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Outsourcing and Business Responsibility

A new report has found that outsourcing drives down workers’ wages and leads to more labor law violations. The National Employment Law Project released a report entitled, “Who’s the Boss?” which provides an analysis of the impact of the current trend of outsourcing. It found that in some cases outsourcing is the result of explicit employer strategies to evade labor laws and worker benefits.

It’s findings include:

  • Median hourly wages for workers in janitorial, fast food, home care, and food service, all sectors characterized by extensive contracting and franchising, are $10 or less;

  • Once outsourced, workers’ wages suffer as compared to their non-contracted peers, ranging from a 7 percent dip in janitorial wages, to 30 percent in port trucking, to 40 percent in agriculture; food service workers’ wages fell by $6 an hour;

  • These same sectors see routine incidences of wage theft, with 25 percent of workers reporting minimum wage violations, and more than 70 percent of workers not paid overtime; and

  • Construction, agriculture, warehouse, fast food, and home care workers suffer increased job accidents compared with workers in other sectors.

This restructuring of employment arrangements may well foreshadow a future for work different from the employer-employee paradigm around which many of our labor standards were constructed, but should not spell the end of living wage jobs or business responsibility for work and workers.


The full report can be read at: