The Hedgehog Review: Vol. 18 No. 1 (Spring 2016)
Temps, Consultants, and the Rise of the Precarious Economy
In 1967, the celebrated economist and intellectual John Kenneth Galbraith argued in his best-selling book The New Industrial State that “we have an economic system which, whatever its formal ideological billing, is in substantial part a planned economy.”1 Though postwar American politicians juxtaposed US free markets to the centrally planned economies of the Soviet bloc, Galbraith recognized that the two were more similar than one might have thought. The private planning of corporations, whose budgets were sometimes bigger than those of governments, defined postwar American capitalism, not markets.2 Markets meant uncertainty, and postwar corporate planners eschewed risk above all else.3
After the chaos of depression and war, corporate planners had worked in conjunction with federal policymakers to make a world that promoted stability. None of the top 100 postwar corporations had failed to earn a profit.4 This profitability was not an accident. Nor was it the result of seizing every lucrative prospect. Rather, it had come from minimizing risk in favor of long-term certainty.
This postwar economy had allowed employees and employers alike to plan for the future, assuring them steady wages and steady profits. Big business had to be big to contain all the functions it would not entrust to the market. Through their own five-year plans, Galbraith argued, corporations “minimize[d] or [got] rid of market influences.”5 This American planned economy—which had appeared to be the natural future of capitalism in 1967—began to fall apart only two years later, in 1969, nearly twenty years before the fall of the Soviet Union.
The collapse of this postwar economy came from the overreach of its new corporate form—the conglomerate—whose rise was legitimated by the belief in managerial planning. But its essential moral underpinnings—stability for investment and, especially, stability for work—took more of an effort to dislodge. Yet in the 1970s and 1980s, this effort succeeded as corporations began to embrace risk and markets, undoing the stability of the postwar period. By the 1980s, the risk-taking entrepreneur had displaced the safe company man as the ideal employee.
Today, scholars and critics are all abuzz about “precarious” work. Instead of a job for life with General Motors or AT&T, we now have many jobs either in sequence or, increasingly, all at once. Freelancers in the US labor force are estimated to number around fifty-four million, as much as one-third of the work force.6 “Precarious” has become a catchall term that encompasses everything from day labor to temp work to the gig economy, and denotes flexible work that is insecure, temporary, and generally poorly paid. If the worker in this flexible economy is something new, so too is the firm, which, instead of hiring employees, increasingly outsources its labor needs.
Economists especially like to explain this shift to flexible labor in terms of the reduction of “transaction costs” (the costs of finding and hiring someone).7 One classic argument proposes that firms arose only because it was too expensive for individuals to transact every obligation. By that logic, the arrival of the Internet—with sites such as Craigslist and Upwork—easily explains the displacement of stable, firm-based jobs by the gig economy. But that explanation is too easy. The origins of precariousness in the rise of temp agencies and the fall of the postwar conglomerate run much deeper than the advent of digital platforms. The shape of our economy is made possible by technology, but it reflects a choice determined more by beliefs about the corporation than by lower transaction costs. Before they outsourced their labor, firms had to overcome old-fashioned shibboleths, such as secure employment for their work force, and they did so during the 1970s, long before the Internet arrived.
Since 1970, temporary labor has become part of the everyday fabric of work across all segments of society, from the bottom to the top. Temps we call “day laborers” linger outside Home Depot waiting in the early morning hours for a contractor’s truck while wondering if immigration will be sweeping through. Temps called “light industrial workers” assemble electronic components for Dell or move cardboard packages for Amazon. Temps called “management consultants” fly first-class all over the world to advise CEOs on global strategy. Only the CEO, whose pay has skyrocketed relative to that of frontline workers, has remained essential.
Simply adding up the number of employees of temporary agencies does not do justice to the importance of this new kind of work—the number, even today, amounts to only a small percentage of the work force. Consider, however, that by the 1980s that percentage was already greater than the proportion of workers in private-sector unions—a group we consider central to our economy. By 1989 (long before Craigslist), temps were being used in 97 percent of major US firms.8 The vast majority of companies had decided that temporary workers should be part of how they ran their business. Flexibility, not stability, became the new ideal against which all decisions were evaluated. The triumph of this new ideal emerged from a crisis in corporate organization and an opportunity in new computer technology. The intersection of these two events would remake the American corporation and the American workplace.
