Treaty of Detroit? I'm not familiar.

It's an expression... representing the bargain that Walter Ruther, United Automobile Workers, made with the three automobile companies, precisely about lifetime employment, recalls after layoffs, wages going up with the cost of living, wages going up with profits.

Now, that was the deal.

That was the kind of situation in the American labor market, with exceptions, obviously.

Agricultural workers were excluded.

African-Americans often got a much worse deal.

But it was a central tendency in the labor market up until the 1970s.

So what are some of your favorite policy levers for this?

But Paul, let me now hand it over to you.

you.Uh, thank you, Maureen, for that lovely introduction.

Let me, let me just say that for many, many years, decades, uh, I've admired Maureen and her work, and the Economic Opportunities Program [coughs] is really kind of a beacon of thinking around job quality.

It's, it's by far the best in the country on that topic, so I'm very happy to be here.

Let, let me begin.

I'm gonna talk for about 15-ish minutes, and I'm gonna talk fast.

Um, let me begin with a paragraph the way the book opens.

We do have a question about the role of AI and the role of AI in eliminating lower tier jobs in particular, and how does that sort of interact with all of this?

Do you think that these companies should bear some type of responsibility for some of these workers that are potentially going to be outsourced because of AI?

Yeah, so you're asking, should there be a social contract? Should there be some understanding that we're all in it together? You can make a theoretical argument that the answer is yes, and that is that people have invested their human capital in firms.

They've learned firm-specific skills about their organization.

They've learned how to do their job.

They've made an investment.

And just like firms want to get a return on their investment for machinery, people are entitled to that investment.

If you take away their job, you're taking away the returns to that investment, and we owe them something.

And finally, what you mentioned kind of at the top of today's show when you were mentioning, you know, somebody like an accountant who's probably most at risk of being fully replaced by AI, for those people, what can they possibly do to not be labeled as one of the AI losers?

Based on your definition, what kinds of workers fall under that umbrella?

Sure.

So the general definition is that a disposable worker is someone who, when they're hired, the employer has no interest in keeping them.

We're all employees at will.

We can be fired normally.

But usually, for most people, for standard workers, when they're hired, the employer intends to keep them around.

Disposable workers, that's just not true.

But how is AI perhaps accelerating this shift?

And later, New York Times reporter Noam Scheiber will offer another angle on the changing workforce with ideas from his new book, Mutiny, the Rise and Revolt of the College-Educated Working Class, what it means to be disposable in today's economy right after this quick break.

My name is Paul Osterman.

I'm a labor economist at MIT, and I'm talking about my new book, Disposable Workers and the Transformation of Employment.

The first big point is simple.

Firms do not want employees.

In a sense, this is a book about divorce, the efforts of many employers to get out from under the obligations to their workforce.

They want the bodies to do the work, but they don't want them to be employees.

head of the bank attributed but didn't prove

So tell us what you mean by that.

Well, so let me give you just a few examples to kind of make this more concrete.

Think first about the people who clean your office building at night.

Those folks are building cleaners who are almost always working for a staffing company, a contracting company.

They don't work for the building.

So from the building's point of view, these people are disposable.

They can stop the contract and get a new set of cleaners, and so they can drive down wages by forcing contracting companies to compete against each other.

Right.

It's the most up to date that basically it finds that premium for large firms has largely disappeared.

That's right.

And so that gets us into a conversation about why this is happening, why firms want this divorce.

And so I tell kind of four stories about why they want the divorce.

One story, which is a benign story, is every organization has ups and downs.

And they need to be able to adjust their labor force.

If no one wants to buy 1,000 widgets, you don't want to have 1,000 widget makers.

So what sort of things do you think are on the table for trying to address

So what did you begin to see that convinced you this was becoming a defining feature of modern employment?

Sure.

Let me first advertise a little.

The book is Disposable Workers, the Transformation of Employment, and it's coming out in August from Harvard University Press.

Well, let me give you a couple of examples of occupations that I'm talking about.

They're along a continuum.

So on the one hand, you do have gig drivers, Uber drivers, food delivery drivers, jobs like that.

So what motivated that? What's the conclusion from

Can you tell us what you found or how you decided to organize the types of workers that there are and the relationships that they have to their job? This seems to me to be the guts of your book.

Yeah, I'm happy to do that.

And thank you very much for having me.

I really appreciate it.

I'm looking forward to the conversation.

The book begins with a line, which is that this is a book about divorce.

It's a book about firms wanting to have bodies, people to do the work, but not wanting them to be employees.

So I guess I would ask both of you, given what we see in the workforce, how can we change public policy to make things work better?

A- a- and with that, how can you... could you talk more about how this affects workers and even workers' relationship to the workplace, and even how it affects workers in their sort of, um, you know, uh, relationship between the workplace and family life? Um, and, and what does that have to say about the, the ev- the evolution or the disintegration of the w- the social contract, um, as there's this rise in free market, um, ideology and expression?

Well, again, for the people inside the firm Who are still s-standard employees.

