RGS/IBG ECONOMIC GEOGRAPHY

and

Nikolas Theodore

Hiring halls, specializing in the placement of day labourers hired by the hour, have in recent

years been proliferating along major transport arteries in Chicago’s low-income

neighborhoods. This paper examines the phenomenon of temporary working in Chicago from

the perspective of the principal institutional actors in these highly ‘ flexibilized’ or

‘contingent’ labour markets—the ‘temp’ agencies. Particular emphasis is placed on the

labour-market effects of temp-agency strategies, both in respect of patterns of labour

segmentation and in terms of the spatial constitution of complex urban job markets. It is

suggested that temp agencies are actively engaged in both the exploitation and facilitation of

contingent labour-market conditions. In this sense, they are assuming important new roles as

privatized ‘labour-market intermediaries’, with apparently deleterious effects for job security

and social segregation in the lower reaches of urban labour markets. Their strategies can also

be related to the social and geographic restructuring of these job markets, because the growth

and polarization of temp employment has been associated with a ‘hardening’—and indeed

‘stretching’—of extant ethnic, gender, and spatial inequalities.

Key words Contingent labour markets temporary employment labour

segmentation urban economic development Chicago

AUTHORS

Jamie Peck Nikolas Theodore

School of Geography & Center for Urban Economic Development

International Centre for Labour Studies University of Illinois at Chicago

Manchester University Chicago

Manchester M13 9PL Illinois 6067

United Kingdom USA

It’s the Spring of 1999 and the Chicago economy is booming. The city’s unemployment rate

is at a record low (at just 3.6 percent for the Chicago Metropolitan Statistical Area in March

1999, according to official figures) and help wanted signs seem to be everywhere. But when

the Metropolitan Water District of Greater Chicago announced that 30-60 jobs were to

become available in the city’s sewage treatment plants, officials were to find themselves

inundated by some 6,761 jobseekers, who lined up outside Chicago’s Medinah Temple for a

chance of a (dirty, but relatively secure) job paying $15.08 per hour. Many had taken a day

off from their regular jobs to be there, but were disappointed to hear that the jobs would go—

quite literally—to just the lucky few. In order to cope with the excess number of applicants,

district officials decided that they would offer the positions to those individuals whose Social

Security numbers most closely matched the winning draw on the next Illinois State Lottery.

The chosen candidates would have then to pass a physical examination, including tests for

drugs and agility, before being offered a position. They would then have to work for between

six and 12 months on probation before being made ‘permanent’. According to West Side

resident, Willie Fry, ‘This shows how badly we need the work’ ( Chicago Sun-Times, 1 April

1999: 1).

This view of the Chicago labour market is curiously at odds with the official discourse of

regional economic revival, based on strong sales and export growth, improvements in

productivity, and expansive recruitment plans (Federal Reserve Bank of Chicago, 1997). As

the Federal Reserve’s president, Michael Moskow, has remarked, ‘the Rust Belt of old [has]

become an apparently high-performing economy’. If there is a cloud on the business horizon,

it is that continuing labour shortages threaten to choke off Chicago’s new-found

competitiveness, as employers have begun to complain that ‘the region’s growth may become

a hostage to continued worker shortages’ (Bergen, 1997: 1). These complaints are unlikely to

ring true for many of Chicago’s inner-city residents, particularly those from disadvantaged

Latino and African-American communities, who must contend with persistent problems of

under-employment, unemployment, and poverty (Carlson and Theodore, 1995; Theodore,

1995; Wilson, 1996). Indeed, the period following the wave of restructuring and job loss in

the late 1970s and early 1980s, during which Chicago’s ‘high-performance economy’ has

been reconstructed, saw the income gap between whites on the one hand and Latinos and

African-Americans on the other actually widen (Chicago Urban League, 1994). In the face of

an ostensibly booming regional economy, many inner-city residents remain trapped in, or

Part of the explanation for this paradox lies with the geographic restructuring of the Chicago

labour market. The downturn of the early 1980s gutted the fragile jobs base of the city’s inner

neighborhoods. Closures and layoffs had a disproportionate impact on these areas. Some

major employers—such as Stewart Warner, Sunbeam, and Playskool—shifted their

operations overseas in search of cheap and pliant labour, while others headed for the suburbs.

