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The Contingent Economy: the Growth of the Temporary, Part-time and Subcontracted Workforce.

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The Contingent Economy: The Growth of the Temporary, Part-time and Subcontracted Workforce.

By Richard S. Belous. The changing relationship between workers and their employers has become an important issue in the continuing debate over the quality of jobs that the economy has generated in the 1980's. Some analysts have suggested that the bonds between workers and their employers have weakened to a point that our throwaway society has developed a class of disposable workers. The phrase, the "contingent work force," describe workers with little or no commitment from their employers for continuing employment. The possibility that a large and perhaps growing share of the labor force finds itself in such a predicament has received considerable attention in the press and was even the subject of congressional hearings in the spring of 1988. Richard Belous, who has published several articles about the contingent work force, has now written a longer study of this issue.

Belous asserts that increased competitive pressure during the 1980's has forced corporations to lower labor costs by adopting flexible labor-management strategies, including the use of contingent workers. These workers lack an implicit contract for long-term employment and thus have a limited stake in their firms. Examples of contingent work arrangements used by Belous include part-time and temporary work, as well as subcontracting. The author believes that contingent employment now represents at least a quarter of the U.S. employment total and accounted for nearly half of the net increase in employment during the 1980's.

Belous describes a number of benefits that can result from contingent work arrangements. For example, employers may be able to respond more readily to market conditions or to hedge on risky new business ventures. The arrangements may benefit workers by offering alternative work schedules to persons with family or other nonwork responsibilities. There are, of course, drawbacks to contingent arrangements. Employers may find contingent workers difficult to motivate and supervise. And, workers in contingent jobs typically receive low pay, few benefits, and, by definition, little job security.

The growth of the contingent work force presents several challenges to society. Key among these is providing health insurance and other benefits to workers who do not receive them through their employers. Another could be to compensate for a decline in employer-sponsored training, because firms have little incentive to train workers whom they employ for only a short time.

Belous deserves credit for addressing so many aspects of this important issue in a single volume and for providing information from an interesting source--50 interviews that he conducted with human resource executives. Readers unacquainted with the concept of the contingent work force will find all of the major issues touched on in the book. They may wonder, however, about the range of workers that the author defines as contingent. For example, he considers all subcontracting work to be contingent employment. In some instances, such as independent truck driving and free-lancing for newspapers, such a classification seems intuitively appropriate. Much subcontracting, however, does not fit the stereotype of contingent work. The author, for example, describes a company that he identifies as GR, which has 120,000 employees working out of 3,500 locations and annual revenues of over $4 billion. Because GR is a subcontractor, the author considers all its employees contingent. A reader may question the justification for defining all the workers--even those with fulltime, permanent positions--of such a large and presumably prosperous company as contingent. Similar arguments could be made about defining all part-time workers and, particularly, the self-employed as contingent. It would seem, for example, that this offers the anomalous situation that self-employed individuals would be "contingent," while their full-time employees would not be.

Readers who have been following the discussion of the contingent work force may be disappointed at the rehashing of some items and at some missed opportunities to extend their knowledge on the subject. For example, the author presents an estimate of the contingent work force made by piecing together currently available data about part-time and self-employed workers and employment in the business services and temporary help supply industries. The shortcomings to this approach are readily apparent to any reader knowledgeable about the data used, and the author admits his estimates are subject to both over and undercounting. It is puzzling that so much emphasis is placed on these rather weak estimates.

It is also puzzling that the author did not make better use of his interviews with human resource executives from various industries. These interviews provide some of the most interesting information in the book, including a good examination of the problems and benefits of contingent work arrangements. Yet, on some key issues, no information from these case studies is presented. There is no indication, for example, about how many of these firms offer some benefits to their contingent workers or of the actual cost savings to the firms from the use of these workers. The author does state that companies have surprisingly little information regarding their use of contingent arrangements, so data may have been hard to obtain. However, even the qualitative information the author provides from his interviews is at times disappointing.

In the discussion of the difficulties involved in supervising subcontractors, for example, the author mentions the case of a clothing manufacturer who subcontracts to have its products given an "aged" look. He then poses the questions: How do you supervise subcontracted (contingent) workers who have been hired to "destroy" clothing and how do you establish quality measures for making clothing look old? His only answer is, "The company was able to accomplish this tricky task." An attempt at a response might have provided useful insights into the difficulties in using contingent arrangements. An important service to the reader would have been rendered by tabulating whatever information was obtained from the interviews on the key issues. Also, some explanation of how the firms interviewed were selected and how the interviews were conducted would have been useful.

The considerable attention given to the evolving relationship between firms and their workers is likely to continue. Readers just beginning to explore this topic will find Belous' book to be a useful overview of the subject. The problems with the author's definition and estimates of contingent employment, however, suggest that much more research is needed in order to better understand the magnitude and effects of contingent work.

THOMAS J. NARDONE Division of Labor Force Statistics Bureau of Labor Statistics
COPYRIGHT 1990 U.S. Bureau of Labor Statistics
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Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Author:Nardone, Thomas J.
Publication:Monthly Labor Review
Article Type:Book Review
Date:Mar 1, 1990
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