Artificial intelligence has fueled fear that millions of workers may eventually lose their jobs. But Paul Osterman, an emeritus professor of work and organization studies at MIT’s Sloan School of Management, says focusing exclusively on how many jobs AI might eliminate overlooks another major workforce change that is already underway and that AI could exacerbate.

In his recently released book, Disposable Workers: The Transformation of Employment , Osterman highlights how employers are already becoming less committed to workers, with 35% of current employees falling into a category he describes as “disposable,” according to a national survey he conducted of over 6,000 workers. That term, as Osterman defines it, refers to three groups of people: contractors, freelancers, and marginal employees. Contractors, he explains, can range from janitors to travel nurses to anyone who works for a contracting company or staffing firm. Freelancers, he says, can range from gig workers like Uber drivers to someone who does computer programming on the side, while marginal workers include people who are legal employees of an organization, but have limited career ladder opportunities.

“So examples of [marginal workers] are adjunct faculty or staff attorneys who do the grunt work in law firms, but will never be considered for partner,” Osterman says. “These are high turnover jobs with no future in the organization. And overall, the big point is that in these three categories, these people get the work done for organizations, but the organizations make no commitment to them. They're disposable.”

Why This Phenomenon Exists

For many employers, Osterman says, the increased use of disposable workers is both an attitudinal issue and an economic one. In his book, he quotes a report from McKinsey & Company called The State of Organizations 2023, in which they state that 95% of an organization's value is produced by 5% of its employees.

“So what are they saying about the rest of the folks? They're saying they're not really important and you see that quite a bit,” says Osterman, as he describes the attitudinal side of this issue.

In one telling example, earlier this year Deloitte, the largest accounting firm in the U.S., announced cuts in new parent leave and family building stipends for some of its administrative, finance and IT support workers, but not for other employees As a Forbes contributor suggested , it may be no coincidence that those jobs, which aren’t core to Deloitte’s client-facing accounting and consulting work, are most vulnerable to being eliminated by artificial intelligence.

Examples such as Deloitte support Osterman’s belief that the rise of disposable workers “is not driven by AI, but it's going to be exacerbated by AI” due to AI creating uncertainty in organizations about what they will need.

“I think no one knows exactly what the overall impact of AI will be,” says Osterman. “Will it increase jobs? Will it kill more jobs than it creates? That's just unclear at this point.”

As a result of many companies not knowing their future staffing needs, Osterman says organizations are faced with an economic issue where it’s financially beneficial for them to hire disposable workers to avoid paying for health insurance and other benefits.

“That's what I mean when I say AI is going to exacerbate it,” he adds. “I'm not talking about the overall employment levels. I'm talking about the mix between regular employees and disposable.”

The rise of disposable work may be felt more acutely by entry-level workers, Osterman says, because it's easier not to hire new junior employees than it is to let current senior people go.

“There's a cost associated with that,” he explains. “There's also morale costs for the people who remain.”

Osterman has two pieces of advice for workers who are looking for some level of career security.

“One is your only source of power in the labor market is your human capital, your skill,” he says. “Get as much skill as you can. You may end up having to change jobs and move around, but if you have valuable skills, that protects you.”

Secondl, he says employees should put a lot of work into building external networks so that they aren’t overly reliant on one company to help build their career.

“You have to have connections on the outside,” he says, while emphasizing that in an uncertain job market it’s important to have a wide network of people you can go to when looking for help with opportunities and referrals.

“For people in lower wage service jobs or lower skill jobs, it's a completely different set of advice,” he explains. “Of course, the advice you give them is to get as much education as you can. But the other advice is it's really a public policy question about having effective job training programs, having effective minimum wages, and having effective pressure on firms to raise the floor in the labor market. It's not so much about the individual because they’re a big piece of the labor market who don't have a lot of individual power.”

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