(Warning: this post contains personal opinions and analysis, some of which might be deemed political.)

There are really two classes of 'contract work' in the US.

The first class is what I'd call skilled specialists. These are your independent marketing consultants, security experts, developers, designers, copywriters, etc. These folks are usually, but not always, fairly experienced. They take up contracting or consulting as a career choice, and while they have to hustle to stay above water, they accept the hustle as the price of freedom from a corporate life. Often they work remotely. If they're strong and well-networked, they have some leeway in negotiating fees and terms for their services. The catch is that there are very few availabilities on the market for their services at any given time, and most firms don't appropriately value those services. As such, skilled specialists thrive or stumble on the strength of their reputations and rolodexes. Many of them have served for years in the corporate world, or in high level academia. They may have the ability to reeenter corporate America at will, e.g., for a client who really wants to bring them in house.

The second class is what I'd call no-choice contractors. These are most often (but not always) younger workers, whom a company will hire for short term jobs, and then spit back out whenever it's done with them. Many of these workers are placed by temp agencies, or respond to open positions for fixed term jobs, and would probably take full time jobs if the jobs were available to them. This category includes seasonal hires, unskilled laborers, and skilled laborers placed at companies on short-term assignments with the vague (and usually fruitless) hope of ascending to full-time status.

Skilled specialists are a much smaller pool, on the whole, than no-choice contractors. And many skilled specialists are but one wrong decision, or bad run of luck, away from slipping into the no-choice pool.

If you're unfamiliar with US corporate culture, the best way to understand my distinction is to first realize that labor lost the war with capital here about 30-odd years ago. During the Reagan era, labor rights one might take for granted in Europe were effectively positioned here as socialistic, and thus cancerous to the 'competitiveness' (read: profit margins) of the firm. Wall Street and hedge funds, along with prevailing MBA management culture, have convinced us that the flexibility afforded to big firms by contracting out their jobs is necessarily a good thing. It allows them to be more nimble, and to operate with a higher degree of tactical freedom from quarter to quarter, or from year to year. More important, if not all important, is that a contract labor force is better in the short run for returning shareholder value.

This line of reasoning is very attractive, but almost too attractive. What we have now is a system, and a culture, that treats more and more jobs as holes to be filled, and which treats individuals not as prospects to be groomed, but as cogs to be worked hard and replaced when worn out. We have also traded strategic thinking for tactical thinking, and we no longer understand the difference. But that's a rant for another time, perhaps. :)