The Rise of the Costocracy
Manpower was launched in 1948 as a service offering temporary secretarial labor—“secretary” being the designation of nearly 10 percent of all women in paid employment—but it would come to provide temps for nearly every kind of work. Like most innovations, the temp agency emerged from a crisis: in this case, a middle-aged attorney named Elmer Winter who found himself unable to find a secretary to type a “long and exacting brief” for the Supreme Court.9 Winter, who had somehow managed to start a law career in the middle of the Great Depression and then served in the Office of Price Administration during World War II, was by 1948 again in private practice, and he could not type. After calling all the employment agencies (which could provide only permanent staff) and finding no temporary secretaries available, he and his partner, Aaron Scheinfeld, called a “former secretary of ours who had resigned to have her first baby.”10 She came in to type, and the brief was filed. More significantly, Winter and Scheinfeld realized that their need for temporary labor was hardly unique. And so the first temp agency was born.
Manpower’s labor model—according to which the temp worked for Manpower and not for the company—was truly novel. It was not an employment agency but a temporary labor agency. Yet expanding Manpower beyond replacement secretaries proved difficult. The challenge was not the transaction costs of supplying workers, but the fixed ideas of management. Temporary workers of all stripes could be had same-day with the ease of a phone call. If you were an oil company drilling off the coast of Texas, for example, a call to Manpower could secure you “30 engineers, purchasing agents, clerks, and roughnecks.”11 If even obscure skills could be found so easily, why did companies persist in hiring permanent staff?
During the 1958 recession, Manpower attempted to introduce the “controlled overhead plan.”12 It was intended to show firms how to use temps to meet peak demand. The most obvious example was the Christmas shopping rush, although the need for seasonal work also challenged florists at Easter and accountancies at tax time. Larger numbers of staff were needed not just to bring in the harvest but also to perform all kinds of service-sector work. Instead of hiring too many employees, or even part-timers, Winter proposed that firms fill such jobs with temps.
“Planned staffing,” Winter told a room of management executives at a meeting of the American Management Association, would be as transformational to business as “scientific management.” Manpower’s job, he believed, was to teach firms that they should not “do it ourselves.”13 But despite the evident savings, few managers were willing to risk their position on some newfangled work scheme when everything worked fine (as it did in the 1960s). Replacing a secretary for a few days when she got sick or went on vacation was one thing; replacing an entire staff was another. Beliefs, not transaction costs, inhibited flexible work forces.
Winter’s plan had been implemented only haltingly. Here and there, firms adopted his methods, but mostly they did not. He lamented his difficulties in convincing corporate executives to renounce what they saw as a moral compact with their work force (especially the white-collar work force). Convincing corporate America to outsource its work required a discovery of just how useful temps could be, and that discovery would take place only with the emergence of a new kind of work for which firms could not easily supply sufficient labor: data entry. Data entry would prove to be the opening wedge toward a larger world of flexible labor.14
Hiring workers for short-term projects such as data migration could violate corporate policies that guaranteed long-term employment.15 But at the dawn of the computer age, big companies nevertheless needed to switch record systems.16 When “Northwestern Mutual Insurance Company decided to convert its [paper] policyholder record to IBM [punch cards],” it used Manpower labor to carry out the task. To ask the permanent staff to do it would have drained morale and taken “about one year.” To employ workers just for this task, which was an option, “would have conflicted with a long-established policy of employment security.” Instead, the insurance company “lease[d] a crew of experienced key-punch operators to work in the evenings” so that the project could be done faster with more people (who didn’t need training). The office space could be used at night so the permanent work staff would not be disrupted.17 Temps made automation possible not only by running the machines at night but also by providing a feasible way to reconcile corporate employee policies that defended full-time labor with the need for one-time data migration from paper to punch cards.