Uh, the social contract has been rewritten, uh, in a way to their disadvantage, right? So as I just said, their wages are set by the market and i- now as opposed to by, uh, internal procedures and norms.

That's just an example.

For people on the outside, they have no contract, social contract with the, with the firm where they do the work.

Uh, the firm...

That's the whole point from the firm's point of view, is it doesn't have responsibility for these folks.

How does that reflect how it's become a new norm in our society when there was such a, uh, so- such promises at the, y- the post-World War II era, uh, to where we come to a situation where there's income instability, the erosion of benefits, and contingency becomes a, a regular reality, what you talked about? A- a- and what about the psychological effects of job anxiety? And again, how does that affect this whole question of work-life, the myth of work-life family balance, not just even that, but even this notion of meritocracy?

A- a- and with that, how can you-- could you talk more about how this affects workers and even workers' relationship to the workplace, and even how it affects workers in their sort of, um, you know, uh, relationship between the workplace and family life? Um- And, and what does that have to say about the, the ev- the evolution or the disintegration of the w- the social contract, um, as there's this rise in free market, um, ideology and expression?

Well, again, for the people inside the firm who are still s- standard employees, uh, the social contract has been rewritten, uh, in a way to their disadvantage, right? So as I just said, their wages are set by the market and i- now as opposed to by, uh, internal procedures and norms.

That's just an example.

For people on the outside, they have no contract, social contract with the, with the firm where they do the work.

Uh, the firm, that's the whole point from the firm's point of view is it doesn't have responsibility for these folks.

Uh, at some point we should talk about, uh, who these people are and what are the different versions of disposable work.

Uh, you ask about what are the consequences for people, so I, I should s- step back and, and describe the kind of the empirical basis of the book.

A- and, and what about psychological effects of job anxiety? And again, how does that affect this whole question of work-life, the myth of work-life family balance, not just even that, but even this notion of meritocracy?

And what about psychological effects of job anxiety? And again, how does that affect this whole question of work-life, the myth of work-life family balance? Not just even that, but even this notion of meritocracy.

Right.

So just on work-life balance, the nature of some of these jobs, particularly part-time work, low-wage service work, and contracting work, is it's very difficult to predict your hours.

And if you can't predict your hours, if hours are unstable and unpredictable, that's very disruptive for workplace work-life balance.

And so that is another negative outcome of this development.

If you think about why this is happening, when I say this, there's kind of two things going on here.

One is the general erosion of the post-war system.

What happens if you center workers and workers' perspectives and agendas? And how does your research speak to what that would look like to be able to address and speak to and meet some of these shifts and changes and transformations that have happened over time?

A- a- and with that, how can, could you talk more about how this affects workers and even workers' relationship to the workplace, and even how it affects workers in their sort of, um, you know, uh, relationship between the workplace and family life? Um, and, and what does that have to say about the, the ev- the evolution or the disintegration of the w- the social contract, um, as there's this rise in free market, um, ideology and expression?

Well, again, for the people inside the firm who are still s- standard employees, uh, the social contract has been rewritten, uh, in a way to their disadvantage, right? So as I just said, their wages are set by the market and i- now as opposed to by, uh, internal procedures and norms.

That's just an example.

For people on the outside, they have no contract, social contract with the, with the firm where they do the work.

Uh, the firm-- That's the whole point from the firm's point of view, is it doesn't have responsibility for these folks.

Uh, at some point, we should talk about, uh, who these people are and what are the different versions of disposable work.

Uh, you ask about what are the consequences for people.

How does that reflect how it's become a new norm in our society when there was such a, uh, such, such promises at the, the, the post-World War II era, uh, to where we come to a situation where there's income instability, the erosion of benefits, and contingency becomes a, a regular reality, what you talked about? And, and, and what about psychological effects of job anxiety? And again, how does that affect this whole question of work-life, the myth of work-life family balance, not just even that, but even this notion of meritocracy?

And what about psychological effects of job anxiety? And again, how does that affect this whole question of work life, the myth of work life, family balance, not just even that, but even this notion of meritocracy?

Right.

So just on work-life balance, the nature of some of these jobs, particularly part-time work, low-wage service work, and contracting work, is it's very difficult to predict your hours.

And if you can't predict your hours, if hours are unstable and unpredictable, that's very disruptive for workplace work-life balance.

And so that is another negative outcome of this development.

If you think about why this is happening, when I say this, there's kind of two things going on here.

One is the general erosion of the post-war system.

What happens if you center workers and workers' perspectives and agendas? And how does your research speak to what that would look like to be able to address and speak to and meet some of these shifts and changes and transformations that have happened over time?

And then if they can replace them some other way with automation, then they can simply let them go with no ongoing severance payments or insurance or any of the other obligations they would have for a full-time employee.

Yeah, I think that's right.

So in the book, I have good data, original data, on people's employment circumstances.

And my bottom line is that today about 35% of the workforce are disposable.

And they fall into one of these three categories.

Now, 35% is a big number.

A third of the workforce is disposable.

Tell me about respect to that.