"Nobody Is Safe."

By Janice Castro and Robert Reich

Secretary of Labor Robert Reich has written extensively on the dilemma of the American worker in a global economy. TIME associate editor Janice Castro recently talked to him about the trend toward a contingent, or temporary, labor force.

Q. A lot of people were heartened by the employment figures released this month because so many new jobs were being created. But most of those jobs were part-time positions.

A. Yes, 90% of the new jobs we created in February were involuntary part-time jobs. These were people who would rather be full-time workers.

Q. One-third of all American workers now have part-time, temporary or contract jobs, some sort of contingent work with no job security and usually no benefits. Many of them had better jobs until recently. They say they are suffering incredible stress.

A. Oh, it's enormous stress. The anxiety level is very high, regardless of the kind of job you hold. Nobody is safe.

Q. Companies now say they want to identify their basic, core function and their core workers, and everything else can be done by peripheral workers, part-time people or subcontractors. Isn't this an extreme buyer's market for labor?

A. I think there are reasons for pause. We have built up in this country since the 1930s a system of employment relationships, guaranteed by law and guided by business practices that have become norms. The state courts have essentially codified entire areas of workplace law having to do with everything from unjust dismissals through areas of labor-management ) relationships such as family and medical leave, which many of the states pioneered before the federal legislation was passed. Many people think this system needs fundamental rethinking.

Q. We have developed a two-tier work force. The contingent workers get a different package of pay and benefits or no benefits at all.

A. Yup. And that is definitely the trend. The first step, in the mid-'80s, was to reduce some of the benefits packages for the lower-tier workers, and that continues. The next step was to fire middle-level management. The third step was to reduce benefits packages across the board for all employees. And now we're at the fourth step, which is to do much more business by contract, whether it is with contingent workers and part-time workers or by contracting out.

Q. In other words, the fourth step is to eliminate the benefits entirely.

A. The contingent work force is outside the system of worker-management relationships and expectations we've created over the years. Larger and larger numbers of Americans are working far longer hours and often at several jobs. The nation faces a dilemma and a challenge. Does this mean we should begin to dismantle that system of protections? Is it simply too expensive for employers?

Q. What impact is this change having on motivation? Creativity? Commitment to goals? How can people work well when they are being told that they do not matter, that they can easily be replaced?

A. Unless people feel that they will be valued over the long term, they may be more reluctant to go the extra mile, to think a little harder, to contribute. In the same way, if the employer feels this is not a long-term relationship, the employer may be more reluctant to invest in on-the-job training of that worker. There are companies that traditionally were very, very careful about laying off workers because they were so concerned about their corporate culture. Now they just fire people, sometimes with very little notice.

Q. Employers say they believe in empowerment. They're talking about pushing the information down to the shop floor, about letting the ideas and the creativity bubble up. But it seems that all these contingent workers are being crippled, not empowered.

A. What we're seeing here is two trends on a collision course. One trend is empowerment, in which companies are revitalizing the core, strengthening relationships with workers. But the countertrend is the move toward contingent work, where there is always a question mark hanging over the relationship as to whether it will continue in the future. You can't do both.