The Precarity of Tech’s Shadow Workforce

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Earlier this year, a nonprofit organization called the TechEquity Collaborative released the results of its Contract Worker Disparity Project, an investigation into the “shadow workforce” that powers many tech firms. The culmination of a year of research into the disparities in contract work, the report features survey data and first-hand accounts from contract workers in tech who describe range of challenging conditions and inequities, particularly relative to the lavish pay and perks that are offered to full time employees of companies like Google, Facebook and Amazon.

The report includes a number of key findings, such as:

• Job precarity is a major issue for contract workers, who are hired to term contracts and do not have much insight into why they may or may not be extended.
• A consequence of this is a lack of voice in the workplace, since workers are afraid to speak up against workplace harassment or other issues.
• Contract workers often performing the same or similar job functions as directly-employed peers get paid less for the same work.

To learn more about the key findings of the report, to hear more about what it's like to make your living in one of these roles, and to get a sense of the types of policy solutions that would address these inequities, I spoke to two people:

• Samantha (Sam) Gordon, Senior Vice President of Programs at TechEquity Collaborative
• Shannon Wait, Campaign Assistant with Alphabet Workers Union, part of the Communications Workers of America Local 1400

What follows is a lightly edited transcript of our discussion.

Justin Hendrix:

Sam, can you tell us a little bit about TechEquity Collaborative and how you came to know Shannon?

Samantha Gordon:

Yeah, so TechEquity Collaborative, a quick overview of the organization. It's a nonprofit organization that was started about six years ago by our founder, Catherine Bracy, who had worked for a long time at the intersection of technology and civics. And sort of saw these dynamics that were playing out in particular in the Bay Area, in California, around tech's role in sort of driving up inequality in the community and said, how can we get tech workers thinking critically about these issues, engaged in these issues and taking action on structural reform to try and reduce inequality in our communities? And so TechEquity was founded on that idea and really starts at the center with education and engagement of tech workers around housing issues. And through that work, realized you can't just talk about if people can afford where they live, you also have to talk about what kind of jobs they have and if those are good jobs that allow them to stay in the community. So took on labor.

And I can talk more about the model, but through time, TechEquity has really focused on education engagement at the center with two main levers for change. So one being public policy, which I know we're going to talk about some in this conversation. And then the other is when a company says they want to do the right thing, if they commit to voluntary for practice change, can we get them to change corporate practice and improve the lives of their employees or the experience of the communities they're working within overnight quicker than laws can?

And I came to the organization at the end of 2020. I had spent the last 13 years at the Service Employees International Union. So I've been a labor organizer for a long time and was really interested in the role that tech was playing both in terms of workers' rights, but also just the companies and their scale and their size, and really understanding what's happening inside them. So that's how I came here and Shannon and I have worked pretty closely together on a big initiative at TechEquity called The Contract Worker Disparity Project. And we've learned a lot from Shannon's experience as a contract worker, as well as from the experience of lots of her colleagues who are contractors with various companies that contract with Google.

Justin Hendrix :

Shannon, can you tell me a little bit about your trajectory and what you did?

Shannon Wait:

Yeah, so I started working at a Google data center in 2019 as a TVC or a 'temp vendor, or contractor.' So I was a temp worker for a company called Modis Engineering, which is a subcontractor of the Adecco Group, which is a huge international corporation that supplies TVCs for hundreds of companies and one of the largest suppliers for Google. While I was working at the data center, I was under the impression that I knew it wasn't a guarantee that I could convert to full time, but that it was a very common practice that Google converted TVCs to full time employees who pretty much make over double in salary, and then there's benefits and perks that Googlers get that TVCs do not. So while I was working there, I started noticing there was a lot of inequality in the workplace between these two groups of workers. We call that the two tiered workforce at AWU. And I joined AWU during the pandemic, during the early phase of the pandemic that we're still in.

And when I joined Alphabet Workers Union, one of the issues that was dear to me was this two tiered workforce, which was kind of foreign to most of the Alphabet Workers Union members at the time who were mostly FTEs at Google. And I was suspended a couple weeks after joining AWU because I went on my Facebook wall and started talking about how the two tiered workforce is an inequitable system that companies like Google purposely use to subsidize their workforce and that the career path to becoming a full time employee was slipping away from so many of us. And just how at a company that preaches to have progressive values in the 21st century have an employment model like this. It was a mystery to me, but I was suspended and with Alphabet Workers Union, I and the union filed an unfair labor practices claim at the National Labor Relations Board and both Google and Modis settled.

