When Mark Gillen first went into business for himself as an independent contractor in 1985, he knew his career choice was a tradeoff between the freedom of being his own boss and the certainty of a steady paycheck.
“It’s the old saying, ‘if it’s to be, it’s up to me.’ You control your own environment. You control your pay schedule, your hours and you make it happen. Four weeks ago, I worked 105 hours, but that was my own decision. So, you can create your own atmosphere. As my son’s been growing up, I never missed an athletic event. It’s a good lifestyle,” Gillen said. “I go in, I bid a job, then I go in and build it, and then they pay me.”
Gillen, a Johnstown native, chose his life as an independent contractor after working for his brother’s small business in Illinois as a teenager and UPS as an employee. He earned an associate’s degree in business administration from Fulton- Montgomery Community College and formed his own business, calling it Mark of Excellence.
But now, and for the last several years, he’s watched as a flood of independent contractors have saturated the local market, many of them individuals who once had full-time jobs but can no longer find work.
“Since the stock market crash in 2008, things have been different. What used to be a pool of maybe 100 contractors in Fulton and Montgomery counties, all of a sudden there were 150 contractors in Fulton and Montgomery counties, everybody who could swing a hammer and had a level and a tape measurer became a contractor,” he said.
National statistics show that what Gillen has seen locally is happening throughout the U.S. While the economy has improved since the Great Recession ended five years ago, part-time and “contract” workers are filling many of the new jobs.
Contract workers made up less than half of 1 percent of all U.S. employment in the 1980s but now account for 2.3 percent. Economists predict contract workers will play a larger role in the years ahead.
They are a diverse army of laborers, ranging from janitors, security officers, home-care and food service-workers to computer programmers, freelance photographers and illustrators. Many are involved in manufacturing. Many others are self-employed, working under contracts that lay out specific responsibilities and deadlines.
Labor leaders and many economists worry. Contract workers have less job security and don’t contribute to the economy through spending as much as permanent, full-time workers. Nor do they have the same job protections. Few are union members.
“It is not hugely clear that we’re coming into a temp-worker, contract-worker, contingent-worker nation. But it’s something to keep an eye on,” said Heidi Shierholz, an economist with the labor-oriented Economic Policy Institute. “There’s definitely been an increase in the share of those working part time.”
Part-time and contract jobs in the past tended to rise during recessions and recede during recoveries. But maybe no longer: Part-time workers have accounted for more than 10 percent of U.S. job growth in the years since the recession officially ended in June 2009. Meanwhile, union membership has been sliding steadily since the mid-1980s.
Gillen said the influx of new contract workers is putting pressure on established small businesses that do contract labor like his own.
“Because a lot of people have started doing this, and sometimes the quality isn’t always that great, that really hurt the guys who do it every day because people become gun-shy if they’ve been burnt by people who are fly-by-night contractors, so that means the established contractor has to just do everything he can to pay attention to every little detail so he can maintain his reputation,” he said. “I think a lot of the people who’ve gotten into this are just getting by, but for them it’s better than being on unemployment or having no work. I think they are finding that it’s nice to control their own environment, but I know a lot of guys who started contracting thinking it would be temporarily until the job market recovers, but it never did, and they are having a rough time.”
Businesses often hire contract workers or freelancers because it is less expensive than hiring full-time workers.
“Workers increasingly serve businesses that do not officially ’employ’ the worker – a distinction that hampers organizing, erodes labor standards and dilutes accountability,” said Catherine Ruckelshaus, general counsel for the National Employment Law Project, which advocates on behalf of low-wage workers.
Many business leaders have a different take.
“Some people don’t want to be a full-time employee. They want contract work,” said Bruce Josten, executive vice president of the U.S. Chamber of Commerce. Still, Josten recognizes some of them “are hoping the contract work will ultimately lead them into a full-time position.”
Joe Pazzaglia, owner of the Professional Security and Training Institute at 40-42 W. Main St., Johnstown, said his company provides security guard license training courses and maintains a roster of 35-50 licensed security guard personnel whom he can provide as contract laborers to companies or individuals in need of temporary security personnel. He said the trend toward temporary workers can be beneficial to companies that hire them as well as individuals who want a more flexible lifestyle.
“We’ve got contracts with Target, Best Buy. For the client, it’s a lot cheaper and a lot less headaches. They don’t have to deal with insurance or benefits or any of that. They don’t even have to deal with scheduling,” he said. “We’ve got enough part-time stuff that we can get guys work weekly. One of the perks is that if you’re working for us on a site for a couple of months and it’s just not for you, what we’ll try to do is just try them on a different site. If you’re working at McDonald’s and you quit, you’re out scrambling for a job, while with us, we’ll just move you to a different site.”
A recent Federal Reserve study showed that nearly 7.5 million people who are working part time – contract workers included – would rather have full-time jobs.
Pazzaglia said some of his security contracts do become full-time jobs in instances when companies decide to outsource their security personnel to his company permanently.
Jerry Jasinowski, who served as president of the National Association of Manufacturers for 14 years and later as president of the Manufacturing Institute, said despite criticism leveled against contract workers from some quarters, “I think on balance, they are a positive reflection of the extent to which production has become much more flexible, a reflection of hybrid operations. Some people don’t like it. But that’s neither here nor there. That’s where everybody’s moving.”
Analysts suggest the increase in contract and “temp” jobs will likely accelerate as more baby boomers retire from their full-time jobs.
The online job site CareerBuilder.com, which specializes in “contract placement,” cites research showing that 42 percent of employers intend to hire temporary or contract workers as part of their 2014 staffing strategy – a 14 percent increase over the past five years.
A recent Brookings Institution study labeled the first decade of the 21st century a “Lost Decade” for the labor market. For the first time since World War II, the U.S. economy did not have more payroll jobs at the end of a decade than at the beginning. And the shadow of the December 2007-June 2009 recession still looms over today’s labor market
The Associated Press contributed to this article.