A New Era for [5.11.17]

Both as an academic researcher and as President Obama’s head of the Department of Labor’s Wage and Hour Division, the agency responsible for enforcing our nation’s most basic labor standards, I have watched this story of what I call the “fissured workplace” unfold. In geology, a fissure in a once solid rock both deepens and spreads. Once an activity like janitorial services or housekeeping is shed, the secondary businesses doing that work deepen the fissures even further, often shifting those activities to still other businesses. The farther down in the fissure one goes, the slimmer the profit margins and the greater the incentives to cut corners. At my former agency, we saw this fissuring result in the failure to pay janitors, cable installers, carpenters, housekeepers, home care workers, or distribution workers the basic wages and overtime they had earned—losses typically equivalent to losing 3-4 weeks of earnings.
But fissuring not only undermines compliance with basic labor standards.  It muddies responsibility for health and safety, raising the likelihood of injury, illness, and even death at the workplace.  Even more, it unwinds the basis for social safety net policies that protect against the downside risks of the labor market such as workers compensation and unemployment insurance.  When you work as an employee for a major business, decades of research shows your wages and benefits tend to get a bounce, regardless of whether that large employer is a union shop or not.  But if you’re cut off, you’re suddenly no longer a member of the corporate family. Earnings fall significantly when a job is contracted out—even for identical kinds of work and workers.  Opportunities for “climbing the ladder” fade because the person in the mail room (or, more likely, at the IT service desk) is now a subcontractor without a pathway. That not only means lower wage growth and reduced access to benefits, but also diminished opportunities for on-the-job training, access to valuable social networks, and other pathways to upward advancement.  Taken together, the fissured workplace contributes to growing earnings inequality.
A great deal of research is being done about the growth, impacts, and extent of the fissured workplace, not only in the US but around the world.  At the same time, government agencies at all levels, worker advocates, unions, and other civil society groups, and progressive businesses are trying different ways to address these profound changes. The will attempt to pull this growing body of research, data, reporting, and experience together.  We urge you to follow us on twitter as well as use this site for updates, commentary, and links on this pressing issue.