Since 1972, the city of Chicago’s share of metropolitan-area employment has fallen from 56

to just 34 percent in 1996 (authors’ calculations, derived from Illinois Department of

Employment Security, 1998). Approximately 60 percent of recent metropolitan area job

growth has occurred in suburban Cook and DuPage Counties. One consequence of this has

been to fracture the employment networks of many inner-city residents, who now find

themselves trapped in low-income, poorly-serviced neighborhoods which are some

considerable distance from the suburban growth centers (Immergluck, 1996; Theodore, 1997).

With few opportunities to capitalize on work experience and skills, many inner-city residents

have endured long spells of unemployment, turning to poorly-paying jobs such as security

guards and nursing aides when better opportunities could not be found (Wilson, 1996).

Under-employment has become a systemic condition in these neighborhoods. As Katherine

Newman (1999: 62) has observed of a similar situation in New York City, stories of seller’s

markets for labour in the suburbs sounds ‘like news from another planet’ to many inner-city

residents.

Yet in the Chicago case, just as the restructuring process has remade the map of employment

opportunities, so also this has altered labour-market geography created a spur for new

restructuring strategies. While secure, decent-paying jobs may continue to be in short-supply

in the disadvantaged neighborhoods of Chicago, the city’s ‘contingent economy’—based on

flexible, short-time, and temporary employment—has been booming. Indeed, the fastest-growing

industry in the metropolitan economy has been specifically targeting certain low-income

neighborhoods in order to access the one resource they have in abundant supply—

cheap and flexible labour. Temporary help services, or temp agencies, have flooded

Chicago’s inner-city neighborhoods over the past decade, eager to take advantage of their

highly elastic and under-utilized labour pools. In some low-income neighborhoods, the four

or five largest ‘local employers’ are temp agencies, most of which specialize in the placement

of ‘day-labour’ through a network of hiring halls. Here, the absence of ‘regular’ jobs has

rendered local residents dependent on temp employment, and on the vagaries of the

contingent economy. Correspondingly, in locating proximate to these under-employed labour

supplies, temp agencies demonstrate a strong sensitivity to the micro-geography of the urban

labour market. The imperative of securing access to an ‘appropriately contingent’ labour

spatial agglomeration amongst temp agencies, many of which are just across the street from

their competitors. In this case, their locational strategies reflect the fact that they are

competing for labour as well as contracts.

It is not unusual for hiring halls to operate for 24 hours a day, dispatching workers across the

metropolitan area to meet employers’ needs in assembly work, hand-packaging, materials

moving, and other manual-labour assignments in the manufacturing and warehousing sectors.

The physical appearance, geographic location, and business names of these inner-city hiring

halls point unambiguously to their function as traders of minimally-processed labour-power.

They typically occupy run-down store-fronts, often with boarded windows. The interior

décor is spartan and often shabby, with uncarpeted floors and hard benches or plastic seats,

designed for waiting around for job orders to be dispatched through a window to the office in

the back. And typical business names are appropriately literal—Labour World, Ready Men,

Temps Unlimited, World of Temps, Good Workers Inc., Minutemen, Days & Nights, Flash

Employment, Labourama, and, irony surely intended, Labour Power Inc.. Outside the hiring

halls, would-be workers mill around waiting for a job assignment. Such is the elasticity of

labour supply in these neighborhoods, agencies which find themselves short for an order one

day can simply pass out fliers on the street (see Figure 1) in order to generate an expanded

pool of recruits, literally within hours. So, these areas present day-labour contractors with an

ample—and highly plastic—local supply of ‘contingent workers,’ or more precisely, workers

whose social and economic circumstances render them contingent. Business viability for

these agencies turns on their ability efficiently to exploit depressed, inner-city labour pools.