Northwestern Mutual was not unique. For instance, “a large Milwaukee bank” faced the rising challenge of data entry, but the cost of the machines to enter the data—“Comptometers”—was prohibitive. Instead of hiring more people to work during the day, which would have required more machines, the bank hired “several hundred temporaries [to work] during a short evening shift” doing the data entry on the machines that the permanent staff could not. The hours of expensive overtime became hours of cheaper temporary labor. The temps worked at night, and the bank “got double use out of expensive equipment.”18
Data migrations would not be one-time events. The migration from cursive to bits became an everyday necessity. Yet even as firms realized the ongoing need for data entry, they would continue to rely on large numbers of temps. In the short term, corporate policy might prevent the shift to temps in the name of “employment security,” but such policies could not resist the successful experiences of outsourcing office work. Temps enabled computerization, and Manpower capitalized on the opportunity by offering specialty courses in exactly these skills. Manpower’s “business training center” “specializ[ed] in the principles and techniques of operating data processing and other electronic equipment.” Despite its name, the business training center was more of a data-processing secretarial school than a true business program. Such electronic skills were in desperate demand in the 1960s as even smaller firms embraced the minicomputer.19
Automation had long been the key labor issue for postwar futurists, but they often posited an artificial opposition between machines and people. Arthur Gager in 1952, for instance, the staff director of the National Office Management Association, framed automation as the choice between flexibility and inflexibility, between people and machines. “Machines should be used instead of people whenever possible,” he said.20 Temps would be a kind of employee that would be neither a person (as defined as a worker with privileges) nor a machine. The automated office, even after the first round of data migration, required “human attendants” for the machines, preferably “around the clock.”21 Temporary labor would “be a way to achieve more economical use of the sophisticated electronic machinery that larger offices already are using for accounting, filing, billing, data-control work, etc.”22 As offices migrated their data, a line was drawn between workers who would receive the pay and status of a good job and those who would, literally, toil in the shadows.
As the economic stagnation of the 1970s set in, executives became increasingly receptive to Winter’s idea of using flexible labor to contain costs. In the late 1960s, a management consultancy did a study for Manpower that found that “workers were approximately 55 percent productive.”23 “This means,” Winter said, “that about half of the time the employee was at his or her desk there was a productive result.”24 The rest of the time the worker was getting paid for doing nothing. Whether or not this “55 percent” was true, the rhetorical effect was real enough. As Fortune had noted in 1968, “One of the paradoxical consequences of the private welfare state that unions and management have created to safeguard the permanent worker has been to make his temporary colleague look increasingly attractive.”25 Rather than the “I don’t care what it costs” attitude that ruled the 1960s, Winter believed, a new and ascendant “costocracy” would undo the expansion of the corporate bureaucracy.26
Winter envisioned a new balance in the work force in which temporary labor would play an essential part: “Many companies will work out a personnel program which will encompass 75 percent full-time permanent employees, 15 percent temporaries, and 10 percent part-time workers.”27 By the end of the 1960s, temporary labor had proved its worth as an alternative to the postwar promise of secure, well-paid work. But selling this new workplace arrangement required a thorough re-imagining not only of work but of the corporation itself.
Conglomerators and Consultants
At the end of World War II, a generation of executives, entranced by the logistical programs of the military and then of the seeming success of Keynesian economic policies, refashioned the American corporation along lines of long-term planning, long-term investment, and well-defined hierarchies. Control seemed possible, and, after the tumult of the Great Depression, necessary. The management whiz kids of the postwar period, including Robert McNamara, rose to power on the promise of total knowledge and perfect planning made possible through quantitative analysis and universal principles of management.28 The generalists were expected to be able to move from “government agency” to “large corporation” to “university administration” as a matter of course.29 With an MBA and the ability to conduct computer-driven analysis, these executives would be able to manage nearly any enterprise. Building on the computer’s wartime uses, “the new manager” would use it for “planning, control, and financial and personnel management.”30 This ideal of “total management information systems” was the apotheosis of the modernist ideal—at least in business.31
Faith in managerial genius, in turn, undergirded the rise of a new form of the corporation: the conglomerate. The conglomerate grew in importance during the postwar period, emerging from the defense economy, the rising stock market, and the strict anti-monopoly laws of the period. Neither horizontally nor vertically integrated, the conglomerate corporation was a hodgepodge of different industries, without any overwhelming domination in any particular product line—evading regulators and investing all of those postwar retained earnings. Because conglomerates were big, but not monopolistic, they created both confusion and fear by disrupting traditional American notions of corporate malfeasance. Monopolies had long been how Americans characterized unfree markets. Monopolists were the economic equivalent of monarchs—and anathema to capitalist democracy. But in the 1960s, conglomerates were hailed as the future of capitalist organization. Investors admired the “synergies” made possible by the triumph of these men who claimed they could manage anything.32 Lammot Copeland Sr., president of the Du Pont chemical company, jested that “running a conglomerate is a job for management geniuses, not for ordinary mortals like us at Du Pont.”33 The future belonged to the managers who could run these conglomerates. In only a few years, conglomerators like Charles “Tex” Thornton of Litton Industries and James Ling of LTV had assembled companies that were among the largest in the United States, rewarding shareholders and confounding critics. James Ling, for instance, had needed just a few years to transform his Dallas electrical shop into the conglomerate LTV, at one point the twenty-fifth largest firm in the country.
