The Contracting Economy is Harming America


Silicon Valley is hailed by many as the heart of the nation’s 21st century economy. But it is fueling an underclass of tens of thousands of workers who aren’t considered full-fledged employees and must struggle to make ends meet, according to a new report.

The document, “Tech’s Invisible Workforce,” authored by two researchers at the University of California at Santa Cruz, notes that over the past 24 years, the number of Silicon Valley jobs in subcontracting industries has grown three times as fast as overall Silicon Valley employment. Blue-collar contract industry workers make only $19,900 a year and 58 percent of them are African-American or Latino. Meanwhile, the average direct tech employee makes $113,000 a year.

“The overwhelming majority of Black and Latino workers in the tech sector start out in blue-collar jobs,” the report states. “By subcontracting out nearly all of their blue-collar work, tech companies have ended up with not just a glass ceiling, but a concrete wall between lower-wage and higher-wage jobs.”

The Teamsters have been at the forefront of fighting for such workers. Shuttle bus drivers for Facebook, Apple, eBay, Yahoo, Evernote, Genentech, Zynga and Amtrak joined with Local 853 to earn significant wage and benefit increases. But the problem is deeper than just what’s going on in the Bay area.

In fact, contract and temporary workers fueled all U.S. job growth in the last decade. There was a 9.4 million increase in the amount of people working under such arrangements between 2005 and 2015. That’s more than the rise in overall employment during that time.

And it’s a problem, since these workers are left to shoulder not only all their health and retirement needs, but have no backstop if they suddenly lose their jobs.  Instead of employers pitching in to help cover such benefits, everyday Americans are left to pick up the cost.

That’s not a model of success for this country. It is, however, the perfect system to drive up corporate profits at the expense of hard-working people nationwide.