Complementing an earlier paper in which we examined the restructuring of the temp

‘industry’ itself (Peck and Theodore, 1998), this article focuses on the functions of temp

agencies as privatized labour-market intermediaries. In one respect, temp agencies are

simply businesses, and as such are driven to minimize costs and maximize profits just like

any other business, but because the business of temp agencies is processing and supplying

workers, their actions and strategies also have a direct bearing on the way that labour markets

work. In a nutshell, temp agencies have a business interest in stretching the envelope of

labour-market contingency (their ‘market’), so as to open up new business opportunities in the

trade of flexible workers. They must consequently be seen as active institutional agents in the

remaking of labour-market norms and conventions, brokering as they do between under-employed workers on the one hand and would-be employers of contingent labour on the

other, while turning a profit in the process. As Burawoy (1985: 265) has observed, a

consequence of the rise of temp agencies is that ‘the distribution of jobs is clouded in

employment strategies/business practices of temp agencies in Chicago. Reflecting the fact

that defiance of accurate quantitative description is an industry characteristic—given its

overall fluidity and turbulence and given that a certain proportion of agencies are operating at

the edges of, or beyond, the bounds of legality—it is as much through necessity as choice that

the analysis presented here rests primarily on a series of in-depth interviews with managers in

temp agencies. Where feasible, this is augmented with quantitative data on local industry

trends and patterns, though these also provide no more than a partial view of what is a

complex, fast-changing, and to some extent subterranean industry. 1

The next section of the paper we outline the key characteristics of the temp industry, which

has been diversifying in recent years, as well as growing at an unprecedented rate. The shape

of the temp sector in Chicago is also briefly sketched. This is followed by two sections which

draw on interview data with agency managers and hiring-hall supervisors in Chicago, the first

of which considers the basic modus operandi of the temp agency—connecting workers with

job assignments in a flexible and low-cost way, while the second explores some of the

distributional consequences of this for the process of (local) labour segmentation—as patterns

of exclusion and inequality in the labour market are being intensified. The geographical

outcomes of temp agencies strategies are also considered here. The paper is concluded with

some observations on the role of temp-agency and contingent-work strategies in the re-regulation

of urban labour markets.

Temporary employment has become a growth industry in its own right. Contingent working

arrangements are becoming increasingly commonplace in the United States, as the number of

temporaries, part-timers, and contract workers continues to expand, while the temporary help

‘industry’ has experienced explosive growth rates (Moberly, 1987; Belous, 1989; Cappelli et

al, 1997; Barker and Christensen, 1998). Indeed, one of the distinctive features of the US

economy is the extensive scale and scope of the business services sector, a key element of

which comprises a cluster of rapidly-growing ‘labour-processing’ industries, such as head-hunters, recruitment and placement services, labour contractors, and temp agencies (see

Moore, 1965; Carnoy et al, 1997; Christopherson, 1999). This makes possible forms of

employment externalization and flexible labour utilization which would not otherwise have

been feasible, absent a mature ‘infrastructure’ of labour-market intermediaries. Temp

agencies have been key players in the growth of what Abraham (1998) calls ‘market-mediated

work arrangements’ in the US. As Allen and Henry (1995) suggest, this phenomenon may be

part of a generalized trend toward to ‘ formalization’ of contingent work as a quasi-permanent,

institutionalized feature of ‘flexible’ labour markets. Such employment relations, of course,

are not without their contradictions, even for employers (see Davis-Blake and Uzzi, 1993;

Feldman et al, 1994; Cooper, 1995; Nollen and Axel, 1998), one of the structural functions of

the temp sector being to manage the costs and contradictions of workforce contingency, on

behalf of employers (see Nollen and Axel, 1996; Peck and Theodore, 1998).

