AI Fuels Growth of "Disposable Workers," MIT Professor Estimates
- tech360.tv
- 3 hours ago
- 3 min read
Paul Osterman, an emeritus professor at MIT's Sloan School of Management, estimates that 35 per cent of workers are already considered "disposable." This trend, he suggests, could intensify with the wider adoption of artificial intelligence. His book, *Disposable Workers: The Transformation of Employment*, details these findings from a national survey of over 6,000 workers, according to Forbes.
Professor Osterman argues employers are reducing their commitment to staff. He states that focusing solely on jobs eliminated by AI overlooks this ongoing shift. AI is expected to accelerate this, affecting employees lacking long term security or clear career advancement paths.
The "disposable" workforce comprises three groups: contractors, freelancers, and marginal employees. Contractors include those working via staffing firms. Freelancers cover gig workers like Uber drivers. So, marginal workers are legal employees with limited career progression, often in high turnover roles without a clear future.
Adjunct faculty and staff attorneys exemplify marginal workers, performing foundational duties without typical partnership prospects. These individuals complete essential tasks, yet receive no sustained employer commitment.
The increase in disposable workers stems from employer mindset and economic drivers. Professor Osterman references a McKinsey and Company report, *The State of Organisations 2023*, stating 95 per cent of an organisation's value comes from only 5 per cent of its employees. But this viewpoint, he suggests, implies a general undervaluing of the broader workforce.
Deloitte, a major US accounting firm, recently adjusted employee benefits. It reduced new parent leave and family building stipends for some administrative, finance, and information technology support staff, but not for other employee categories. A Forbes contributor suggested these roles, not central to Deloitte's client facing operations, are potentially more vulnerable to artificial intelligence.
These examples support Professor Osterman's assertion: AI does not cause the rise of disposable workers but will intensify it. AI introduces uncertainty for organisations regarding future staffing needs. So, this ambiguity makes the financial benefits of non permanent hiring more attractive.
The overall impact of AI on employment levels remains unclear. Professor Osterman states that whether AI creates more jobs than it eliminates is unknown. His concern focuses on the changing composition of the workforce, specifically the balance between permanent and disposable employees.
Organisations find it financially prudent to use disposable workers when staffing needs are uncertain. This avoids expenses like health insurance and other benefits. And this economic incentive promotes the use of temporary staff over permanent hires.
Entry level workers are expected to feel this shift more acutely. Professor Osterman notes organisations find it easier to avoid hiring new junior staff than to dismiss existing senior employees. Releasing senior staff incurs financial costs and affects morale.
Professor Osterman offers two pieces of advice for career security. First, acquire extensive skills; human capital is primary power. But, establishing broad external professional networks is essential, reducing reliance on a single employer, providing opportunities. For lower wage or lower skill roles, education is crucial. So, Professor Osterman highlights public policy as a solution, including job training, adequate minimum wages, and measures to improve basic labour market standards.
35 per cent of workers are currently categorised as "disposable" by Professor Paul Osterman.
Artificial intelligence is expected to intensify this existing trend, rather than being its primary cause.
"Disposable" workers include contractors, freelancers, and marginal employees lacking employer commitment.
Employer attitudes and economic considerations drive this shift, exacerbated by AI related uncertainty.
Workers are advised to build skills and external networks for career security, while public policy is suggested for lower skilled roles.
Source: Forbes