The best and the brightest flocked to conglomerates to learn their secrets. At the height of the infatuation with them, in 1965, Time magazine reported that it was the “hard-driving Litton management” that boosted the value of Thornton’s acquisitions. Litton was seen as the best place for young executives to learn the most innovative management techniques. By the late 1960s, less than 10 percent of the Fortune 500 corporations remained undiversified. (Standard Oil and US Steel were exceptions.)34
But the conglomerators were revealed, through government investigations in 1968 and 1969, to be little more than accounting flim-flam artists. Although the mystique of their management science may have underpinned the conglomerates’ rising stock prices, it was clever financial dealings—not operational improvements—that enabled their actual growth. While these firms had grown in size, they had not actually grown in profit.
By 1969 these stock market darlings had disappeared, as a suddenly bearish market undid their leveraged financial schemes. Their apparent genius now suspect, the conglomerate innovators had managed to tarnish all of American big business. Denouncing the conglomerate was tantamount to issuing a blanket denunciation of large firms, since more than 90 percent of them had followed the new conglomerate model to some extent. Suddenly, bigness became weakness. In the aftermath, business experts found themselves searching for a new way to think about the corporation, now that the golden idol had been shown to be made of pyrite.
Conveniently, another model of the corporation had been developing during the mid-1960s at a new kind of management consultancy: Boston Consulting Group (BCG). Its founder, Bruce Henderson, like many early consultants, had a background in engineering. He spent the first decades of his career at Westinghouse, where he rose into senior management. Leaving Westinghouse, he spent a few years at Arthur D. Little (a consulting firm), but left to open his own shop in 1963.35 BCG began its life focused on strategy. Strategy consulting—which stressed revenue growth and corporate reorganization rather than cost cutting—was just coming into its own. Henderson realized that firms really needed help from consultants in thinking about how to organize their structure to maximize growth. Apocryphally, when batting around ideas for his new firm in the early days, Henderson suggested that it specialize in “business strategy.” One of the staff objected that that was “too vague.” Henderson, brilliantly, simply replied, “That’s the beauty of it. We’ll define it.”36 Although BCG led the way, other consultancies, including McKinsey & Company, followed suit, shifting their business away from the old cost-cutting time studies to new growth strategy studies, and in the process began to redraw the boundaries of the firm.
In the form of the “BCG Growth Matrix,” the redefinition of the corporation would be an idea that would remake American business. Created in 1968 and first published in 1970 in the form of an essay, “The Product Portfolio,”37 the Growth Matrix redefined basic corporate strategy by combining growth and cash into one easy-to-understand schema. Imagine a 2 x 2 matrix, with growth on the vertical axis from low to high, and cash generation on the horizontal axis, from high to low.38 Where the growth is low and the cash flow is high sits the now-commonplace term “cash cow.” For Henderson, the cash cow was a mature company that had a large share of the market and generated lots of cash, but whose market was not growing.39 Henderson’s key idea was that the cash generated by this “cow” should not be reinvested in the cow itself, but in new business areas experiencing high growth. Henderson’s jargony labels for these two kinds of companies—“stars” (the high-growth, high−cash-creating companies just above the cash cows) and the “problem children” (the high-growth, low−cash-creating companies situated diagonally from the cash cows)—mattered less than the new way of viewing them.
Henderson believed that good management was concerned not just with cash creation in a particular business unit but also with intelligently reinvesting that cash in other business units. Corporate leaders were not managers but investors. For the corporation, Henderson’s view demanded that even profitable units should be divested when their capital could be better employed elsewhere. A diversified conglomerate, from this perspective, could have a distinct advantage over single-purpose companies, one that derived not just from being in different sectors but also from operating concerns in different stages of the business life cycle. Postwar conglomerates had reduced risk, but they had not increased profitability, because postwar CEOs had never conceived of their collections of companies as an investment portfolio. They invested for growth, not returns. When viewed through Henderson’s matrix, the strategic brilliance of many conglomerates’ industrial subsidiaries dimmed. Drawing a 2 x 2 matrix was, nonetheless, easier than reorganizing a conglomerate, which is where BCG and other strategy consultants stepped in.