The US temp industry had its origins in Chicago in the 1920s. But this industry, which many

wrote off as anachronistic and marginal during the decades of Fordist expansion after the

Second World War, has over the last 20 years reasserted itself as one of the most dynamic,

high-growth sectors (see Schodolski, 1996; Cappelli et al, 1997; Kalleberg et al, 1997). Total

temporary employment in the US has grown from virtual insignificance in 1973, when there

were just 250,000 officially recorded temporary workers (or 0.3% of total employment), to 3

million in 1997 (or 2.4% of total employment). Correspondingly, the workforce mobilized by

temporary help agencies, following very strong growth in the 1970s, doubled in size between

1982 and 1989, only to double again between 1989 and 1997 (Gonos, 1998; Mishel et al,

1999). Reflecting the fact that this is an economy of flows, rather than stocks, temporary

vacancies have come to account for a very significant share of new job openings, especially

for low-income workers. Cappelli et al (1997) calculate that one in five of all new jobs

created in the US since 1984 have been ‘temp’ jobs, while in the state of Illinois perhaps as

much as one half of all vacancies in manufacturing at the peak of the economic cycle in 1998

were for temporary workers (Chicago Tribune 15 October 1998: B1). Early indications also

suggest that temporary employment is an important destination for former welfare recipients,

following the federal welfare reform of 1996, and that major agencies like Manpower Inc. are

beginning explicitly to target this new labour pool (see Sharpe and Quintanilla, 1997). In

many low-income neighborhoods, temp ‘jobs’ have become the most important means of

accessing the labour-market, as they have come to dominate local vacancy profiles. Here, the

labour market is the hiring hall.

The temp agency is both an orchestrator and a beneficiary of this explosion in contingent

employment, as ‘the only major institution that has found a way to make money by finding

people jobs’ (Sharpe and Quintanilla, 1997: A1). Manpower, the world’s largest temporary

company the biggest employer in the United States on some counts. By 1996, Manpower was

processing 800,000 W-2s annually, an increase in 43 percent in just four years. According to

the company’s president, Mitchell Fromstein, ‘The U.S. is going from just-in-time

manufacturing to just-in-time employment. The employer tells us, "I want them delivered

exactly when I want them, as many as I need, and when I don’t need them, I don’t want them

here" ... Can I get people to work under these circumstances? Yeah. We’re the ATMs of the

job market’ (quoted in Castro, 1993: 44). But the exceptionally strong corporate growth rates

of national and multinational agencies like Manpower, Kelly, and Olsten is part of the story.

The burgeoning number of small, locally-operated and often ‘back-street’ temp services is

testimony to the dark side of the temp industry. As the manager of one such service,

interviewed in Chicago for this study, saw the situation, ‘The industry grows every day ... a

good day for us is anything from 900 to 1,200 people ... I don’t know the numbers [for the

other agencies]. Everything’s kept in the dark in this industry ... It’s getting more competitive

... New offices are popping up all over the place. I mean, it’s the way to go. Companies are

saving a lot of money and a lot of time by using us instead of hiring people’.

The continued structural expansion of the temp sector reflects its unique, almost acyclical

nature. This is an industry which seems to thrive in good times and bad. More specifically,

its year-on-year expansion can be traced back to 1973, the decisive moment in America’s

‘Great U-Turn’ toward income and job polarization (Harrison and Bluestone, 1988; Gonos,

1998). These have been buoyant times for the purveyors of contingent workers, because, in

the words of industry advocates Lewis and Molloy (1991: 2), ‘no strings attached’ workers

can be deployed, redeployed, and unemployed in accordance with short-term business

requirements, managers having ‘discovered that using temporary help enables them to operate

with greater efficiency, minimize their obligation, and maintain greater control over their

budgets’. The Chicago agencies echoed these sentiments:

