The Rise of the 'Disposable Worker'—and How AI Could Make More of Them

Who Counts as a 'Disposable Worker'—and Why the Label Matters

The term 'disposable worker' covers three groups. Contract workers are employed through outside agencies—cleaners or nurses are common examples. Freelancers range from platform workers on apps such as Uber to people earning side income through programming. 'Marginal' employees hold formal positions but have no realistic path to advancement: fixed-term lecturers and junior lawyers doing grinding work without partner-track prospects are typical cases.

The common thread is that these people perform necessary work while employers avoid long-term commitment and investment. Osterman points to McKinsey & Company's 'The State of Organizations 2023' report, which estimates that roughly 95 percent of organizational value is generated by just 5 percent of employees. In his reading, that framing treats everyone outside the small core as essentially unimportant.

He cites Deloitte's move earlier this year to reduce parental leave and benefits for parts of its administrative, finance and IT staff, while sparing other units. A Forbes commentator observed that those are exactly the non-client-facing roles considered most exposed to replacement by artificial intelligence.

Osterman argues that AI did not create the disposable-worker pattern, but it is intensifying it. Because companies cannot predict their future staffing needs, temporary arrangements look financially attractive: they avoid health insurance and other benefit costs. The key shift, he says, is not the total number of jobs but the balance between permanent and temporary roles.

The Economics and AI Risk Behind the Temporary-Work Shift

What the McKinsey 95/5 Statistic Actually Implies

The report's claim is often treated as a productivity observation, but Osterman reads it as a managerial mindset. If a small core is seen as producing nearly all value, the remaining workforce becomes a cost to be minimized. That logic, he argues, helps explain why employers add agency staff, platform freelancers and dead-end roles instead of expanding stable internal jobs.

This is an interpretation rather than a measure of individual worth. The statistic does not mean 95 percent of employees are unproductive; it means value concentration is heavily skewed, which can justify underinvestment in everyone outside the core.

The Deloitte Cuts as a Corporate Signal

Deloitte's benefit reduction for parts of administrative, finance and IT staff is a concrete example of the pattern. The targeted roles are not client-facing, and they are the kind of back-office functions most frequently discussed in AI replacement scenarios. The signal for other companies is that even large, profitable employers may treat certain permanent roles as flexible costs rather than long-term commitments.

Why Uncertainty Pushes Employers Toward Temporary Work

Osterman's core point is financial and strategic: if AI makes future workforce needs unpredictable, employers prefer temporary contracts because they avoid health insurance, benefits and severance obligations. That does not necessarily reduce total employment; it shifts the composition of work toward contingent roles. Young entrants are likely to feel this first, because it is easier to avoid hiring new permanent staff than to dismiss experienced employees.

The hidden cost is morale among remaining permanent workers. If a company's own employees see colleagues treated as disposable, engagement can fall even as near-term labor costs are controlled.

Where Workers and Policymakers Can Find Leverage

For individual workers, Osterman's advice is specific. The leverage of most employees comes from skills that are scarce and portable, not from tenure with one employer. He also stresses contacts outside the current company, so a career does not depend on a single internal sponsor.

• Build portable, scarce skills. If your role can be done by a temporary contractor or back-office AI, its security is already thin. The protection comes from being valued across employers, not from loyalty or seniority.
• Maintain an external network. Because the shift toward contingent work can make roles less stable, having people outside your company who can offer references, leads or support is a practical buffer against sudden changes.
• For low-paid, low-skill roles, treat this as a policy problem, not a personal failure. Osterman points to vocational training, adequate minimum wages and pressure on employers as necessary levers, because workers in these jobs have little individual bargaining power.

For employers, the trade-off is direct: temporary staffing lowers benefit and commitment costs, but it can damage morale among permanent staff and increase turnover in the roles that keep operations running.