Corporations reorganized for a variety of reasons, but according to Warren Cannon, McKinsey’s director of staff, the first question that needed to be asked would appear at first glance to be an obvious one: “What business(es) are we in?”40 For many conglomerates, whose interests could span multiple sectors, the answer was not obvious. Luckily, remaking corporations was the bread and butter of the top management consultancies. In 1972, about a third of McKinsey’s $45 million in profits came from reorganizing large corporations.41 The gap between strategy and structure was apparent, and firms turned to consultants for help. In just three years at the end of the 1960s, McKinsey reported that “66 of the nation’s top 100 industrial firms reported major organizational realignments.”42 And the bigger the firm, the more likely it was to be reorganized: “9 of the 10 largest companies, 16 of the top 25, 27 of the top 50,” were in that group of 66. McKinsey alone was responsible for reorganizing 100 firms, on average, per year.43 In other words, the multinational conglomerates that had overreached were the firms most in need of the reorganizing guidance of McKinsey and other consultancies.
As the 1960s became the 1970s, the common corporate panacea, at least according to the leading consultancies, was to restructure the firm so that it was smaller, more flexible, and clearly aligned with products. Before this moment, no one would have thought that smaller firms would be better run than large firms. Large firms had resources, economies of scale, professional managers, and many options. But now big business started to seem weak. “As the dinosaur skeletons in museums remind us,” McKinsey managing director Gilbert Clee wrote in McKinsey Quarterly, “great size has its dangers—the dangers of dulled perceptions, sluggish reflexes, and a fatal loss of rapport with the environment.”44 In this new way of thinking, terms like “small,” “efficient,” and “flexible” began to seem causally interconnected, as if a smaller enterprise always made for a more efficient business, flexibility required a small enterprise, or flexible firms were more efficient. Consultants and business gurus began to imagine not only a change of degree but also of kind. Rather than trim costs, firms considered eliminating costs entirely—shutting down business units and eliminating workers. Consultants reveled in their radicalism, envisioning nothing less than the end of bureaucracy, and possibly even the boundary between the firm and the market.
Perhaps the most influential synthesis of this line of thinking was Alvin Toffler’s best-selling 1970 book Future Shock, which, not coincidentally, won a special award from the McKinsey Foundation. For years, Future Shock was the touchstone for thinking about how America would change in the coming years, and at its center was a vision of a new workplace. The reprinting of one of the book’s chapters, “The Coming Ad-hocracy,” in McKinsey Quarterly highlighted Toffler’s relevance to “top executives.”45 Toffler’s work was not only a bestseller. It was also a synthetic account of the ideas about flexibility that had been circulating since the mid-1960s, though presented with far more panache. Toffler rejected the idea of a future dominated by a faceless bureaucracy: “If the orthodox social critics are correct in predicting a regimented, super-bureaucratized future, we should already be mounting the barricades, punching random holes in our IBM cards, taking every opportunity to wreck the machinery of organization.”46 Yet Toffler observed that no one was doing this, because corporate bureaucracy was, he believed, already collapsing of its own dead weight. In Toffler’s view, there would soon be a liberation into “a new free-form world of kinetic organizations” that he called, in a horrid neologism, “ad-hocracy.”47 The term didn’t catch on, but his vision of the firm did, set in motion by teams of consultants who brought these ideas, and their own way of business, to the core of the firm. While the bureaucracy maintained the line between inside employee and outside contractor, the ad-hocracy would blur those distinctions.
Instead of jobs, there would be projects. Instead of bosses, there would be project managers. Unsurprisingly, this model mimicked the lives of management consultants. In the 1960s, consultants at top firms like Booz, Allen and McKinsey & Company had similar career paths. On average, 17 percent of consultants with an MBA made partner, while 83 percent left their firm within six years.48 Most of the older consultants, those over thirty-five years old, joined major corporations, while the younger consultants struck out in more entrepreneurial directions. The average tenure at consulting firms was about three years. Few consultants could expect to make a career of consulting. Permanent executives might work on a project for years on end, but consultants measured their projects in terms of days or weeks, only rarely in months. Assembling in teams, they received a problem from the chief executive or one of his lieutenants. Solving this problem, whether by rethinking an organizational chart or re-pricing potato chips, was their only task. These groups might have little specific knowledge of a particular client company or its product, but their expertise, it was believed, consisted in a general ability to ask the right questions and come up with the right answers, filtering the meaningful out of the noise of the known. Management consultants sold themselves as first-rate problem solvers with an institutional memory of the “hundreds, or rather, thousands of companies” they had served, and, as the London director of McKinsey told the BBC, they tried “to make that general experience available to our clients.”49 While consultants had organized themselves this way for decades, for the first time these practices were put at the core of everyday corporate operations.