The temp industry is fiercely competitive, reflected in tight profit margins and downward

and job insecurity, so it should not perhaps be surprising that temp agencies have thrived in

the disorganizing and deregulating labour-market conditions of recent decades. At the same

time, the temp industry reflects, exploits, and contributes to these conditions. Temp agencies

have flourished under the climate of labour-market polarization and casualization, their very

success serving to exaggerate and entrench these phenomena. Insisting that his own

company’s profit margins are perilously narrow, Manpower’s Mitchell Fromstein likes to

present himself as a servant of the market: ‘We are not exploiting people. We are not setting

the fees. The market is. We are matching people with demands. What would our workers be

doing without us? Unemployment lines? Welfare? Suicide?’ (quoted in Castro, 1993: 46).

The growth of day-labour contracting, and of contingent work in general, has come about as

firms seek to reduce factor input costs and increase production flexibility. Temp agencies are

more than passive beneficiaries of these trends in industrial (re) organization. They actively

shape the growth in contingent labour through their role in labour-market intermediation, by

selling employers the cost-cutting and labour-controlling virtues of workforce flexibility

while mobilizing contingent workers and brokering connections to employers. According to

Bruce Steinberg of the National Association of Temporary Services, the growth of temporary

employment represents a logical response to the threat of low-wage competition from abroad:

‘The temps, in effect, are earning wages that are competitive with worker pay in other

countries’, warning that unless employers find a way to access this labour force, ‘a significant

part of manufacturing might be transferred outside our borders’ (quoted in New York Times 6

July 1993).

Within local labour markets, temp agencies shape the geographies of contingent work by

providing a fragile bridge between the under-employed labour pools of inner-city areas and

the tight job markets of the suburbs. As Lewis and Molloy (1991: 29) explain, temp agencies

are ‘[a]cutely aware of the on-going labour shortage’ in such areas, and in response the

‘temporary help industry has tapped into segments of the population which might otherwise

not be working’. Along with other contingent-work strategies such as homeworking, temping

enables suburban firms to reach deep into inner-urban labour pools, accessing labour supplies

which are difficult to mobilize using ‘conventional’ labour-market channels (see Sassen,

1998). The case of temp working therefore exposes some of the highly complex and

variegated ways in which local labour markets are being restructured and re-regulated (see

Hanson and Pratt, 1995; Peck, 1996). More generally, temp agencies must be considered

amongst the key institutional agents that make contingent labour markets what they are, that

In fact, there is a dialectical relationship between temp work regimes and the wider labour

markets in which they are embedded, as well as between the strategies of the temp agencies

and those of their corporate clients. So, the pressure on corporations to cut costs and

overheads, to become more responsive and flexible, and to minimize and right-size payrolls is

reflected in the proliferation of temporary servicing, while at the same time the sales teams of

the temp agencies actively pursue new business opportunities by selling the cost-reducing,

flexibility-enhancing, and labour-controlling virtues of temporary employment to corporate

clients. These have been key factors behind the explosion of low-skilled temping in the light-industrial sector, which is both the fastest-growing and poorest-paying segment of the

industry (Carre, 1992; Houseman, 1997). As the manager of one such (rapidly-expanding)

agency put it:

So, the very presence of agencies, with their ready supply of labour for sale by the hour,

makes forms of contingent working feasible (not to say attractive) which otherwise would be

practically unattainable for employers. Thus, the temp industry’s ‘rogue traders’—most often

the source of its ‘image’ problems (Bronstein, 1991)—feed as well as feed off job-market

polarization, in so doing dragging down conditions at the very bottom of the labour market.

This explains the burgeoning demand for day-labourers, often supplied on a no-questions-asked

basis, for routine manual work in factories and warehouses in cities like Chicago

(Parker, 1994; Oehlsen, 1997). The basic purpose of these deeply commodified employment

relations is delivering the requisite amount of labour—warm bodies in the industry

vernacular—to the client, whose labour needs can then be recalibrated on a daily or even

hourly basis. What used to be regarded as ‘dead-end’ jobs—packaging, loading, working the

assembly line—are apparently now not even that; in Chicago, much of this work has been put

out to contract to one of the dozens of local temp agencies hungry for the business.

