Contingent and Alternative Work Arrangements, Defined

By Plovika, Anne E.; Stewart, Jay | Monthly Labor Review, October 1996 | Go to article overview

Contingent and Alternative Work Arrangements, Defined


Plovika, Anne E., Stewart, Jay, Monthly Labor Review


Contingent workers have no explicit or implicit contract for a long-term employment arrangement; depending on how measured, there were as many as 6 million contingent workers in February 1995

Has the era of lifetime jobs in the United States vanished and, in its stead, a "just-in-time" age of "disposable" workers appeared? Even though the majority of studies have found no change in workers, overall job tenure, reports of corporate downsizing, production streamlining, and increasing use of temporary workers have caused many to question employers' commitment to long term, stable employment relationships.(1) There also is a growing sense that employers, in their attempts to reduce costs, have increased their use of employment intermediaries such as temporary help services and contract companies and are relying more on alternative staffing arrangements such as on-call workers and independent contractors.

This article discusses the definitions of contingent workers and alternative work arrangements used by the Bureau of Labor Statistics to analyze data from a special supplement to the Current Population Survey (CPS), and presents aggregate estimates of the number of workers in each group thus identified. This analysis is supplemented with data on workers in alternative employment arrangements from the 1994 National Longitudinal Survey of Youth (NLSY). The article concludes with a discussion of the overlap between contingent workers and workers in alternative arrangements.

Subsequent articles in this issue use the CPS data to develop profiles of contingent workers and workers in alternative arrangements, examine the wages and nonwage benefits these workers receive, and explore contingent and alternative workers, preferences for and transitions into their current arrangements.(2) An article using NLSY data to examine changes in wages and hours for those who switched jobs, and the influence of life events, such as the birth of a child, on the likelihood of later working in a full-time, part-time, or alternative employment arrangement is also included in this issue.

Defining contingent work

The term "contingent work" was first coined by Audrey Freedman at a 1985 conference on employment security to describe a management technique of employing workers only when there was an immediate and direct demand for their services.(3) Within a few years of its initial usage, however, the term came to be applied to a wide range of employment practices including part-time work, temporary help service employment, employee leasing, self-employment, contracting out, employment in the business services sector, and home-based work. In fact, to some, virtually any work arrangement that might differ from the commonly perceived norm of a full-time wage and salary job would fall under the rubric of contingent work. Although these employment practices are interesting to study in their own right, referring to them as contingent work causes many workers to be misclassified and many analysts to be confused about what exactly is being described or studied.

For instance, while working part time certainly is different from working 40 hours a week from nine to five, being part time does not in of itself denote a contingent employment relationship. In fact, in January 1991, half of all part-time workers aged 25 and older had been with their employer at least 3.3 years and, in February 1995, the mean years of job tenure for part-time workers 25 and older was 6.8 years. Also, according to the February 1995 supplement, 65.8 percent of workers in the business services industry were full-time wage and salary employees. On the other hand, some workers who are clearly temporary, such as those who are directly hired to meet an increase in demand during holidays, would be missed by an analysis confined to employment in the temporary help supply industry.

To return the focus to the transitory nature of the employment relationship and to identify a common underlying characteristic with which to classify workers, BLS in 1989 developed the following conceptual definition of contingent work: "Contingent work is any job in which an individual does not have an explicit or implicit contract for long-term employment. …

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