Contingent Work Essay

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In the United States controversy over contingent work—called precarious work or atypical work in other industrialized countries—has focused on definitions and numbers. Coined in the mid-1980s by economist Audrey Freeman, the term contingent work connotes instability in employment. As originally used, contingency suggests an employment relationship that depends on an employer’s ongoing need for an employee’s services. Applied broadly, however, contingent work has been equated with a range of nonstandard work arrangements, among them temporary, contract, leased, and part-time employment. All are notably different from the standard, regular fulltime, year-round job with benefits as part of compensation and the expectation of an ongoing relationship with a single employer.

Much contingent work is far from new. Rather, the workforce has long encompassed work arrangements that are in some way nonstandard. Among these arrangements are on-call work, day labor, seasonal employment, and migrant work, all of which involve intermittent episodes of paid employment and much mobility from one employer to the next. The more recent identification of contingent work as a social problem stems from the perception that many of these forms of employment are expanding, affecting new groups of workers and new sectors of the economy and, therefore, creating greater inequality and new social divisions.

Estimates as Evidence of a Problem

Estimates of the size and scope of the contingent workforce reflect a controversy over the definition of contingent employment. In 1995, the U.S. Census Bureau began collecting data on specific work arrangements, including expected duration of employment and related conditions of work such as earnings, benefits, and union membership. Data were collected several more times in alternating years. Yet analyses of the data have yielded widely divergent counts. Applying a series of narrow definitions, which excluded independent contractors and workers whose arrangements had lasted more than 1 year, researchers at the Bureau of Labor Statistics first estimated that contingent workers comprised 2.2 to 4.9 percent of the total workforce. Using the same data, however, another team of researchers applied a different definition—including most nonstandard work arrangements, regardless of duration—and determined, in contrast, that 29.4 percent of the workforce was in some way contingent.

The debate over numbers and definitions represents different views about the significance of contingent work and, in turn, whether these work arrangements are indeed a social problem. Analysts who apply a narrow definition—and imply little problem—suggest that nonstandard work arrangements provide expanded opportunities for certain segments of the workforce. They focus on workers’ social characteristics and identify women, younger workers, and older workers near retirement as those most likely to choose contingent status. Analysts who equate contingent work with a broad range of nonstandard arrangements, in contrast, see evidence of worker subordination and limited opportunity. Comparing the characteristics of standard and nonstandard employment, they identify lower compensation, fewer employment benefits, and lower levels of union membership among contingent workers. Noting that these workers are disproportionately women and racial minorities, they further see contingent status as perpetuating economic inequality and social marginality.

Researchers concerned with inequities in employment, therefore, more often characterize nonstandard, contingent work as “substandard” and equate contingent status with a proliferation of poor-quality jobs. Many further relate contingent work to restructuring across industries, occupations, and sectors of the economy. With employment increasingly unstable and workers insecure, they note, more jobs are temporary— many mediated and controlled by staffing agencies— and a great many entail greater uncertainty, few formal rights, little legal protection, and greater individual responsibility for finding ongoing employment. With these concerns at the forefront, analysts and advocates who see contingent work as a social problem equate it broadly with a shifting of risk from employers to employees and from institutions to individuals. Workers assume greater risk, they argue, because the standard job, which once provided security for a large segment of the workforce, has become increasingly unstable or unavailable to more and more workers.

Framing the Problem

Determining what counts—and who should be counted—depends, in large measure, on framing the problem that contingency creates. Most analysts, advocates, and policymakers point to deepening divisions between social groups. Some have focused on the proliferation of triangular employment relations, in which workers are hired through staffing agencies or contracting companies, as a source of increased control and subordination for some workers. Many identify the flexibility associated with some forms of contingent work as an advantage principally to employers who seek to adjust the size of a workforce as needed. Contingent status, these assertions conclude, leaves large numbers of workers vulnerable and insecure.

Although they continue to disagree about definitions and numbers—and hence about whether contingent work is indeed a problem—most researchers do agree about two key points. One is that that employment in general is undergoing major change, so that the standard job has increasingly eroded as an employment norm. The other is that the size of the contingent workforce, however defined, did not change significantly over the course of an economic cycle, from the boom of the late 1990s through the recession that followed. The contingent workforce thus appears to comprise a stable segment of overall employment. Those analysts and advocates seeking to frame a social problem, therefore, see several main trends associated with contingent work arrangements.

Cost Cutting and Inequality

Analysts agree that contingent work often comes with lower wages, so that employers can cut costs by replacing standard jobs with nonstandard work, sometimes by laying off “regular” employees and replacing them with contingent workers. The result, overall, leads to lower living standards and rising inequality between rich and poor. Good jobs—that is, those that provide living wages and employer-sponsored benefits—are thus harder to find. More people are working for less or are working several jobs.

Contingent work may, therefore, trap workers in low-wage jobs that provide few opportunities for advancement over time.

Legal Loopholes: Gaps in Labor and Employment Law

Many analysts also point to legal loopholes associated with contingent work, arguing that legal rights and guarantees fail to protect many contingent workers. The reasons for these exclusions depend on the specific work arrangement. Most statutes explicitly exclude some workers, especially those classified as independent contractors. Other legal rights become hard to access when workers are employed through a staffing agency, which typically claims legal status as the worker’s employer. When staffing agencies divide legal liability with their client firms, workers may find that neither the agency nor its client assumes responsibility under the law.

Disparate Impact on Women and Minorities

Related to a concern over legal rights is evidence of a disparate impact on women and racial minorities. Many contingent workers are employed in temporary or part-time arrangements, which in many cases earn them proportionately less than their counterparts with comparable standard jobs. In some settings, therefore, nonstandard, contingent work may be a pretext for sex or race discrimination, which would otherwise be illegal. Workers who seek flexibility to meet personal or family needs, this reasoning suggests, should not be forced to trade part-time or part-year schedules for equal income and opportunity.

Threat to Competitiveness

A more general concern associated with contingent work is an overall threat to the national economy. Short-term employment, some analysts argue, leads to limited loyalty and lower productivity. Temporary work also rationalizes lower employer investment in the workforce, with limited on-the-job training. The eventual result may, therefore, be an overall lack of skilled labor or the shifting of training costs to the public sector. In a global economy, these analysts suggest, the erosion of workforce skills may mean a falling standard of living in certain countries or regions, as employers can increasingly seek skilled labor in many parts of the world.

Bibliography:

  1. Barker, Kathleen and Kathleen Christensen, eds. 1998. Contingent Work: Employment Relations in Transition. Ithaca, NY: ILR/Cornell University Press.
  2. General Accounting Office. 2000. Contingent Workers: Incomes and Benefits Lag behind Those of the Rest of the Workforce. GAO/HEHS-00-76. Washington, DC: U.S. General Accounting Office.
  3. Hipple, Steven F. 2001. “Contingent Work in the Late 1990s.” Monthly Labor Review 124(3):3-27.
  4. Kalleberg, Arne L. 2000. “Nonstandard Employment Relations: Part-Time, Temporary and Contract Work.” Annual Review of Sociology 26:341-65.
  5. Kalleberg, Arne L., Barbara F. Reskin, and Ken Hudson. 2000. “Bad Jobs in America: Standard and Nonstandard Employment Relations and Job Quality in the United States.” American Sociological Review 65(2):256-78.
  6. Polivka, Anne E. 1996. “Contingent and Alternative Work Arrangements Defined.” Monthly Labor Review 119(10):3-9.

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