While perhaps the most notable feature of the Chicago temp industry at the present time is

this regressive turn (back) to day-labour contracting, illustrated by the proliferation of hiring

halls along the city’s low-rent commercial strips, it is also important to recognize that this is a

this more clearly than other regions because, as the birthplace of the temp industry, it has

retained a pre-eminent role in the development of industry practices and conventions. Both

the leading and the bleeding edges of change are apparent in Chicago. The back-street hiring

halls are ‘restructuring down’ into the lowest echelons of the labour market, servicing the

process of labour flexibility in the wider economy by mobilizing, distributing, and managing

‘contingent workers’. Employment relations in this segment of the industry are remade on a

daily basis. Yet a quite different set of developments is underway amongst the leading firms

in the industry, which are increasingly being drawn into long-term relationships with

corporate clients for the ‘ insourcing’ of certain work functions. the corporatized echelons of

the industry have been growing by ‘restructuring upwards’ into more embedded and

contractualized relationships with big business clients. The shift to insourcing and the

emergence of new sources of contingent demand for highly-skilled, specialist workers have

drawn the larger agencies in the temp industry into longer-term, human resource-based

functions. These agencies are doing far more than delivering warm bodies; they servicing

demands for qualitative flexibility—involving, for example, the rebundling of skills and the

reorganization of employment functions—as well as the quantitative or numerical flexibility

on which the industry is premised (see Atkinson, 1987).

These restructuring processes are driving a process of differentiation and segmentation in the

industry and in its labour markets (see Peck and Theodore, 1998). While the temporary

services industry has always been more differentiated than its stereotypical image suggests,

there is strong evidence at the present time that the industry is polarizing in organizational,

labour market, and spatial terms. This process is summarized in a stylized way in Table 1.

On the one hand, the demand for minimally-processed warm bodies is rising: as one hiring

hall manager put it, clients are just ‘looking for a warm body that can show up for work’. On

the other, though, major corporate clients are seeking to contract out job functions,

departments, and sometimes entire tiers of employment on a quasi-permanent basis to

agencies: as a manager of a major temp chain explained it, ‘We still have people who say that

["We want 50 warm bodies"], but now we say how warm?The priority for agencies

operating at the top of the market—in contrast with those at the bottom—is not the daily

mobilization of a suitably-flexible labour supply, but the effective servicing of corporate

clients. This calls for iterative, reflexive relationships between agency and client. This may

lead to the spatial clustering of major agencies and their corporate clients, though this is

certainly not a necessity, at least as long as effective communication systems are in place (to

monitor performance and to facilitate any direct interventions which might be required).

which in some ways represents a form of co-location.2 In fact, it is also increasingly common

for major agencies to establish branches in key suburban growth centers, in addition to their

traditional downtown locations. In the location and presentation of their branch operations,

these agencies do everything they can to distance themselves from the somewhat sleazy

image of the lower reaches of the industry. The major agencies are anxious to locate

themselves in the same organizational, social, and business milieux as their corporate clients.

Such functional and locational considerations tend to override the daily imperatives of labour

mobilization and cost minimization, the preoccupations of the back-street agencies.

Both these trajectories of restructuring—downward and upward—are particularly strongly

evident in the Chicago temp sector, one of the largest and fastest-growing in the country

(Peck and Theodore, 1998). In 1999, on the narrowest definition of temp agencies in the

Yellow Pages—’temporary help services’—there were some 217 agencies listed in the City of

Chicago, an increase of 89 percent since 1985. 3 As Table 2 reveals, though the number of

agencies in the central business district has increased considerably, the highest growth rate

has occurred in the neighborhoods, where the number of agencies has doubled since 1985.

