Focus

This month's cover feature, "An unfair market," focuses on contractors who intentionally misclassify workers as independent contractors, which, in turn, gives them an unfair competitive advantage and results in lost revenue for local, state and federal governments.

But consider, too, the harm done by those who classify independent contractors correctly.

Fortune magazine reports research conducted by labor economists Lawrence Katz and Alan Krueger shows legal alternative work arrangements, which include independent contractors, expanded 50 percent from 2005-15.

According to an article published in Fortune, Jeffrey Pfeffer, the Thomas D. Dee II professor of organizational behavior at Stanford University's Graduate School of Business, these "new" work arrangements are, in fact, old.

Pfeffer writes: "Today's use of independent contractors paid on a piece-rate system represents a return to the work arrangements of 140 years ago, not some new managerial innovation."

Pfeffer notes the idea of providing benefits and pensions for employees sprung from the idea of "welfare capitalism," which sought to impede the growth of unionization and government regulation. But as companies realized they were incurring costs their competitors were not, more returned to the older model of employment.

"Companies started to cut employees loose quite a while ago," he writes. "What we see today is just a continuation of a trend to treat people as human resources, as assets to be acquired and discarded according to the return for doing so."

But, he argues, cutting employees loose to reduce costs takes a significant toll on the human psyche. Social support in workplaces can reduce stress and improve physical and mental well-being among employees.

Pfeffer writes: "The employment arrangements disrupt an old and important reason for working—the opportunity to be part of a group. … What's missing from the current labor market is a sense of humanity."

Ambika Puniani Bailey is editor of Professional Roofing and NRCA's vice president of communications and production.