Contingent Work

Thinking About A Third Category Of Work In The Trump Years

Our guest author today is Benjamin Sachs, the Kestnbaum Professor of Labor and Industry at Harvard Law School. This post, originally published at OnLabor, is part of a series of posts by speakers at our 2016 conference, "The Challenge of Precarious Labor," videos of which can be found here.

During the last few years of the Obama Presidency, we saw a productive debate over the question of whether changes in the organization of work called for a new legal categorization of workers. In particular, the question was whether we need a third category, intermediate between “employee” and “independent contractor,” to capture the kinds of work arrangements typified by gig economy firms like Uber. Seth Harris and Alan Krueger, in a leading example, called for the creation of a legal category they named “independent worker,” which would grant some – but not all – protections of employment law to workers engaged in these types of work relationships.

There were several primary points of contention in the debate. One was whether such a third category actually was necessary, or whether the existing categories of employee and independent contractor were flexible and capacious enough to capture the new work relationships. Harris and Krueger took one position on this question, I took another.

A second question was whether a third category would result in ‘leveling up’ or ‘leveling down.’ One hypothesis was that if we created a new category – independent worker or something similar – workers previously classified as independent contractors would be shifted up (as it were) into the new category and thus granted expanded protections relative to what they enjoyed as contractors. The other hypothesis, the more pessimistic one, was that workers previously classified as employees would be shifted down into the new category and thus offered fewer protections relative to what they enjoyed as employees.

Build A Precariat Strategy

Our guest author today is Guy Standing, a professorial research associate at the School of Oriental and African Studies, University of London, and co-founder of BIEN, the Basic Income Earth Network. This post is part of a series of posts by speakers at our 2016 conference, "The Challenge of Precarious Labor," videos of which can be found here.

All forward marches towards more freedom and equality are led by and for the emerging mass class, not by and for yesterday’s. Today, the political left in America and Europe is in disarray because they have not taken heed of that historical lesson. Trump is one nightmarish outcome of that failure.

Today’s mass class is the precariat, not the old industrial proletariat. It is scarcely news to say we are in the eye of the storm of the Global Transformation, the painful construction of a global market system. The crisis, analogous to the crisis moment of the Great Transformation that preceded it, is epitomised by the aggressive populism of Trump, playing on the fears, deprivations and insecurities that had been allowed to grow in the preceding three decades.

But the left needs to step back from entering the vortex of the storm Trump is generating, to reflect on a strategic response, to build a new vision of a Good Society that responds to the insecurities and aspirations of the precariat.

Contingent Faculty At U.S. Colleges And Universities

In a previous post, we discussed the prevalence of and trends in alternative employment arrangements, sometimes called “contingent work,” in the U.S. labor market. Contingent work is jobs with employment arrangements other than the “traditional” full-time model, including workers with temporary contracts, independent contractors, day laborers, and part-time employees.

Depending on how one defines this group of workers, who are a diverse group but tend to enjoy less job stability and lower compensation, they comprise anywhere between 10 and 40 percent of the U.S. workforce, and this share increased moderately between 2000 and 2010. Of course, how many contingents there are, and how this has changed over time, varies quite drastically by industry, as well as by occupation. For example, in 1990, around 28 percent of staffing services employees (sometimes called “temps”) worked in blue collar positions, while 42 percent had office jobs. By 2009, these proportions had reversed, with 41 percent of temps in blue collar jobs and 23 percent doing office work. This is a pretty striking change.

Another industry/occupation in which there has been significant short term change in the contingent work share is among faculty and instructors in higher education institutions.

Perceived Job Security Among Full Time U.S. Workers

In a previous post, we discussed some recent data on contingent work or alternative employment relationships – those that are different from standard full time jobs, including temporary help, day labor, independent contracting, and part time jobs. The prevalence of and trends in contingent work vary widely depending on which types of arrangements one includes in the definition, but most of them are characterized by less security (and inferior wages and benefits) relative to “traditional” full time employment.

The rise of contingent work is often presented as a sign of deteriorating conditions for workers (see the post mentioned above for more discussion of this claim). Needless to say, however, unemployment insecurity characterizes many jobs with "traditional" arrangements -- sometimes called precarious work -- which of course implies that contingent work is an incomplete conceptualization of the lack of stability that is its core feature.

One interesting way to examine job security is in terms of workers’ views of their own employment situations. In other words, how many workers perceive their jobs as insecure, and how has this changed over time? Perceived job security not only serves as a highly incomplete and imperfect indicator of “real” job security, but it also affects several meaningful non-employment outcomes related to well being, including health (e.g., Burgard et al. 2009). We might take a very quick look at perceived job security using data from the General Social Survey (GSS) between 1977 and 2014.

Contingent Work In The U.S. Labor Market

For the past 20 or so years, it is fairly common to hear that the U.S. workforce is an increasingly precarious workforce – that is, made up of jobs with non-standard employment arrangements, such as temp jobs, on call work, and independent contracting.

Because these types of employment arrangements, often called “contingent work,” tend to offer less stability, lower wages, and less opportunities for advancement, compared with “standard” full-time jobs, the growth of the contingent workforce is often portrayed as a cause and/or signal of the erosion of workers’ rights and the decline of the middle class in the U.S. Others see it differently, however, and argue that contingent work offers the flexibility desired by employers and employees alike, and that flexible jobs allow faster and more efficient “matching” of workers with positions, thus boosting productivity. This debate, of course, centers largely around empirical questions, and the body of research on contingent work has been building for a few decades now (see Kalleberg 2000; Connelly and Gallagher 2004). Yet not all labor force surveys are designed to capture the full set of nuances of workers’ employment arrangements. Starting in the mid 1990s, the Bureau of Labor Statistics (BLS) had the good sense to collect data on this topic, in the form of the Contingent Worker Supplement (CWS) to the Current Population Survey (CPS). The CWS was administered five times between 1995 and 2005, and provided valuable data on these “nonstandard” employment relations.

The CWS, however, has not been conducted since 2005, substantially decreasing the high quality information available on contingent work at a particularly important time, given that the Great Recession began shortly thereafter. The U.S. Government Accountability Office (GAO) made a laudable attempt to fill this hole with an April 2015 report, which uses several data sources to provide an important snapshot on the prevalence of and trends in contingent work in the U.S. (the data go up to 2010). There are a few key takeaways from this report, some of which are long established.