The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It

by David Weil

For much of the twentieth century, large companies employing many workers formed the bedrock of the U.S. economy. Today, on the list of big business's priorities, sustaining the employer-worker relationship ranks far below building a devoted customer base and delivering value to investors. As David Weil's groundbreaking analysis shows, large corporations have shed their role as direct employers of the people responsible for their products, in favor of outsourcing work to small companies that compete fiercely with one another. The result has been declining wages, eroding benefits, inadequate health and safety conditions, and ever-widening income inequality. From the perspectives of CEOs and investors, fissuring--splitting off functions that were once managed internally--has been a phenomenally successful business strategy, allowing companies to become more streamlined and drive down costs. Despite giving up direct control to subcontractors, vendors, and franchises, these large companies have figured out how to maintain quality standards and protect the reputation of the brand. They produce brand-name products and services without the cost of maintaining an expensive workforce. But from the perspective of workers, this lucrative strategy has meant stagnation in wages and benefits and a lower standard of living--if they are fortunate enough to have a job at all. Weil proposes ways to modernize regulatory policies and laws so that employers can meet their obligations to workers while allowing companies to keep the beneficial aspects of this innovative business strategy.

Genres: Labor, Nonfiction, Economics, Business, Politics, Sociology, Law

424 pages, Hardcover

First published February 17, 2014

Reviews

[Marks54 · Rating 4 out of 5]

I have been working through a series of business/economic trades recently and while each is different and most are fairly good, they all seem to share a common theme - when it comes to American work life in the late 20th and early 21st century, the point is to forget about gravity as the force holding the world together since the world basically S_CKS.

David Weil has written a book which performs a neat trick in this literature. He provides a macro story about why the economy is getting hollowed out, why jobs are getting outsourced and offshored, why wages are stagnant for the bottom 90% of the workforce, and a bunch of other problems. Professor Weil is a labor economist, which makes his accomplishment of telling this book’s story that much more amazing, since labor economics is seldom conducive to soaring story lines.

The story starts back in the mid-19th century. The large American corporation - one of our enduring gifts to the world along with jazz - came about then when we figured out the details for scale and scope economies through mass production and distribution. This part of the story is well known and not very controversial. Then it gets interesting. To achieve the benefits of mass production and distribution, the large corporations figured out that existing markets were so underdeveloped that they had to do all their support work themselves. This included building a supply chain, hiring workers, building and maintaining large buildings, working with various government agencies, and so on. If you really think about economic markets, why not hire someone else to do those jobs that are not key to what you are doing (mass production). The reason is that the benefits of doing it yourself were far superior to the costs of hiring middlemen. Hence we get the large horizontally and vertically integrated firm - General Motors in its glory, ATT, Sears, DuPont, US Steel.

So far so good, and it stayed that way until the mid-20th century, more or less. Then, all the conditions that made large vertically integrated firms so sensible in 1880 changed to turn these firms into dinosaurs by 1980 and afterwards. Cue Bruce Springsteen songs!

So when large firms started to face competition and found themselves inefficient and far too costly to compete (Boeing versus Airbus in 1990), they went through the process of stripping their activities down to the key activities they did well (core competence) and started selling off and contracting out for all of the support activities they used to do themselves. The details of the transition are hugely complicated but the net result is that costs were cut and activities closed down, outsourced, and given to much cheaper labor. And what about the large workforce that had come to depend on large corporate largesse? Too bad!

That is the basic idea with Weil’s book. He goes through the argument in detail, gives lots of examples, and is really insightful on the different organizational forms involved in the transition. His sympathies with the workers getting screwed in this process are clear and he gives some good examples of how the labor department agencies have started to deal with workplace fissuring.

The problem, of course, is that the book was published in 2014, two years ahead of the 2016 election. The current start of workplace regulatory reform has likely not followed his recommendations. In addition, these are big problems that took a long time to gestate and will take a long time to work out. Even thoughtful recommendations like Weil’s will come across as a bit of a reach.

But all that is OK. This is a hugely informative book that is actually not bad to read - I hesitate to say “fun” but it flowed well. There are tables with data, but nothing that terrible and all well explained in the text. Best of all, this book will help provide a bit more meaning to the chorus of complaints about the hollowing out of the economy and the struggles of the gig economy and a growing contingent workforce (although if recent BLS data are correct) the contingent workforce is not growing as fast as was once thought.

If you are looking for a casual read, this book is probably a stretch. It will reward focused attention.

[Scott Schneider · Rating 5 out of 5]

In this book David Weil identifies an important trend in the past 30 years, subcontracting, franchising and outsourcing have "fissured" the workplace. Employers have shed and contracted out any work they can to shed liability and employees. The consequences have been devastating to the economy and the middle class. The practice has essentially required that these subcontractors competing in a very competitive market have to violate labor laws to win the contracts. It is very dysfunctional. Luckily he points to a number of promising developments and solutions that have emerged the past few years. He calls for a new ethic among companies and society to not tolerate fissuring that is done for such purposes. He puts his finger on a very important problem. It was a very thoughtful and thought provoking book.

