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Daniel Patrick McGregor

mcgregor.daniel@bls.gov

Daniel Patrick McGregor is an economist in the 

Division of Current Employment Statistics, State 

and Area Branch, Office of Employment and 

Unemployment Statistics, U.S. Bureau of Labor 

Statistics.

Shining a light on the shadow

The Shadow Workforce: Perspectives on Contingent Work 

in the United States, Japan, and Europe. Edited by Sandra 

E. Gleason, Kalamazoo, Michigan: W. E. Upjohn Institute 

for Employment Research, 2006, 349 pp., $54 hardcover, 

$22 paperback.

The Shadow Workforce, a collection of essays edited by 

Sandra Gleason, speaks directly to my own labor market 

experiences and those of my peers: young people growing 

up in the 1990s and entering the workforce in the 2000s. 

Published in 2006, this book paints a picture of labor 

markets within the developed economies of the United 

States, Western Europe, and Japan that are shifting 

markedly away from the traditional notion of “employer–

employee,” with its cultural norm of long-term stability. 

These labor markets are shifting toward the increasing use 

of the newly envisioned notion of contingent workers, with 

an emphasis on flexibility and efficiency. It is this vision of 

contingent workers— temporary workers, a “shadow 

workforce”—that permeated our perspectives as we 

graduated from school and entered the labor market. Our 

experiences fit squarely into The Shadow Workforce’s 

analyses of, predictions about, and notions of a changing 

labor market.

I found this book’s academic and largely apolitical language 

to be immediately appealing. The book uses statistical data 

and primary source material to capture trends and analyze 

their possible causes and effects. Sharing a similar 

language and tone throughout, the essays that make up the 

volume give it a cohesive feel. It should be a relatively easy 

and informative read for anyone seeking to understand one 

of the dominant labor market trends of our time.

The primary aim of The Shadow Workforce is to provide an 

analysis of labor market changes in that workforce within the United States through the beginning to middle of the 

first decade of the 21st century. The bulk of the book is contained within three sections. The first defines and 

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characterizes the “nonstandard employment” performed by workers who constitute the shadow workforce of the 

United States. The second analyzes the motivations of employers and the response of unions. The third addresses 

the labor laws and public policy through which the shadow workforce, employers, and unions must all navigate.

In her opening essay, Gleason defines nonstandard employment as the employment of those hired under 

nonstandard arrangements “without a permanent connection to an employer.” She recognizes that the term is 

broad and ambiguous, encompassing a large mix of different arrangements: part-time employment, hiring through 

temporary-help employment agencies; working as a self-employed consultant; leasing, contracting, or 

subcontracting employees from business service firms; multiple jobholding; working as a day laborer; and more. 

She estimates that nonstandard employment may account for up to 30 percent of all employment and is 

constituted mostly by minorities, women, and young people. Gleason predicts that this proportion may increase as 

employers continue to find ways to mitigate labor costs in the face of legally required benefits, as employers also 

continue to seek a buffer for ever-present market changes, and as some workers continue to value flexibility and a 

more equal work–life balance.

The trend toward nonstandard employment has been driven largely by employer demand, argue Douglas J. Miller 

and Jay B. Barney. Employers often can use nonstandard employment arrangements to dictate wages that are 

only 70–80 percent of what employees in standard arrangements would make, and less than half of those in 

nonstandard employment arrangements qualify for any benefits, such as pensions and health insurance, 

compared with employees in standard arrangements. This disparity decreases the direct long-term costs of hiring 

employees. Still, cycling through short-term employees can bring very high transaction costs: time spent 

interviewing and negotiating, resources spent advertising a job opening, training, paperwork, and more. Ultimately, 

evaluating this tradeoff depends on the foresight and information that employers have relative to one another when 

they decide whom to employ and how to employ them.

One of the key messages of the book is that public policy has struggled, and is struggling, to keep up with the 

quickly evolving labor market and the growth of nonstandard employment. As Gleason says, “Each type of 

nonstandard employment exists in its current form because there is either a relative absence of a regulatory 

environment or a regulatory environment that frames its use.” Jeffrey Wenger’s essay speaks directly to this idea, 

claiming that there is a “resounding silence” on the public policy level because the United States lacks a “true 

national labor policy,” preferring instead a system in which federal legislation is implemented by states but 

interpreted by courts. In the most energized essay of the book, Wenger argues that current policies have arisen 

from “the haphazard application of existing policies” designed in the 1930s to regulate the standard employment 

arrangements that were uniform across the labor market at the time. A better approach would have been to 

develop new policies specifically for nonstandard employment.

