business consultancy (where Hyman himself previously worked), spread the gospel of flexible, “lean” work to executives and managers from the postwar era to today.

Manpower’s origins lie in managerial incompetence. Elmer Winter, a Milwaukee attorney, needed a secretary to type a single Supreme Court brief, because he didn’t know how. He tried the city’s employment agencies for a short-term secretary assignment, but no agencies offered such assignments. Winter and his law partner decided to create a company that did.

At its birth, Hyman argues, temp work was actually framed as a way of supporting full-time work, rather than undermining it. It was also deeply gendered. Manpower encouraged the firms it first contracted with to reassure their permanent workers that the almost entirely female temp workforce was merely shoring up the permanent positions by filling necessary gaps, picking up a week here or a day there so that a full-time secretary could go on vacation or take a sick day.

In 1961, Simon and Schuster published Winter’s book A Woman’s Guide to Earning a Good Living. “Unlike the necessity of her husband’s work, a wife’s work provided the extras,” Hyman characterizes his argument. “Her work was a luxury, her income supplemental.”

But Hyman suggests this may not have been the full story. According to Manpower’s own internal surveys, the difference between the incomes of female temps and those of their permanently employed husbands wasn’t that large, suggesting that “the work was not as discretionary as the women might have liked to say it was.” White male industrial workers, the supposed kings of the postwar working-class order, weren’t well-paid enough to avoid having their wives put in time temping.

In the early sixties, before the takeoff of feminism’s second wave, Manpower had to figure out how to encourage women to join the workforce without upsetting patriarchal relations. “Justifying women’s work without undermining male authority was Winter’s true genius,” Hyman writes. In a promotional pamphlet for Manpower aimed at recruiting women temps, the company offered strategies for wives seeking to reassure husbands that their breadwinner status was firmly intact despite the wife’s going off to work.

In his attempts to secure low-wage female labor, Winter even made nods in the direction of feminist Betty Friedan — with a boss’s twist: “Work was the best cure for ‘housewifitis.’” Winter’s answer to the “problem that has no name” was for women to work low-wage jobs with little possibility for advancement or stability.

Yet despite Manpower’s introduction of precarious temp work, the era still represented the height of steady work and stable corporate practice. This was reflected in John Kenneth Galbraith’s 1967 book The New Industrial State, in which the economist articulated the postwar corporate ideal of large, vertically integrated firms engaged in slow, steady, boring profit-making.

Their focus was on “minimizing risk,” not maximizing profits. But at the very moment Galbraith was articulating this ideal, executives at Manpower and McKinsey were designing and implementing a corporate model that eschewed stable progress for immediate profits.

Central to that shift would be the emphasis on what Hyman calls “leanness instead of stability,” beginning in the 1970s and taking off through the 1980s and beyond. Long-term, well-compensated work was a barrier to getting there. “Safe workers were unproductive workers,” Hyman writes.

If nothing else, lean companies were intent on wringing massive gains in productivity out of their workers — and temps, whether used as threats, test variables whose workday achievements would be compared against those of permanent workers, or direct replacements — would be used to wring that productivity out of the workforce.

This produced a “fundamental intellectual step” toward a “blended workforce of external and internal employees.” Temps were now permanent. And plenty of twenty-first-century companies would be happy to exploit this shift, from new “digital economy” companies like Uber to far older ones like FedEx, both of which do their best to minimize responsibility for their workers’ well-being, avoiding liabilities for benefits like pensions or health care as well as potential unionization efforts by classifying them as “independent contractors” rather than full-time workers.

Hyman’s history of attempts to dismantle steady work is wide-ranging, spanning American and global economic history since World War II and journeying everywhere from the C-suite offices of the global economy’s most powerful corporations to dirt-floored huts where immigrant workers are paid piece rates assembling electronics.

But his prescriptions leave much to be desired — especially if we have reason to doubt his claim, near the book’s conclusion, that “all the new jobs are in the flexible economy.”

Don’t Cede Another Inch

Thankfully, Hyman does not conclude with a pull-yourself-up-by-your-bootstraps call for American workers to get used to the cold, hard realities of the twenty-first-century economy. He emphasizes that the miserable state of the American worker today is the result of choices made by corporate America and politicians, not the unchangeable result of technological advance, and that we could choose an alternative. And his proposals include an overhaul of labor law that reflects the supposed reality of the flexible workforce today, as well as a portable set of benefits like health care and a universal basic income for all workers.

But where will the impetus for such benefits, especially robust ones that actually meet workers’ needs, come from? Certainly not the goodwill of corporations looking to save workers from the cruelties of the temp labor force.

You won’t see a broad front of Fortune 500 corporations fighting for a Bernie Sanders-style robust, universal, free public health system, for the same reason Manpower’s temp model didn’t produce a new worker freed from the drudgery of decades-long jobs: a lack of basic welfare-state protections like public health care is a boon for corporate power on the whole.

And, most importantly, if the economy isn’t temp-ifying at warp speed, maybe we don’t “need to stop fixating on propping up a world of security that is tied to a job,” as Hyman urges us to do in his conclusion. Foregoing the battle over who qualifies as a permanent worker rather than a temp or freelancer could easily (and unnecessarily) play into the hands of companies that should be legally compelled to treat their workers as employees rather than independent contractors. And if those employees should be considered permanent workers, they are entitled to a suite of severely weakened but still-crucial rights to collective action on the job with their coworkers, including the right to organize unions.

Hyman mentions the illegal factory occupations and other militant worker upsurges of the 1930s as the catalyst for winning New Deal labor protections. But his prescriptions fail to acknowledge that similar upsurges might be an essential part of the cure for what ails workers today. If the real problem of the twenty-first-century workforce isn’t precarity but low wages and nonexistent benefits, maybe old-fashioned, pre-sharing-economy tactics like strikes are the best way for workers themselves to cure what ails them, rather than embracing the end of stable work as we know it.