[Paul · Rating 4 out of 5]

Excellent book on a central issue for our time. The breaking apart of supply chains into nominally independent contractors has undone many of the gains fought for in the 20th century by the labor movement. Example: large coal mining firms getting out of paying owed benefits by transferring employees (along with their healthcare and defined benefit plans) to small firms which rapidly go bankrupt.

The proposed solutions didn't seem plausible to me, but raising awareness of how firms are operating is valuable.

I thought the argument could have been made in 40 pages or less - this book would have benefited either from a paper version or a journalist coauthor.

[Lydia]

Parts I and II were more engaging, possibly because I am not optimistic the workplace can be mended. Would like to read more about the emerging fissuring industries (as a museum/non-profit worker).

[Frank Brooks · Rating 4 out of 5]

Good historical survey at the beginning and interesting umbrella of what constitutes "fissured": subcontracting, franchising, supply chain. Pretty convincing (albeit muted) in arguing that fissured workplaces are more likely than mid-century corporations to exploit their workforces through such practices as wage theft, overtime violations, misclassification (e.g. "independent contractors" rather than regular employees), and unsafe workplaces. If they don't engage in such practices (i.e. if they follow the rules), heavy competition in fissured sectors is likely to drive them out of business. It's not primarily bad intent, but the structure of sectors where "lead corporations" increasingly spin off functions and employees so that they can focus on their "core competencies." Weil doesn't think that corporations will return to their more responsible (read "bloated" for conservative critics) selves, so regulation (both laws and increased enforcement) will need to focus on those lead corporations, forcing them to re-balance the "social costs" imposed by fissuring with the economic benefits they enjoy from being leaner corporations.

[Beth Melillo · Rating 2 out of 5]

I really wanted to like this book, the topic ( labor/employment law, safety, good work, the employee experience, and the dream of small business ownership) is of strong interest to me.

But other than the introduction, which engaged the heart and mind in the lives of those affected by fissured work, the writing was circuitous and dry, with a lot of jargon - maybe Weil spent too much time reading Wage And Hour documents and the tone seeped into his style). I think if this book had been written by a journalist, it would have been far more engaging.

So, I often found myself struggling to get what the relevance of a particular paragraph was to the chapter. Ultimately, I had to put the book down without making it into the solutions portion, I suppose I'll just read the author's HBR article to get the ending: https://hbr.org/2017/03/making-employ...

[Vishnu · Rating 4 out of 5]

I'm not saying that everyone should read this book, per se, but I think at we all can benefit from understanding the underlying dynamics of the labor market. This book does a brilliant job at explaining them in a very accessible way with many examples for illustration.

The book is probably a bit too long for it's own good, but it is a quick read. It also paints a kind of bleak picture for the future of the middle class and the types of jobs that can support family well-being. I guess that's kind of what motivating him to write it, though. Along with innumerable other social commentators, his point is that the nature of job markets is really, really unfavorable for the vast majority of American workers. This has to be the starting point for any discussion of reform, a discussion on which the book does offer many possible ways forward.

[Stacy Edgar · Rating 5 out of 5]

This is an important read for anyone working on economic policy in the US. The main thesis is that businesses are using subcontracting to sidestep the costs and responsibilities of being an employer. These risks are shifted to smaller actors - small businesses and independent contractors- who are less equipped to manage these responsibilities. The author makes a compelling case that these dynamics have contributed to income inequality and wage stagnation here in the US. The
book also has international policy applications, as US businesses increasingly subcontract to international businesses within their supply chains.

[Evans Lusuli · Rating 5 out of 5]

Great insight into why work is changing for so many

I enjoyed the research rigor Weil put into understanding, explaining, and outlining the history, rationale, and consequences of fissuring work. Highly recommend this book for Human Resources, compensation, economists or students who want to understand why work is changing for many.

[Kalpar Kalpar · Rating 4 out of 5]

A good overview of the worsening of employment in the US economy as it stood circa 2014. Unfortunately the eleven years since this book came out have been so dramatic, from the rise of the gig economy to COVID to our current tariff crisis, that it is now sadly outdated. An important historical artifact, but at the same time an artifact.

[Max Brodsky · Rating 4 out of 5]

Important read to focus on the details of how work has moved from one shop to contracted out. Coupled with some other books related to macroeconomic trends, it's sure paints a scary perspective for the future of work.

[shuqing chen · Rating 4 out of 5]

Eye-opening issues and topics but the writing is on the dry side, which is to be expected. But I recommend reading at least the introduction and Part 1 to appreciate what is essentially the backbone of capitalism in US.

[Robert Stutchbury · Rating 5 out of 5]

I HATE UBER I HATE LYFT I HATE SHIPT I HATE INSTACART I HATE TASKRABBIT I HATE EXPLOITING THE MARGINALLY ATTATCHED WORKFOCE JUST LET WOMEN HAVE NORMAL JOBS

good book

[Eric Bottorff · Rating 4 out of 5]

Weil's analysis of the fissured workplace--why and how it evolved, what its consequences are, etc.--is brilliant and necessary reading for anyone seeking to understand recent macroeconomic trends. My only real problem with the book is that his solutions often feel relatively lackluster, and in proposing them he seems to forget his otherwise solid grasp of the political economy of the US.