MIT Study: 35% of U.S. Workers Now Classified as 'Disposable,' No Benefits, No Career Path

MIT Sloan School of Management professor emeritus Paul Osterman has a new book out. The title says it all: "Disposable Workers: The Transformation of Employment."

His core finding, based on a survey of more than 6,000 civilian, nonagricultural working adults conducted in late 2022, plus nearly 100 interviews with workers, employers, and staffing agencies: 35% of the American workforce, roughly 57 million people out of 162 million total workers, gets treated as disposable by the companies that use them.

What Counts as Disposable

Osterman breaks it into three buckets, according to reporting from Forbes and Markets Insider, which published a press release tied to the book's August 11 release by Harvard University Press.

Contractors make up 13% of the workforce. These are people employed by a staffing firm but working at someone else's site, everyone from office cleaners and security guards to travel nurses.

Freelancers make up 5%. Uber drivers, food delivery drivers, freelance programmers, freelance journalists.

Marginal workers make up 17%, the largest chunk. These are actual employees on a company's payroll who get boxed out of any real career track. Osterman's go-to example is staff attorneys at big law firms, hired to do the grunt work with zero shot at making partner. Adjunct faculty at universities are another. So are large numbers of part-time and low-wage service workers.

"When people talk about the gig economy, they're picturing Uber drivers and DoorDashers. But that's a small slice of this, less than two percent of the workforce," Osterman told Forbes. "Contractors and other marginal workers make up a far larger share of the workforce. Add it up, and we're not becoming a gig economy; we're becoming a disposable one."

Why Companies Do It

Osterman's answer is blunt: it's cheaper, and it dodges legal obligations.

Businesses using contractors and part-timers instead of full-time staff can scale up or down on demand without paying for training or health insurance, according to Markets Insider's coverage of the book. Some companies keep workers deliberately under legal thresholds, Osterman found, specifically to avoid triggering requirements like paid leave and anti-discrimination protections.

Osterman also points to an attitude problem among corporate leadership. He cites a 2023 McKinsey & Company report, "The State of Organizations," which found that 95% of an organization's value comes from just 5% of its employees. Osterman's read on that: "So what are they saying about the rest of the folks? They're saying they're not really important."

McKinsey's report isn't a neutral academic study. It's consulting-firm messaging aimed at clients, and "value produced" metrics are notoriously squishy and self-serving for whatever argument a firm wants to make.

The Legal Baseline Being Skipped

A standard full-time employee gets what legal scholar Cynthia Estlund calls "a fortress of rights and benefits," according to Osterman's excerpt published by MIT Sloan's own Ideas Made to Matter site. That includes W-2 tax withholding, Social Security and unemployment insurance contributions, Affordable Care Act health coverage requirements, and protections against age, gender, and race discrimination.

Disposable workers, by definition, get cut out of most or all of that. There's no implicit contract, no mutual commitment, no career ladder, according to Osterman.

AI Could Make It Worse

Osterman told Forbes that the AI jobs debate is too narrowly focused on how many jobs the technology might eliminate outright. He argues AI could instead push more workers into the disposable category by making it easier for companies to break jobs into smaller, more replaceable tasks handled by contractors or gig workers instead of full staff.

That's a prediction, not a documented trend yet. Osterman offers it as a warning about where things are headed, not a measured outcome.

Where the Coverage Gets Shakier

Not every source in this conversation holds up. One widely circulated piece attributes to former Labor Secretary Robert Reich a claim that "worker precarity" is driven by policies that "reward volatility and rent-seeking." That same piece cites an Economic Policy Institute figure claiming 43% of full-time workers lived paycheck-to-paycheck in 2020, and an unsourced claim that 80% of workers worry about losing their jobs. Neither figure traces back to a verifiable, dated EPI report, and the piece offers no citation trail. Treat those specific numbers with skepticism until someone can point to the underlying study.

Osterman's own data is more solid ground: a named, dated survey methodology, a named publisher, and a specific author standing behind the numbers.

What's Actually Unresolved

Osterman's survey is from late 2022, and the book landed in August 2026. Nobody in this reporting has run a comparable follow-up survey to show whether the 35% figure has grown, shrunk, or held steady in the years since, or whether AI adoption since then has already started reshaping the numbers Osterman is warning about. That's the open question his book raises but can't yet answer with fresh data.