A recent report from the Government Accountability Office highlights growing concerns about the economic stability of gig economy workers, many of whom now rely on public assistance programs such as food stamps and Medicaid. Companies like Uber, Lyft, and DoorDash have become significant employers of recipients of these safety-net benefits in several states, underscoring a broader structural shift in employment practices across the U.S. labor market.

This trend goes beyond the impact of emerging technologies like artificial intelligence and instead reflects a deliberate transformation in how employers classify and manage their workforce. According to research by Paul Osterman, professor emeritus at the MIT Sloan School of Management, approximately 35% of U.S. workers—nearly 57 million people—are now considered "disposable by design." This group extends beyond traditional gig workers to include contractors, freelancers, and marginal workers who often lack clear career progression or substantial workplace protections. Examples encompass a wide range of roles from adjunct professors and staff attorneys to low-wage service and part-time jobs characterized by high turnover.

Employers employ these arrangements primarily for financial reasons, reducing costs related to training, benefits, and legal obligations such as anti-discrimination measures. Disposable labor also enables companies to rapidly adjust workforce size and sidestep the fairness and stability norms associated with long-term employment. This strategy is partly driven by a managerial belief, supported by a controversial 2023 McKinsey report, that a small fraction—around 5%—of employees generate the majority of a company's value, rendering most workers replaceable.

The consequences of this shift are significant for workers and the public alike. Disposable workers generally earn less, report lower job satisfaction, and exhibit less organizational commitment compared to traditional employees. Research also links the outsourcing of critical roles, such as hospital cleaning staff, to higher infection and industrial accident rates.

Despite evidence that stable, committed workforces tend to deliver higher productivity and innovation, many companies prioritize cost-cutting and flexibility over investing in full employee status. Retail giants like Walmart and Amazon have implemented delivery systems staffed by independent contractors rather than employees, a model expected to expand further with the adoption of AI technologies.

Addressing these challenges will require concerted policy intervention and collective action. Advocates argue for clearer, more consistent legal definitions of employee status to provide protections and benefits to more workers. Current federal laws, including the Fair Labor Standards Act and National Labor Relations Act, offer inconsistent and sometimes contradictory standards, which vary with political changes and judicial interpretation. The federal adoption of the “ABC test”—used by over 30 states—could provide a clearer framework by presuming workers are employees unless employers prove otherwise.

Stronger enforcement mechanisms are also crucial, as companies currently face low risks of penalties when underpaying or misclassifying workers. Public pressure and organized campaigns have already produced some changes, such as wage increases driven by the Fight for $15 movement, employment standards pushed for contractors at companies like Google, and New York City legislation requiring direct employment for delivery workers.

Experts emphasize that while technological advances like AI capture much attention, the ongoing expansion of disposable work arrangements poses a critical, often overlooked threat to the quality of American employment. Without sustained public and political focus, disposability risks becoming the dominant employment model, with broad social and economic consequences.