Given the low barriers to entry in the temp industry (many agencies getting started with just a

single order), the number of small, independent operators is high and constantly growing.

Some of the more successful agencies have formed local chains, with offices located in

several low-income neighborhoods. Such is the success of some of these operations, a select

number have attracted the interest of national chains (for example, Handy Andy, a local chain,

was recently taken over by Olsten Services). So, while some agencies are clearly rather

marginal operations—whose viability is essentially based on a favorable combination of low

capital outlays and large cash flows—many of the larger organizations are clearly yielding

relatively dependable profits.4 This reflects the fact that the ‘core business’ in Chicago’s

contingent economy is now a substantial one, for all its daily uncertainties and seasonal

fluctuations.

We estimate that, at its seasonal peak, the industry currently employs more than 100,000

workers in the city of Chicago each day. There is little systemic evidence on the sectoral

breakdown of the workforce, though most local surveys reveal a fairly even split between

manufacturing and service employment (see US Department of Labour, 1993). The most

important occupations for temporary employment in Chicago are, in the manufacturing sector,

freight, stock and materials handlers, labourers, and machine operators, assemblers and

inspectors; and in services, data-entry keyers, general office clerks, and typists. Nationally,

minority workers are heavily concentrated in temporary work, a pattern which is replicated in

Chicago. Here, though, Latinos comprise a particularly large share of contingent employment

in general and temp work in particular (Theodore, 1995). Despite their chronic under-employment, African-American residents of inner-city Chicago do not seem to be gaining

access to the expanding contingent labour market. An important factor behind the racialized

structure of the city’s contingent labour market is the modus operandi of the temp agencies, to

which we now turn our attention.

The core business of the temp sector is, of course, processing labour, but this itself is a

complex and variegated task. The temp industry’s ‘employees’ are, at the same time, its

major cost, its key competitive asset, and its basic product. Agencies tend to define

themselves by the niche of the labour market they service, sometimes expressed as a rate of

pay, sometimes in terms of the qualities and skills of the workers on their books. In the lower

reaches of the industry, our focus in the remainder of the paper, large numbers of agencies

operate at (or in some cases below) the minimum wage level, functioning in the context of

fierce price (and wage) competition and dealing with business clients whose main concern is

the hourly ‘billing rate’. It is not unknown for contracts to be switched between agencies

mid-shift, even for rival agencies to poach an entire work assignment, rehiring the workers

onto their own books, by undercutting the billing rate. The threat of poaching, coupled with

often widely-fluctuating daily order sizes and profound downward pressure on costs,

contributes to the ‘back-street’ culture of this part of the industry. The pejorative

connotations of the term ‘back-street operator’ are entirely fitting in this context, just as its

geographical signifiers are quite appropriate. The dingy and vaguely threatening appearance

of many hiring halls is characteristic of an industry which shuns all forms of scrutiny

(Oehlsen, 1997). One of the large contractors interviewed for this study, for example, made

much of the open windows of his hiring hall, a signifier he claimed of a reputable operation:

We’re the only ones with open windows [in this neighborhood]. When we opened it

up a couple of the owners called and said we’re crazy for leaving the windows open,

because [other agencies] actually come and steal people from you if they see you’ve

got a lot of people. If they’re short, they actually come and steal people ... They’ll

just come by with a van and tell them they’ve got work. It’s absolutely cut-throat.

You have to be in it for a while to believe it (Manager, large inner-urban labour

contractor).

