California AB 257 Is Tip of the Iceberg When It Comes to 'Workplace Fissure'

California Governor Gavin News has signed AB 257--a bill championing workers' rights in the fast food industry--into law. Despite being a huge step forward for workers, tens of millions of dollars will be spent trying to kill it. Before anyone has a chance to vote on it via a possible ballot measure, it's key that people understand the bigger picture of just how damaging, pervasive, and exploitative "workplace fissuring" is throughout almost every industry.

Workplace fissuring occurs when an employer starts to crack little bits of its business off in order to outsource these tasks. Fissuring began in the 1970s with companies seeking to maximize profits by shedding janitorial or security work, but the practice has grown exponentially across almost every sector of our economy. The reason is clear: by sidestepping their responsibility for workers through the use of contractors, companies take on less responsibility and gain higher profit margins.

If exploiting workers for a more profitable McDonald's turns your stomach, you'll want to reconsider where you sleep, seek care for your aging parents, or even where you get legal advice.

At the heart of AB 257 are franchised restaurants: Most of us are familiar with the concept--a franchise owner may run and control a particular McDonald's, but they are beholden to the McDonald's corporation to operate that restaurant according to strict standards set by the parent corporation. A Big Mac tastes the same everywhere. But those standards place such pressure on individual franchisees that their workers inevitably suffer wage theft, discrimination, unsafe work environments, unstable schedules, and chronic understaffing. Franchisees are so squeezed by their corporate bosses that the only avenue to eke out profit is through cutting labor costs, which incentivizes franchises to act illegally when it comes to their workers. And while workers suffer, corporate executives and shareholders win big: the McDonald's corporation reported a $13 billion profit in 2021.

The fast food industry is the epitome of an exploitative work environment. It's harder to enjoy that Big Mac when you become aware of the human cost behind it. Not very appetizing.

If exploiting workers for a more profitable McDonald's turns your stomach, you'll want to reconsider where you sleep, seek care for your aging parents, or even where you get legal advice. That's because hotels, the homecare industry, law firms, and just about every other white collar sector profit thanks to workplace fissuring.

In my work I focus specifically on improving job quality and how empowering workers ultimately builds better public policy. The evidence is clear: more and more, any task that employers can outsource gets downgraded into a hazy web of subcontractors. It began with things like payroll, accounting, and human resources, then moved on to janitorial services and customer service. In some industries, it's gone far beyond that to some of the functions most of us consider far more "front of house" tasks such as home care workers, university staff, and, yes, actual front desk workers. Step into a hotel and most of the people you encounter are unlikely to actually be employed by that hotel.

Even workplaces that we understand as social goods--hospitals and nursing homes, schools and childcare centers, and social work--are all experiencing fissures. The bottomline for employers is improved profit margins, while the bottom line for workers is fewer rights, protections, and dollars in their paychecks. In our McDonald's example, the corporation or franchisor, avoids paying into unemployment insurance, workers compensation, and payroll taxes, yet the corporation dictates almost every detail of the working lives of the people in those roles.

In his landmark book, "The Fissured Workplace," David Weil found that the chance of a labor violation being investigated in fissured industries was as little as one in 1,000, compared to one in 100 at a non-fissured workplace.

If workplace fissuring continues to grow at the exponential rate we're currently seeing, the result will be that workers' rights, power, and pay will suffer. But as California showed us, the slow erosion of our rights at work isn't inevitable. Hopefully, the law in California will stand and more states follow that lead, so that we may see the trend moving in a much more just direction.