This slowness to adapt can be seen in labor unions as well. According to M. Catherine Lundy, Karen Roberts, and 

Douglas Becker, nonstandard employment is considered problematic by unions because it “allows employers to 

pass on to workers the economic insecurity associated with changing product markets, new technologies, and the 

business cycle.” Passing this insecurity on to the workers is clearly antithetical to the union goal of protecting 

worker earnings and job stability. Unions have yet to present a unified response. Some seek to exclude employees 

working in nonstandard employment arrangements and attempt to limit the employer’s ability to utilize them. 
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Others work to include such employees and bargain for their benefits, in the hope of eliminating the economic 

advantage that nonstandard employment can bring over standard employment.

Forming an appropriate policy response to the shift toward a larger shadow workforce is difficult because of the 

variety of both employment arrangements and employee characteristics in nonstandard employment. Courtney 

von Hippel and colleagues warn against characterizing nonstandard employment as a monolithic, homogenous 

block of the labor market. For example, only 55.3 percent of workers in nonstandard employment arrangements 

would prefer a standard, traditional arrangement. A sizable proportion of nonstandard employees see their 

arrangement as favorable, citing flexibility, the variety of work experience, and the opportunity to gain an 

assortment of skills. Although, at one time, having worked in a nonstandard arrangement was viewed as 

problematic, it is now often viewed as an advantageous work history.

The Shadow Workforce adds to the literature of labor market analysis in the United States by putting that analysis 

within an international context and by outlining practical avenues toward reform and future research. In this regard, 

Cynthia Ozeki and Akira Wakisaka report that, in Japan, workers in nonstandard arrangements make up a third of 

the labor market and this segment continues to grow, with part-time employees in particular constituting 23 percent 

of all employment. Like the American labor market, the Japanese one includes a sizable minority of employees 

working in nonstandard arrangements. But Ozeki and Wakisaka also point out differences between the American 

and Japanese labor markets. For example, temporary-worker agencies were outlawed in Japan until 1985, in a 

concerted government effort to encourage standard employee arrangements.

In Western Europe, labor regulations seem to curtail labor market flexibility. François Michon points out that the 

labor regulations which define employment contracts often constrain them: nonstandard workers are not easier to 

lay off; it’s just easier to change their hours. The cultural emphasis on standard employment prevents a full range 

of employment flexibility.

Another compelling aspect of The Shadow Workforce is its eye toward the future. Every essay contains a section 

dedicated to outlining further research opportunities and yet unanswered questions. Gleason herself calls both for 

a revision of existing laws in order to expand eligibility standards determining coverage of legally obligated 

employee benefits and for the elimination of gray areas of legal interpretations through clearer definitions and 

better compliance among employers. She proposes further research into how employers make strategic decisions 

regarding the best mix of standard and nonstandard employees, and into determining effective strategies for 

unions and nonprofit organizations to improve the conditions of work and the economic welfare of nonstandard 

workers. Readers of this book can easily find a path forward outlined, as Gleason tries to emphasize a need for 

more academic research and better adaptation of policies for the future.

What makes The Shadow Workforce most valid to me is its applicability to my own life. I can see the change in 

mindset and attitude among employers and employees as nonstandard work becomes increasingly common. 

Some individuals value nonstandard employment arrangements that give them flexibility to travel or tend to their 

families, while others are unable to find jobs with standard work arrangements as they enter the workforce. The 

latter workers take on nonstandard employment arrangements out of necessity, a dichotomy of attitude that 

Gleason and all the contributors to the book correctly describe. Employers who look at my resume have no 

concerns about the number of jobs I have held over my life, but are instead interested in the unique skill set I have 

built by accumulating such a wide variety of experiences. The attitude toward short-term employment and 
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transitory employment arrangements is now common and accepted, a marked difference from the more “lifetimeemployee” attitude of the 1930s.

Gleason sums up this analysis succinctly in the conclusion of the book in a clear and concise statement that “a 

career-long tenure with one employer will no longer be the norm in the future.”