They had to put a notice up in the data center that we are allowed to talk about pay, we're allowed to join a union, we are allowed to talk about our working conditions. And so it was a slap on the wrist for Google, but still a strong victory for a union that only had about 700 members at the time and no NLRB recognition. But now I work with TVCs in Alphabet Workers Union, and I focus on data centers as well, trying to help workers find their power and stand up for what they deserve as people who build this company.

Justin Hendrix :

The story of your experience really does set up well this report that the TechEquity Collaborative put out, shining a light on tech's shadow workforce. So you all set out to put a little diligence into looking at this problem and describing it through your framework, Sam.

Samantha Gordon:

It actually came out of work we had done a few years back with Silicon Valley Rising, which had been really looking at the experience of service workers on tech campuses. So folks that were driving buses or working in the cafeteria or doing maintenance on the property, and a lot of them weren't making living wages or receiving benefits. And so we worked with them to set up a responsible contracting standard and asked tech workers and tech companies to say like, yes, we should commit to these things. And Silicon Valley Rising worked closely with unions on the ground and with workers to figure out how to access those benefits. And through that experience, we started getting calls from workers like Shannon saying, "Hey, this is great. And I make 15 or I'm okay on this piece, but I have all these other problems. And I sit side by side with directly employed tech workers. And I don't have days off, I don't have benefits. I think I'm making less money. I don't have a guaranteed contract. Can you talk about what's happening to us?"

And so when I started at TechEquity, Catherine, our executive director was like, 'we've been hearing this it's been reported about a little bit, but it's really a phenomenon that's not been uncovered at scale.' And so we set out last year to really try and illuminate what was happening. So we did first person worker interviews one on one, we did a survey, we put out a series of working papers, and I want to lift up our senior policy manager, Hannah Holloway, who led a ton of this work and really helped sort of explain what's happening. Like what's the incentive for companies to do this? How do the staffing agencies work? How is this distinct from the thing that I think a lot of people have started to understand around gig work, because it's a different type of employment relationship? And why do companies do this, especially if companies have a lot of money and do they really need to save money this way? What's the incentive structure?

So she really set out to explain it. And the report does a lot of that. Just like walking through, like what is this? Why does it happen? Who benefits? Who loses? And what's the experience for workers? And through that work, we found that one, the data is very hard to find on this workforce. I'm sure Shannon could tell you the same thing, that most staffing agencies, which supply this labor workforce to tech companies, and lots of companies, not just tech. They've worked hard to get themselves exempted from every public reporting system that exists in the country. So EO1s, California has paid data reporting. They don't have to report. So the data on sort of "How widespread is this? How many people is it happening to?' is really difficult to get.

And the practice is vast. According to The American Staffing Association, it's grown to like a $35 billion industry in California alone, of these staffing agencies and providing contract labor. But it's difficult to understand, where's that labor going? Which companies are folks being treated well? Or what's happening? So that was really the goal, the report is to shine a light on it and to provide some recommendations for public policy changes. And we laid out, I think, a pretty comprehensive, responsible contracting standard so that when companies say we value this, we don't want to become a bad employer. What can we do? It's like, well, here's a pretty holistic view of all the different changes you can make to support setting a better floor for contract environments. I don't know if that speaks to it well, feel free to ask other questions. But that's kind of an overview.

Justin Hendrix :

So you point to this dual management structure, you talk about some of the impacts of it. And in particular, you highlight job precarity, a lack of voice in the work for contract workers, unequal pay, of course, you've mentioned that. And then racial and gender over-representation in certain jobs. Can we talk those through a little bit, talk each of those points through.

