Tech

Most executives say they want more contract and temp workers. A majority of those workers say that’s not good enough.

  • Contract workers “overwhelmingly” want to be permanent employees, according to a new McKinsey-Ipsos survey.
  • But executives say they plan to rely more heavily on contract labor, McKinsey previously found.
  • The findings reveal a huge divide between workers’ wants and those of their bosses.
  • See more stories on Insider’s business page.

Around a quarter of Americans say they work mostly in the gig economy, and 62% of those workers say that they’d rather not, according to a survey published Wednesday by McKinsey and Ipsos.

“Gig workers would overwhelmingly prefer permanent employment,” the survey found. 

That preference is even stronger among immigrants and workers of color, who disproportionately make up the gig workforce.

Among those groups, 72% of Hispanic and Latino gig workers, 71% of Asian American gig workers, and 68% of Black gig workers said they’d rather be permanent or non-contract employees, as did 76% and 73% of first- and second-generation immigrants, respectively.

McKinsey and Ipsos surveyed 25,000 Americans over the spring of 2021, and 27% percent of those surveyed said their primary job at the time was as a contract, freelance, or temporary work.

But their resounding preference for the security, benefits, and legal protections that come with employee status could encounter some tough resistance: their bosses.

Globally, 70% of executives — mostly from large US firms — said they plan to ramp up their reliance on contract and temporary workers, according to a McKinsey study from September.

Corporate America has aggressively opposed efforts to reclassify contractors as employees, in many cases arguing that workers prefer the flexibility that gig work claim to offer. But McKinsey’s latest findings suggest that executives — often citing surveys that their own companies funded — may not be as in touch with workers’ needs and wants.

While companies like Uber, Lyft, DoorDash, Grubhub, Amazon, Facebook, and Google have played leading roles in familiarizing American consumers with the gig-based business model, they’re far from the only ones who have leveraged contractors to skirt labor laws and minimize their costs. (Insider has contacted the above companies for comment, and will update this story if they respond.)

Executives in the lodging, food service, healthcare, and social assistance sectors, are especially keen on relying more heavily on contractors, according to McKinsey.

As Insider previously reported, the COVID-19 pandemic exposed how the tech industry’s push to build their empires on the backs of contractors has failed American workers, who abruptly found themselves without healthcare, sick pay, workers’ compensation, and other benefits guaranteed to employees.

Read more: Biden could be the most pro-labor president in decades. These 81 government power players will take a major role in shaping policy during his administration.

That model also hit taxpayers hard, as they subsidized unemployment benefits for contractors laid off by multibillion-dollar corporations that, despite record profits, hadn’t contributed a dime to those funds on behalf of their workers. Taxpayers coughed up $80 million in pandemic assistance for around 27,000 Uber and Lyft drivers who lost their incomes.

State and federal lawmakers are increasingly considering ways to secure better pay, working conditions, and legal protections for contractors, from California’s AB-5 to recent talks between unions and app companies in New York, though experts say more wide-reaching labor law reforms are needed.

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