The American workplace is undergoing a structural transformation that is leaving millions of people employed but increasingly disconnected from long-term careers, according to MIT labor economist Paul Osterman. In his new book, Disposable Workers: The Transformation of Employment, Osterman argues that the most important change in modern employment is not simply the rise of freelancing or app-based gig work. It is the expansion of a much broader category of workers whose jobs are designed without meaningful prospects for advancement, security, or continued attachment to the organizations that employ them. He calls these people “marginal workers,” and his analysis suggests they represent approximately 17 percent of U.S. employees—roughly one in six workers.
Marginal workers are formally employed by an organization, but their positions are not integrated into the career structures traditionally associated with stable employment. They may receive a paycheck from a law firm, university, hospital, technology company, or other institution, yet have little expectation of promotion, rising wages, professional development, or long-term retention. Osterman describes staff attorneys who remain outside a firm’s core partnership track, adjunct instructors who teach semester after semester without a path to permanent faculty status, and part-time employees whose schedules and responsibilities fluctuate without a corresponding route toward full-time work. Their defining characteristic is not a particular occupation or income level, but the absence of an organizational commitment to their future.
Osterman’s findings come from an original survey of more than 6,000 workers, combined with analysis of employment patterns across the U.S. economy. He estimates that marginal employees account for about 17 percent of the workforce, while contract workers represent approximately 12 percent and organizational freelancers another 5 percent. Gig workers who obtain assignments through digital platforms, including ridesharing services, make up slightly more than 1 percent of the workforce. Taken together, these categories form a large “disposable” labor force, encompassing more than 55 million people when the broader U.S. workforce is considered. The groups differ in their legal status and daily working conditions, but Osterman argues that they are connected by the same economic logic: firms use them to increase flexibility and limit labor costs.
The technical distinction between these categories matters because employment status determines access to benefits, bargaining power, and legal protections. A permanent employee is generally incorporated into an organization’s internal labor market, where experience can lead to promotion, wage growth, training, and more stable responsibilities. A contract worker may perform similar tasks while being employed by a staffing agency and assigned to a client company. An organizational freelancer may work directly for a firm but remain outside its permanent payroll. Gig workers typically obtain jobs through a digital platform that matches labor supply and customer demand, often using algorithmic systems to allocate assignments, calculate compensation, monitor performance, and manage availability. These arrangements can reduce the administrative and financial obligations associated with conventional employment, but they can also transfer risks—including fluctuating demand, unpaid downtime, and limited benefits—to workers.
The growth of disposable employment reflects a long-running effort by companies to make labor expenses more variable. In a conventional employment model, a firm absorbs the costs of recruitment, training, healthcare contributions, paid leave, wage progression, and periods when demand is temporarily weak. By relying more heavily on contingent or marginal workers, a company can adjust staffing levels more rapidly and reduce the share of revenue devoted to compensation and benefits. This can improve short-term financial flexibility, particularly in industries with seasonal demand, uncertain workloads, or intense competition. However, the same model can weaken the institutional relationships that support skill development and organizational memory. Workers who do not expect to remain with an employer may have fewer incentives to invest in firm-specific knowledge, while employers may be less willing to provide costly training.
That trade-off creates a central question in labor economics: whether the immediate savings from a less secure workforce outweigh the productivity gains associated with stable employment. Research on high-commitment workplaces has often found that workers who receive training, predictable schedules, advancement opportunities, and a stronger sense of belonging can become more productive and more willing to solve problems beyond the narrow limits of their job descriptions. Stable teams may also reduce turnover costs and preserve expertise. Yet the evidence is not universally decisive, and Osterman says firms may knowingly accept lower commitment when they believe flexibility and reduced expenses are more valuable. In his view, the expansion of disposable work is not necessarily the result of managerial ignorance or bad faith. It is the outcome of repeated business decisions in which firms judge that the financial benefits of contingent labor exceed the potential costs to productivity and worker loyalty.
The consequences extend beyond individual job satisfaction. When a large portion of the workforce lacks access to career ladders, wage growth can become disconnected from experience and skill acquisition. Workers may hold jobs for years without accumulating the credentials, authority, or compensation that traditionally marked occupational advancement. Limited access to employer-sponsored health insurance and retirement plans can increase household vulnerability, while unpredictable schedules make childcare, education, and second jobs more difficult to manage. At the macroeconomic level, the shift may contribute to weaker wage growth and a greater concentration of economic risk among workers. The employment relationship still exists, but it provides less security and fewer opportunities to build a sustainable career.
Artificial intelligence could intensify this trend, Osterman argues, not only because automation may alter the tasks performed by employees, but because it may increase uncertainty about future staffing requirements. Companies adopting AI systems may not know how quickly particular occupations will change, which skills will remain valuable, or how many workers they will need during the transition. Faced with that uncertainty, firms may favor labor arrangements that are easier to expand, reduce, or reorganize. A company may use contractors to test new workflows, freelancers to perform specialized tasks, or temporary staff to cover demand while automated systems are introduced. AI could therefore strengthen the appeal of disposable labor even in situations where the technology does not directly replace human workers. The indirect effect would arise from management’s desire to preserve flexibility while the organization’s technological needs remain unsettled.
The weakening of traditional worker protections makes the issue more difficult to address. Union membership covers only about 6 percent of U.S. employees, limiting the reach of collective bargaining as a mechanism for securing wages, benefits, predictable schedules, and advancement opportunities. Osterman points to other possible sources of pressure, including advocacy campaigns that have helped raise minimum wages and consumer movements that have pushed major corporations to improve working conditions within their own operations and supply chains. Governments could also strengthen labor standards, clarify the classification of workers, expand portable benefits, and improve enforcement against misclassification. None of these measures would eliminate the economic reasons companies use contingent labor, but they could reduce the extent to which flexibility is achieved by shifting instability onto workers.
Osterman’s broader argument is that disposable employment will not become a major political or economic priority until its scale is widely recognized. The public conversation often treats gig workers, freelancers, temporary staff, and marginalized employees as separate phenomena, even though they can represent different versions of the same transformation: organizations retaining greater control over labor costs while reducing their responsibility for workers’ long-term security. The result is an employment system in which millions of people are working but remain outside the pathways that once connected employment to advancement. Osterman does not propose a single solution, emphasizing instead a combination of unions, public policy, advocacy, customer pressure, and organizational reform. His central warning is that without sustained attention, the disposable workforce may continue expanding—not because stable employment has disappeared, but because fewer jobs are being designed to lead anywhere.
Subject of Research: The expansion of marginal, contract, freelance, and gig employment in the United States and its effects on job security, career advancement, labor costs, and worker protections.
Article Title: Disposable Workers: The Transformation of Employment
Web References: Harvard University Press book page
References: Paul Osterman, Disposable Workers: The Transformation of Employment; original survey of more than 6,000 U.S. workers; research and commentary cited from David Weil of Brandeis University.
Keywords
Marginal workers, disposable workers, gig economy, freelance work, contract employment, labor economics, employment security, career advancement, artificial intelligence, workforce transformation, unions, worker protections, labor market, job quality, contingent work