Samantha Gordon:

Yeah. And Shannon, you should feel to hop free to hop in. Because I know you live and breathe the dual management structure and all lot of these issues, but just to kind of explain it from the report and from our research perspective, the dual management structure means that essentially a worker will get recruited and get hired by a staffing company. And then they will report to often a tech company for their day to day work. But in the dual management structure, that tech company, they might have a lead on a project who's designing how many hours they work, what their assignments are, the content of the work, giving feedback. That manager is still technically not their manager. So if they need to talk to someone about HR issues, about their pay, about a raise, they have to go back to the staffing agency who doesn't have any connection to their work and what they're doing on a day to day basis. And there's all sorts of things that sort of sound small, but actually really matter in terms of your ability to do the job.

So for instance, at a lot of companies, contract workers can't access internal portals with documentation, with files, with drives. Often they're not allowed to present on their work to people within the company, which dis-incentivizes them from getting permanent direct employment roles. And importantly, and this connects to pay, voice, and all the other issues, because there's this dual management structure, when there are issues at work, they are nervous to speak up about them. Because the tech company decides if their contract gets renewed. So they may not have to officially fire you. They just never renew your contract. And so a lot of folks, they don't want to raise a fuss, they don't want to raise an issue because their economic security is dependent on that team saying, oh, this person, we need them for another three months. So they're constantly trying to make sure that their contract gets renewed.

And in terms of the question on gender and racial diversity, our studies again, we need more data on this to give like a big, huge scale. But our study, which is the largest of this kind in tech showed that disproportionately the contract workforce is black, brown, indigenous, non-binary, women as compared to the directly employed workforce. And even if you look within the contracting workforce at who gets converted, white contract workers were more likely to become converted to directly employed at the tech companies than contract workers of color. So these gender and racial disparities, they sort of set the container for in our report, we allege the potential for occupational segregation and a variety of harms that can come if tech companies aren't thinking critically about what's happening in this dual management structure and who these folks are.

Justin Hendrix:

Shannon, does that correspond to what you're seeing on the ground?

Shannon Wait:

When I started working there at the Google data center, I was brought on on a three month contract. And when it came time for the contract to renew, it was renewed for another three months and then another three months. And it was renewed for another three months and they do this. This is a very common practice with a company like Google because Microsoft had a lawsuit in 1999 where workers who were temporary workers, but had contracts extend beyond a two year mark were able to claim in court that Microsoft was a joint employer and was in fact liable to owing them benefits and wages for the past seven plus years that these temporary workers were on the floor. So Google will max out your contract at two years, and then you have to take an involuntary, but mandatory six month hiatus and work elsewhere. And then you can come back and start another round of three month contracts until you hit your two year mark again.

This is unsustainable for folks in rural areas where most of these data centers are located to prove that they had a long term employment in order to start a family. I mean, get a mortgage. This harms the community in more ways than just, oh, these are workers who don't have secure employment and only make $15 an hour. So while I was there, I also noticed that it was very common for someone's contract renewal to not come in until the day that their contract was up.

I remember it was Christmas of 2020, and I saw a coworker of mine, like crying at her workstation on the data center floor. And this was not uncommon. People cried a lot on the data center floor at Google. It's like you're by yourself, and you can be in your own thoughts and you can just let yourself feel whatever emotion you're feeling. And so it was very common to see this. I asked her "What's going on? Like what's wrong?" And she said, "My contract is up on January 1st and I still haven't her heard anything. So I'm not buying my kids Christmas presents." She was a single mom with three kids. And that just enraged me so much that it wasn't even about me at that point. And the fact that I'm a single woman who makes $15 an hour. Like this practice, I don't know how executives at this company sleep at night, knowing that over half of their workforce, 250,000 plus people live like this at what is to be one of the most rich companies on the planet.

Justin Hendrix:

So this precarity, this precarious nature of this employment. Tech companies sell this as flexibility, as the opportunity to chart your own path, to work seasonally, to really take advantage of flexible economy. How do you feel like the workers that you're in touch with feel about that?

Shannon Wait:

I can speak about flexibility as someone who lived it. Flexibility is being able to drive a car to work that works, being able to afford gas, and a nice, decent standard of living and being able to take a vacation with your kids once a year at the very least. I, in two years at Google did not have a vacation. I know a lot of people who didn't have a vacation, couldn't buy Christmas presents for their kids. That's flexibility.