The company man would soon be dead. The absence of permanent hierarchy, Toffler predicted, would reduce employee “loyalty.”50 Worker identity would become what an employee did rather than where he or she did it. Employees were not “company men,” and they had no commitments other than to their career and the current “problem.” This ad-hocracy was remaking not just corporate work but worker identity, fashioning an employee who hopped from project to project instead of making a life in a single corporation. Employees who needed to be kept, who needed be securely held, were those who made decisions in a rapidly changing world—not those that did the same thing, day in, day out. Tasks that remained routine were “such tasks that the computer and automated equipment do far better than men.”51 Computers might not have been able to predict the future, but they could do repetitive work. In this way, the worlds of temps and consultants converged. For more and more executive jobs, consultants—now determining strategy rather than just conducting time studies—acted like high-paid temps.
The boom in consulting fees came from the widespread restructuring in the aftermath of the conglomeration and resurgent globalization of the 1970s.52 Business leaders, who had become accustomed to decades of an unusually stable, US-centric way of doing things, now confronted a turbulent world market they did not understand. Consultants offered answers. No computer could replace a consultant, even as that consultant installed computers, and temps, to replace the permanent staff.
Toward the Precarious Economy
Temporary workers were not, as temp Annette Hopkins wrote to her state representative in 1975, luxury-seeking hausfraus, but “the victims of 12 percent a year inflation and 10 percent unemployment, [for whom] working for temporary agencies is an alternative to unemployment checks and/or subsistence lifestyle.”53 By 1970, as the growth of the male paycheck began to stall, women’s work, even for married women, became less a choice, if it had ever been one. Temporary work was not discretionary, additional income. It was not a flexible alternative to a normal job. Temp work was a job of last resort. Hopkins wrote, “I have been unable to find an entry-level administrative position, and working as a temporary gives me a flexibility in job hunting.” These two facts were intertwined. As more women entered the work force, the number of temp firms likewise increased. Women who wanted a “real job” found that many firms were now relying on temps, especially in growing areas like data entry. Hopkins couldn’t find a permanent job, and she blamed the existence of temporary firms as part of the reason for the lack of secure work. Temps were not a “small lonely band.” In Boston, she wrote, there were more than 100 temporary agencies. Employers had their pick. The flexibility was now one-sided.
While firms had more options, temps did not. “In times of stagflation,” Hopkins wrote, “client-companies find contracting with agencies for temporary workers an attractive alternative to hiring permanent employees.” Just as the agencies advertised, temps required “no costly benefits package, no paid sick time, no paid vacations, not even paid lunch time.” Clients could fire temps at will.
Elmer Winter’s dream had finally begun to become a reality. Manpower had fulfilled his ambitions, and it and its many imitators were beginning to remake American work. For Winter, this transformation created his fortune. He sold his majority stake in Manpower in 1976.54 For the rest of the country, Winter’s dream proved less felicitous.
Organizing flexible workers for collective bargaining purposes proved more challenging than organizing regular workers. Reliant on workplace social cohesion, traditional tactics failed. Temps, as second-class outsiders, were never really part of the “family” of a workplace. Even shift work, in which they might be deployed with other temps, was unsteady. As one temp wrote, “I’ve thought about it some & I don’t see anyway you could organize temps—wouldn’t they just shit list us? & I need the work to live.”55 The automated office, backed up by windowless caverns full of data entry clerks seated before glowing green screens, was only rarely unionized.
