In mid-May, The New York Times reported on appalling labor conditions in the construction of NYU’s new satellite campus in Abu Dhabi. NYU said it had a commitment from both the government of Abu Dhabi and the contractor, the BK Gulf corporation, that workers would be treated decently. But the Times found that migrant workers from South Asia were crammed fifteen to a room, paid as little as $272 a month for an eleven- or twelve-hour workday six or seven days per week, and were roughed up, fired, jailed, or deported if they complained. Embarrassed NYU officials issued pained statements of dismay, but the university’s position boiled down to “Who, me?” NYU could disclaim responsibility because the contractor, not the university, was the employer.
A year earlier, in Bangladesh, more than 1,100 garment workers were killed in a factory fire at Rana Plaza. The fashion brands for whom the clothes were ultimately made, companies like Benetton and Tommy Hilfiger, issued similar denials of responsibility. The clothes carrying their labels were produced at three or four levels of remove from corporate management. In the new economy of “supply-chain” production, a fashion company typically hires a logistics firm such as the Hong Kong–based Li & Fung, which in turn finds factories to manufacture the goods. Profit margins are thin and competition for orders is fierce. The factories often turn to subcontractors. While the brand is relentless about design specifications and quality control for the product, wages and working conditions are somebody else’s problem. After the fire, some European fashion houses took the lead in negotiating an accord that addresses safety, but not wages.
The same system of outsourced employment increasingly operates at home. In the past generation, there has been a drastic change in how work is organized. Regular payroll employment is becoming the exception. The employer of record is no longer the corporation, but a web of intermediaries. The outside contractor demands stringent worker performance, even as it drives down wages, job security, and benefits.
David Weil writes in his authoritative new book, The Fissured Workplace:
As major companies have consciously invested in building brands and devoted customers as the cornerstone of their business strategy, they have also shed their role as the direct employer of the people responsible for providing those products and services.
This system, which began in peripheral occupations such as janitors or security guards, has become pervasive. FedEx workers wear the company’s uniforms, drive its trucks, and adhere to stringent rules; but they are independent contractors, not company employees. At many leading hotels, room cleaners and desk clerks actually work for management companies, not for Marriott or Hilton. The technician sent by Comcast to fix your cable may well be a…
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