"Contingent Work" - Dispelling the Myth

Representative Pat Schroeder has been the most vocal, although virtually the lone, advocate on Capitol Hill for new legislation to deal with what has come to be called "contingent" employment. But the prime vehicle for her advocacy -- her proposed "Part-Time and Temporary Workers Protection Act" which mandates that all employers provide pro rata health and pension benefits for part-time and temporary workers working over 500 hours in a year -- has never even been the subject of a hearing in the eight years since it was first introduced. It seems fair to conclude from this inaction that the majority of her congressional colleagues believe such legislation to be unnecessary.Representative Schroeder argues that the growth in the contingent work force demands a change in federal policy.(1) But her call for new employer mandates is based on misconceptions regarding part-time and temporary growth trends, the role such jobs play in the American economy, and the extent to which individuals working in those jobs are protected under existing labor and employment laws. This article examines some of those misconceptions and explains why new regulations are not only unnecessary but are likely to have a detrimental impact on both businesses and workers.Part-Time, Temporary, and Self-Employment Arrangements Are Neither New nor Growing SignificantlyThe first misconception is that "contingent" work is a new phenomenon. The term "contingent" in connection with employment arrangements is generally attributable to labor economist Audrey Freedman. Freedman coined the term in 1985 as a generic way of describing the wide range of flexible employment relationships available in the labor market that could help American businesses compete more effectively in world markets.(2) However, although Freedman was urging businesses to think new thoughts about labor force flexibility, there was nothing fundamentally new about the part-time, temporary, and self-employment arrangements which she grouped under the term "contingent." Furthermore, those work force segments are extremely diverse in nature(3) and should not be lumped together under a common label when considering whether new laws or policies are necessary.(4)The second misconception regarding part-time, temporary, and self-employment arrangements is that they have expanded dramatically. Viewed separately, the three segments are unremarkable either in terms of their growth or as a proportion of total employment. For example, the number of part-time workers -- who comprise about 65% of the so-called contingent work force, by far the largest segment(5) -- has been a relatively constant share of the American work force over the past ten years.(6) In the past twenty-four years, the number of part-time workers has risen only 3.3%.(7) Representative Schroeder and others say that the real problem is that the proportion of involuntary part-time workers has increased in recent years.(8) But the proportion of all part-time workers, both voluntary and involuntary, historically has fluctuated over time depending on economic cycles. So, for example, the proportion of part-time workers in 1993, 18.8% of all workers, actually was less than in 1982 when it was 20.2%.(9) Similarly, the proportion of involuntary part-time workers in 1993, 5.5% of all workers, was less than the 1982-83 recession high of 6.5%.(10) Thus, according to the Employee Benefit Research Institute, "While the short-run trends remain important to our current economy, the more important question is whether growth of the part-time work force as a percentage of all workers will continue in the long run such that it surpasses the level of the early 1980s.... "(11)A similar picture emerges with regard to the second largest segment -- the "self-employed" -- who make up about 30% of the contingent work force.(12) This segment includes professionals, such as lawyers or doctors, free-lance workers, such as artists or writers, and a wide range of independent business owners. …