“The office of the future looks very much like the factory of the past,” Karen Nussbaum, one of the founders of 9to5 (the most successful of the temp-organizing groups and the inspiration for the 1980 film of the same name) would write in Computerworld in 1982. “There’s nothing at all new about shift work, piece work, which is what pay per line of information is.”56 Yet there was a difference between temping and “the cottage industries.” Between the times of those two forms came the decades when factory work became a path to the middle class. The office had long defined the middle class, but now it had become a path leading back to the working poor. Some temps, of course, were hired into the ranks of permanent employees, but even those felt the pressure of knowing that they could be replaced. The temp agency of the 1970s might have formed a buffer between the workplace “family” and the turbulence of the economy, but it also built a bridge to a new kind of economy, where entire segments of work could be outsourced. Casual laborers could be easily replaced in the early factories, but temp workers were, by design, disposable.
Americans today cannot typically rely on just one job anymore, certainly not over a lifetime, and frequently not even at one time. For some of the new temps, notably the consultants, the work is glamorous and well paid; for others, such as office workers, it is a dead end. Some freelancers might revel in their flexibility, but all wonder and worry about the lack of benefits. The uncertainty of work, not just for office temps but for everyone, is both what is new and what has become normal. Although day laborers, office temps, and management consultants—as well as contract assemblers, Craigslist freelancers, adjunct professors, Uber drivers, Blackwater contractors, and every other kind of worker filing an IRS Form 1099—span the income ranks, they all have one thing in common: They are temporary. 1
- John Kenneth Galbraith, The New Industrial State (Boston, MA: Houghton Mifflin, 1969), 6. Original work published 1967. Citations refer to the Houghton Mifflin edition.
- Ibid., 26.
- Portions of this essay are drawn from Louis Hyman, “Rethinking the Postwar Corporation: Management, Monopolies, and Markets,” in What's Good for Business: Business and American Politics Since World War II, edited by ed. Kim Phillips-Fein and Julian E. Zelizer (New York, NY: Oxford University Press, 2012): 195−211.
- Galbraith, The New Industrial State, 82.
- Ibid., 26.
- According to a joint survey by the Freelancers Union and Upwork, two-thirds of freelancers rely on such work for their primary income. Freelancers Union and Upwork.com, Freelancing in America: 2015, 6, accessed December 30, 2015; https://www.upwork.com/i/freelancinginamerica2015/.
- This line of reasoning began with market theorist Ronald Coase, but his now-famous paper only came to prominence in the 1960s after his later work on the problem of social costs (now called externalities). See Ronald H. Coase, “The Nature of the Firm,” Economica 4, no. 16 (1937): 386−405.
- Lawrence Mishel, Jared Bernstein, and John Schmitt, The State of Working America, 1996–97 (Washington, DC: Economic Policy Institute), 266; http://www.epi.org/publication/books_swa1996_97/.
- Elmer Winter, A Woman’s Guide to Earning A Good Living (New York, NY: Simon and Schuster, 1961), 3.
- “Temporary Hiring Climbs Up The Ladder,” Business Week, July 15, 1961, 17.
- “To Californian stockbrokers on November 12, 1962,” folder 12, box 12, Elmer Winter Papers (EWP), Jewish Museum of Milwaukee, Milwaukee, WI, 9.
- “Remarks before the New York Society of Security Analysts,” November 27, 1962, folder 12, box 12, EWP, 13.
- An earlier version of this plan was called the “Controlled Overhead Plan.” Manpower had been experimenting with this idea as early as 1960. Through the Controlled Overhead Plan, Manpower encouraged firms “to keep their staffs at a level where they can take care of their normal requirements and use Manpower when the peaks or the emergency situations arise.” Quoted in “Remarks before the New York Society of Security Analysts,” January 26, 1961, folder 5, box 12, EWP, 9–10.
- Data migration is a stunningly anachronistic term, but it is what we are talking about.
- Elmer Winter, Cutting Costs through the Effective Use of Temporary and Part-Time Help (Waterford, CT: Prentice Hall, 1965), 6–7.
- Ibid., 4.
- Elmer Winter, Your Future as a Temporary Office Worker (New York, NY: Richard Rosens Press, 1968), 29.
- Manpower, Annual Report, 1961, folder 1, box 11, EWP, 9.
- Arthur Gager, “Determining the Need for Office Machines,” Proceedings of the National Office Management Association, 1952, 27.
- Your Future, 90.
- Your Future, 126.
- “Your Work Force—1976 Style,” folder 7, box 13, EWP, 1.
- Irwin Russ, “For Rent: Secretaries, Salesmen,Physicists and Human Guinea Pigs” Fortune, October 1968, 164.
