Business & economics, Research

Study shows problems for subcontracted property service workers

Subcontracting in California property services comes under scrutiny

The increased subcontracting of work for janitors and security guards in California over the past 30 years has led to lower wages, fewer benefits, higher rates of part-time work, inferior working conditions and illegal labor practices for those employees, according to a study released today by UC Berkeley’s Center for Labor Research and Education.

The report, “Race to the Bottom: How Low-Road Subcontracting Affects Working Conditions in California’s Property Services Industry,” says the share of janitors in California hired by contractors more than doubled from 1980 to 2014, and the share of subcontracted security guards rose by 50 percent as office buildings, retailers, high-tech companies, residential developments and other industries moved to cut costs by outsourcing cleanup as well as security.

janitor in big building

UC Berkeley researchers say that property services represent “the archetype of the subcontracting story” in California. (Image courtesy of Creative Commons)

The researchers say that while Uber and other gig-economy businesses are garnering a lot of the attention around deteriorating labor conditions, subcontracting affects much more of the workforce. Property services represent “the archetype of the subcontracting story.”

The report — the first to cover these services over a 30-year period — includes these key findings about janitorial and security service jobs in California:

  • From 2012 to 2014 contracted janitors earned 20 percent less than non-contracted janitors ($10.31 an hour compared to $12.85 an hour), and contracted security workers made 18 percent less than their non-contracted counterparts ($11.91 an hour compared to $14.48 an hour).
  • Some 45 percent of contracted janitors and 32 percent of contracted security guards had no health insurance coverage in 2012-2014.
  • Fifty-three percent of contracted janitors and 36 percent of contracted security guards live with families that fall below 200 percent of the federal poverty level, and 48 percent of workers in both categories have at least one family member receiving public assistance. Annual costs to California taxpayers averaged $228 million between 2009 and 2014.
  • Seventy-five percent of contracted janitors were born outside of the United States; Latinos make up 82 percent of the contracted janitorial workforce compared to 37 percent of the overall workforce. Meanwhile, black security guards account for 23 percent of contracted employees in that field, but just 6 percent of the overall workforce.
  • Women hold 45 percent of the janitorial jobs; women janitors are at risk of sexual harassment and violence in what are often isolated workplaces.

Responsible contractors do exist in the industry, the researchers say. Unionization of these contractor firms has grown over the last 30 years in California. These contractors face pressure from unscrupulous operators who skirt labor laws, pay only the minimum wage and offer no benefits, according to the researchers, who contend the problems for property service workers will only get worse unless clients limit their competitive contract bids to firms that pay a fair wage and provide basic benefits.

Authors of the report, which was funded in part by a grant from the California Wellness Foundation, include postdoctoral fellow Sara Hinkley, senior researcher Annette Bernhardt and research data analyst Sarah Thomason.


  • “Rape on the Night Shift,” a PBS Frontline report on the dangers of sexual assault and harassment facing women janitors. The report was a combined effort by Frontline, UC Berkeley’s Investigative Reporting Program, Univision, KQED, and Reveal from the Center for Investigative Reporting.
  • More publications from the Labor Center on minimum wage issues can be found online.