I got into a discussion at the office about how workers are accounted for in industries with heavy subcontractor usage. For example, for large projects in the construction industry, general contractors hire out the vast majority of the work to subcontractors that perform the actual labor under the supervision of the general contractor. The labor produced in this case would typically be defined as indirect jobs, if I'm not mistaken. However, we weren't sure if this was actually the case. If so, shouldn't we expect that the multipliers in the construction sectors would skew much lower for direct employment and astronomically higher for indirect employment relative to the average?
The same question applies to firms in other industries that use a large proportion of subcontractors, like real estate brokers at a large brokerage firm or drivers at a ride-share operation.
Please sign in to leave a comment.