- “Your Work Force—1976 Style,” folder 7, box 13, EWP, 1.
- “Your Work Force—1976 Style,” folder 7, box 13, EWP, 2.
- Although a critique of knowledge would not become fashionable in the academy until the 1980s, management consultants such as McKinsey & Company associate Ridley Rhind saw the fissures in this meta-narrative in 1968, about the same time as Michel Foucault.
- Gilbert H. Clee, “The New Manager: The Man for All Organizations,” McKinsey Quarterly, Spring 1968, 11.
- Ibid., 8.
- C. Ridley Rhind, “Management Information: The Myth of Total Systems,” McKinsey Quarterly (Summer, 1968), 2–12.
- Harvey Segal, “The Urge to Merge: The Time of the Conglomerates,” New York Times, October 27, 1968, SM32.
- Phillips-Fein and Zelizer, What’s Good for Business, 196.
- Bruce R. Scott, “The Industrial State: Old Myths and New Realities,” Harvard Business Review, March 1973/Summer 1974, 133−48.
- Thomas C. Hayes, “Bruce Henderson, 77, Consultant and Writer on Business Strategy,” New York Times, July 24, 1992; http://www.nytimes.com/1992/07/24/us/bruce-henderson-77-consultant-and-writer-on-business-strategy.html?pagewanted=1.
- “Bruce Henderson,” Boston Consulting Group, accessed December 29, 2015; https://www.bcgperspectives.com/classics/author/bruce_henderson/; See also Chris McKenna, “Stategy Followed Structure: Management Consulting and the Creation of a Market for ‘Strategy,’ 1950–2000,” in S.J. Kahl, B.S. Silverman & M.A. Cusumano, Advances in Strategic Management (Vol 29), (Bingley, United Kingdom: Emerald Group), 153–186.
- “The Product Portfolio” is now available at the BCG website; https://www.bcgperspectives.com/content/Classics/strategy_the_product_portfolio/.
- The curious inversion of the axes has been maintained by writers on management strategy even though it runs counter to how all other graphs are made.
- Bruce Henderson, “The Anatomy of the Cash Cow,” in Perspectives on Strategy from the Boston Consulting Group, ed. Carl Stern and George Stalk (New York, NY: Wiley, 1998), 200.
- Warren Cannon, “Organizational Design: Shaping Structure to Strategy,” McKinsey Quarterly, Summer 1972, 30.
- Figure from “The Consultants Face a Competition Crisis,” Business Week, November 17, 1973, 70; Warren Cannon, “Organizational Design: Shaping Structure to Strategy,” McKinsey Quarterly, Summer 1972, 26.
- D. Ronald Daniel, “Reorganizing for Results,” in The Arts of Top Management: A McKinsey Anthology, ed. Roland Mann (New York, NY: McGraw-Hill, 1971), 66.
- Clee, “The New Manager,” 3.
- Alvin Toffler, “The Coming Ad-hocracy,” McKinsey Quarterly (Summer 1971), 2. Originally published as “Organization: The Coming Ad-hocracy,” in Alvin Toffler, Future Shock (New York, NY: Random House, 1970).
- Ibid., 3.
- Ibid., 7.
- John Miner, “The Management Consulting Firm as a Source of High-Level Managerial Talent,” Academy of Management Journal 16, no. 2 (1973), 253.
- Michael Barratt, “The Change Makers,” McKinsey Quarterly, Spring 1969, 27.
- Toffler, “The Coming Ad-hocracy,” 12.
- Ibid., 10.
- Interview with Vincent O’Reilly, 3151-1.doc, box 36, PriceWaterhouseCoopers Papers, Rare Book and Manuscript Library, Columbia University, New York, NY, 1–15.
- Letter 10.45.28, folder 945, carton 15, 9to5 Papers, Schlesinger Library, Harvard University, Cambridge, MA, 1; names changed to preserve privacy.
- Manpower, Annual Report, 1976, folder 5, box 11, EWP.
- Unnumbered survey document, folder 951, carton 15, 9to5 Papers, Schlesinger Library.
- “9to5 President Raps Office Automation, Says It Deskills, Devalues Office Jobs,” Computerworld, May 3, 1982, 54.
Reprinted from The Hedgehog Review 18.1 (Spring 2016). This essay may not be resold, reprinted, or redistributed for compensation of any kind without prior written permission. Please contact The Hedgehog Review for further details.