And so when they talk about these models, I mean the inflexibility to go to the doctor, and put off going to the doctor when you're sick, or when you feel something isn't right with your body, that is a huge problem that I don't think that these companies are willing to humanize their workers in the way, when they use a word, like flexibility, it dehumanizes these workers on a huge level. And it's almost like you're talking about, yeah, you're talking about a shadow workforce that you can't imagine in your mind what they're going through on a day to day basis. So, yeah, I laugh when I hear the word flexibility when it comes to gig workers and contractors and intents, because if I'm not laughing, I would be crying.

Justin Hendrix:

So Sam, the report concludes with policy solutions. You've got a range of ideas for what could be done to try to take this precarity and these other harms, perhaps a bit more out of the economy. What do you think needs to happen?

Samantha Gordon:

Well, the thing I can say we're starting with is trying to get our arms around the data. I think that smarter decisions can be made when you understand what's happening at scale. And so we're running a piece of legislation this year, along with Alphabet Workers Union is signed on to support, national Employment Law Project, California Employment Lawyers Association, The California Commission on Status of Women and Girls, the Equal Rights Advocates. There's a ton of folks signed on to this legislation, which would essentially, it's called The Pay Transparency For Pay Equity Act. So it would close the loopholes that staffing agencies have lobbied for in past legislative sessions to exempt themselves from accountability and reporting on their workforce. So in California, existing law says that private companies with 100 or more employees have to report to the Department of Fair Employment and Housing, I think it's pay bands, I want to say. Pay bands by gender, race and ethnicity. So this law would remove the exemption for staffing agencies so that they have to report just like any other private employer if they have more than 100 employees, they report on those.

It would also lay out that those reports become public by company so that we can get our arms around the gender pay gap and the racial pay gap in California. It also really tackles this, not just looking at what's happening once people are employed, but it looks at the entire employment cycle. So it says from hiring all companies that are hiring in California, have to include the pay, a reasonable salary band in the job description. If companies are going to make promotional opportunities available, that they have to make those public to their existing workforce, so that there's not a continuing sort of homogeneous preference around who gets access to a promotion. And it would say once those folks are in, you need to report on what's happening with that workforce.

So that's the bill we're running right now, it's Senate Bill 1162. Our author is Senator Monique Limón, and it builds upon California's really strong tradition of figuring out 'how do we really address the equal pay gap?' And I will just add that the Department of Fair Employment and Housing came out with a report this past Tuesday on equal payday that showed that there was an over-representation in California of women and black and brown workers that make less than $30,000 a year. And that those same workers were completely underrepresented in pay bands above $130,000 a year. So the evidence really couldn't be more clear. We have a problem, and until we can get clear on where the problem exists and why, companies can't make smarter decisions, the public can't make smarter decisions, and frankly workers need that information to make decisions about where they want to be. So that's the first piece that we're really focused on this year and we're hoping becomes California law by the end of 2022.

Justin Hendrix:

Shannon, are you or your union involved also in helping to push that law through?

Shannon Wait:

Alphabet Workers Union did sign on as a supporter of this bill. I think that it would change a lot of people's lives for the better throughout the country to know that a position opening up at Google is something that workers like me ... If I could have known about it and applied to it, that would change everything. The fact is these positions don't really open up anymore. And when they do, they open up internally for Google FTEs only, and TVCs aren't eligible to apply for those roles, even if they're well qualified. And I have seen the disparities, especially at Google data centers, but I know that this is a company-wide issue. You have a large portion of the workforce is cis, white males who are Google FTEs and work in the pay bands between $500,000 annually. And on the lower end, maybe around $125,000 annually.

Meanwhile, most temp workers at Google data centers that I've seen and spoken to and gotten to know are making $30,000 or less. And especially black women making up a huge portion of the workforce at data centers that works in the kitchen, and as cleaners, and logistics, and doing the heavy, like hard labor that is skilled labor. And we can't forget that. So just seeing those disparities and combining that with the data that has been provided by this project, I don't see why this bill shouldn't pass it. It would be an instant win for workers across this country.

Justin Hendrix:

So I grew up in a small rural town in Virginia that was a mill town, a textile town. And that town had this sort of history of its relationship with the company and a lot of the labor fights that appear to be going on right now with big tech firms. They really seem to harken back to the early days of the labor movement. It really feels like that to me when I hear these stories. Do you think we're sort of repeating history here?

