Labor advocates point out that the new on-demand jobs have no guaranteed wages, and hold them in stark contrast to the steady jobs of the 1950s and 1960s manufacturing economy that we now look back to as a golden age of the middle class. Yet if we are going to get the future right, we have to start with an accurate picture of the present, and understand why those jobs are growing increasingly rare. Outsourcing is the new corporate norm. That goes way beyond offshoring to low-wage countries. Even for service jobs within the United States, companies use “outsourcing” to pay workers less and provide fewer benefits. Think your hotel housekeeper works for Hyatt or Westin? Chances are good they work for Hospitality Staffing Solutions. Think those Amazon warehouse workers who pack your holiday gifts work for Amazon? Think again. It’s likely Integrity Staffing Solutions. This allows companies to pay rich benefits and wages to a core of highly valued workers, while treating others as disposable components. Perhaps most perniciously, many of the low-wage jobs on offer today not only fail to pay a living wage, but they provide only part-time work.

Which of these scenarios sounds more labor friendly?

Our workers are employees. We used to hire them for eight-hour shifts. But we are now much smarter and are able to lower our labor costs by keeping a large pool of part-time workers, predicting peak demand, and scheduling workers in short shifts. Because demand fluctuates, we keep workers on call, and only pay them if they are actually needed. What’s more, our smart scheduling software makes it possible to make sure that no worker gets more than 29 hours, to avoid triggering the need for expensive full-time benefits.

or

Our workers are independent contractors. We provide them tools to understand when and where there is demand for their services, and when there aren’t enough of them to meet demand, we charge customers more, increasing worker earnings until supply and demand are in balance. We don’t pay them a salary, or by the hour. We take a cut of the money they earn. They can work as much or as little as they want until they meet their income goals. They are competing with other workers, but we do as much as possible to maximize the size of the market for their services.