Sweated in the Sub-contracting System

Sub-contracting was first used in the U.S. in the garment industry in the late 19th century when competing manufacturers used sub-contractors—factories, to “sweat” as much labor and profit from their workers as possible. The term “sweatshop” was first used to describe tenement workshops where garment workers toiled for long hours and low wages for a subcontractor. Nowadays, sweatshops are proliferating, with all types of workers facing poor working conditions.

The sub-contracting system has grown exponentially since the early days of the garment sweatshops. Now it is also used in industries like construction, defense, law, education, media, publishing, service, and information technology. It has even spread to the public sector. Cities like Maywood, California have recently sub-contracted all of their municipal services.[1] And, Santa Clarita, CA sub-contracted its libraries in an overt effort to get rid of its unionized workers.[2]

Temporary worker agencies, outsourcing, and the misclassifying of employees as independent contractors are all forms of “sweating” a profit out of workers using labor intermediaries. Sub-contracting workers allows large corporations to avoid responsibility for the working conditions of their employees.

The subcontracting system is especially hard on women, who often bear the majority of child-rearing and family responsibilities.  Looking for jobs with more flexible work hours, they find temporary and part-time contract employment allows them to work and take care of their children.  However, taking these jobs means being paid low wages with no health care, benefits, or job security.  Ironically, these women are doing the most important work of all: raising the next generation of future workers.

  • Roughly 1 in 4 American workers are considered contingent workers: they are either part-time, temporary workers or sub-contracted workers
  • The temp industry in the U.S. grew from 400,000 workers in 1982 to 3 million in 1999.

Businesses argue that these flexible labor arrangements are necessary to remain competitive and flexible. However, only businesses benefit from them. In good economic times, businesses reap greater profits that they do not share with their workers. In bad economic times, businesses lay off thousands of workers, reaping greater profits when they demand more work from their remaining employees. To fight these sweatshop conditions, we need to eliminate the subcontracting system–by making those at the top who benefit the most from our labor responsible for our working conditions.

President Obama’s health care bill will encourage even more businesses to use subcontracting as a way to avoid having to pay for health insurance.  The President’s plan will only leverage fines for failure to provide health insurance on businesses with 50 or more employees.  More of us stand to lose our health coverage and other benefits with Obama’s plan.