Shannon Wait:

I am a historian first and a union organizer, second, and I always say that. So as someone who has grown up in Charleston, South Carolina my whole life, and just what a prominent role it took place in the Civil Rights Movement at the intersection of labor history. I always think back to moments like the hospital workers strike in Charleston in the 60s and the cigar factory strike in the 40s. In Charleston, South Carolina, these are black women leading these efforts in the labor movement. And we have to be able to take what has been passed on to us, by people who have been marginalized, and just lived through this history in the roughest and toughest way possible. And with the privilege that comes with being a white man, a full time employee at a big tech company that provides a deep standard of living for a good size of its workforce.

While the other side of the company, these folks are marginalized and they don't make a decent wage, they don't have healthcare. We have to look back to the labor movement through throughout the earlier of the Civil Rights Movement and American history. And we have to like go back to those values and not recreate it. But as far as legislation goes, we have to push that forward. That has to be more progressive and we have to move forward there. We've gone backwards in legislation and labor law is so broken, and it puts a slap on the wrist of companies like Google and Twitter and Facebook. And I don't know, I don't think we should let such a great movement that has come before us fizzle out. It has to continue.

Samantha Gordon:

Yeah. I would just add that I'm very heartened to see all of the different ways from Shannon's work and AWU to folks a few years ago, which I think was the precursor to AWU leading the walk out on issues of substance, of what was happening inside the company at Google. All the myriad ways that workers are coming together, I think ... I have like five thoughts going. So I apologize, but Justin, when you were saying you were from a mill town, I'm from Moline, Illinois, which is the Latin word from mill. So same. And I'm from a town that also has an interesting relationship with ... John Deere's headquartered there and a lot of manufacturing was there.

And I think one of the things that really comes to mind for me in this moment of worker power is in 2010 and '11, when I was starting to get really upset and really despondent about worker power in the country, my boss at the time who had helped found the 9to5 Union and had done a lot of organizing, she said something that's always stayed with me, which is, "As long as there's been work, workers will organize And it comes in myriad forms." And so I think one of the things that's exciting about tech workers is that they really understand their power. So I apologize, I keep talking about Google, but there's been just incredible public and visible activism coming out of there. I think the way that Alphabet Workers is not just fighting for better wages and benefits, which those workers really deserve. They're also fighting on where Google's placing contracts. And whether or not they should be working with governments that are doing things that we find objectionable. And really using that power to say no more.

And then they have high profile cases like with Dr. Timnit Gebru leaving on ethical grounds, around algorithmic bias and reporting and research that she was doing there. I think the thing that's exciting is there are so many different forms of how people are coming to this issue. And I think that every single form is needed because these companies are massive. Just massive. So from coworker.org really helping workers in digital formats and building campaigns to traditional labor union organizing to Tech Workers Coalition, which is bringing together tech workers to think about all the different pieces. And I even think our work, which is different, but is really trying to daylight these issues and sort of say, here's a floor. Like this is absolutely what should be happening and doing that in partnership with folks that are most impacted. I think that all of those pieces are necessary to come together to really make sure that power is more equally balanced. Because right now it's really in the hands of wealthy corporations and frankly wealthy individuals in this country.

Justin Hendrix:

Shannon, I'll give you the last word. If there's something you want to say perhaps to one of those executives that might listen to this podcast or to a lawmaker.

Shannon Wait:

Yeah. It's difficult to find the right words to say to someone like Sundar Pichai who probably just enjoys the finest standard of living that I can only imagine. But I will say that if you're a lawmaker and are not willing to sign on to something like this, or if you are in business and don't support these measures, then you are anti-worker, you are-anti worker. And that you are anti the average American person. And I include any kind of immigrant in that. You just do not sympathize with hardworking people who live in this country. And we always hear that. It's all about working hard. It's all about pulling yourself up by your bootstraps.

But these kind of measures exist to make those kind of things impossible. Who don't own homes in this country, who are drowning in student debt, who can't go to the doctor when we are sick. We grew up on these ideals as if we are entitled to them. And I believe that as human beings we are and when a company has record profits and the surplus labor value is not passed on to the worker. To me, that's theft. And you are stealing from people who are building your company to be so successful.

Justin Hendrix:

Shannon, Sam, thank you very much.

Samantha Gordon:

Thank you.