Low-Income and Low-Skilled Workers Involvement in Nonstandard Employment. How did alternative work arrangements develop?

10/01/2001

Although the terms contingent work and alternative work arrangements are relatively recent,(10) similar arrangements have existed for many decades or longer. The concept of temporary help services and workers dates to the late 1920s, and major temporary service firms began to operate shortly after World War II. Two of the largest temporary help services firms that still exist today--Manpower, Inc. and Kelly Girl, Inc.--were started in the late 1940s.(11) Manpower, Inc (established in 1948) is the largest temporary help services firm and is also the largest private employer in the country. With $11.5 billion in sales, Manpower employed 2.1 million employees worldwide in 1999.(12)

The literature suggests that firms have responded to market stimuli on both the demand and supply side. On the demand side, firms developed alternative work arrangements because technological advances and the consequent job specialization made it possible for firms to hire employees for specialized tasks rather than relying on employees with broad, generalized job descriptions. This had the additional advantage of allowing firms both to respond to the needs of consumers by expanding or contracting the size of the workforce and to change the mix of skills of employees. On the supply side, the increased number of women and young people in the workforce has increased the total number of workers in the labor force.(13) More total workers in the labor force results in more workers being available for flexible employment.

The literature also suggests that the development of alternative work arrangements has led to increased government regulation through labor law.(14) The past three decades have seen substantial changes to the common law doctrine "employment at will" which held that employers and employees have unlimited discretion to terminate the employment relationship at any time for any reason unless a contract exists stating otherwise. By 1995, 46 state courts limited employers' discretion to terminate workers, thus opening employers up to potentially costly litigation. The effect of state courts' changes to the employment-at-will doctrine explains up to 20 percent of the growth in the temporary help services industry, accounting for 336,000 to 494,000 additional workers daily in 1999.(15) It is possible that the legislative environment will change as a result of an August 2000 legislative decision by the National Labor Relations Board (NLRB) that expands collective bargaining rights for temporary help services employees. Although the impact of NLRB's ruling will not be known for some time, labor unions are already beginning to move to include agency temporaries in their membership.(16)