Although some of the day-labour contractors in Chicago are able to regularize their order

books to a certain extent through a strategy of expansion, for many—perhaps the majority—

remaining small, and effectively in the shadows, is the only effective option. In this way,

temp agency business strategies have clear labour-market analogs, as the manager of a large,

inner-urban hiring hall explained:

In contrast with the national and multinational temp chains, whose offices tend to echo the

look and feel of their corporate clients—down to the potted plants, carpets, and crisply

uniformed staff—the aesthetic of the hiring hall is strictly utilitarian. This is a ‘no frills’

business. The key consideration for the business clients of the hiring halls is that the correct

number of workers are delivered for each shift, at the lowest possible price. There are

virtually no formal contracts between agencies and clients. Just like the fragile employment

decides to terminate (or revise) them, which might be tomorrow or in six months’ time. As a

manager in one of the largest multi-site agencies emphasized, ‘There are very few contracts.

Everything’s verbal. Really’ . This is partly accounted for by the sheer velocity and short-term

nature of the industry, but also reflects the daily realities of beggar-thy- neighbor

competition. As another manager described it, ‘It’s a dog-eat-dog world out there. There’s a

lot of agencies [which] undercut on price’ (Small inner-urban hiring and placement service).

But if billing rates provide the source of the industry’s short-term dynamic, agencies also

know that to retain a contract they have to provide more. Given the opportunity, agencies will

act swiftly to rectify problems, to remove ‘difficult’ workers, or to renegotiate the billing rate.

It is also common industry practice, where possible, to retain the same workers on a

placement for as long as possible, in order to minimize clients’ induction and training costs

while raising productivity. In these ways, the more successful agencies are able to establish a

competitive edge, albeit within the same tight cost parameters. Providing what employers

want—a ready supply of workers who are ‘willing to work’—at the lowest possible billing

rate is the basic rationale of the day-labour contractor.

The more reputable agencies that service the minimum-wage market for day-labourers,

however much they disparage the back-street operators, appreciate that very often it is the

lowest bidder who dictates the terms of competition. Value-adding strategies, such as

computer systems which reallocate workers to the same clients automatically and provide

bonuses for ‘reliability’, or attempts to pitch wages slightly above the market/minimum rate

in order to retain ‘quality’ temps, are therefore strictly circumscribed by market conditions.

These are costs which many agencies simply decide not to carry.

While these agencies may represent themselves as victims of the market, they recognize also

that uncertainty and unpredictability is inscribed into the very structure of the industry. It is

predicated on cutting costs and servicing (daily and seasonal) fluctuations in labour

requirements. The structure and dynamics of the industry therefore reflect its contingent

relationship with the wider, ‘mainstream’ economy.

Chronic instability and tight margins reflect the ‘natural state’ of this segment of the industry.

For ‘mid-market’ agencies, then, there are few alternatives but to absorb the costs of business

fluctuations and low billing rates. At one level, of course, it is their rationale to act as a

‘buffer’ for the wider economy (see Cappelli et al, 1997; Abraham, 1998), though they will

adopt what strategies they can to minimize, spread, or defer risks where this is feasible. The

chain operations are able to turn to a network of local offices to cover peak demands, often

using vans to transport workers across the city in order to meet an unexpectedly large order. 5

Others have informal agreements with neighboring agencies, reciprocal arrangements to act as

‘back-up’ if an office is over-stretched on a particular day. This strategy can only be used

sparingly, however, as it exposes agencies to the risk of subcontractors poaching either the

workers or the client, or both.

While there is some use of inter-organizational strategies for spreading risk, these are

truncated by the unregulated nature of competition in the industry. By implication, the most

common strategy for dealing with risk—and a defining characteristic of the industry—is to

pass it on to the workforce (see Mangum et al, 1985; Gottfried, 1992; Sparke, 1994).

Fluctuations in orders for agencies are consequently translated into employment and income

insecurity for their workers. Although some workers may expect to return to the same

placement when they show up at the agency at 5 or 6 o’clock each morning, none can be

certain of this. A reduced or canceled order for the agency—unless there has been fortuitous

compensatory expansion elsewhere—will mean no work and no wages for a group of workers

that day. This form of risk externalization also serves as a brutally effective labour control

strategy—a critical prerequisite for the extraction of surplus value under these straitened

conditions—as the ever-present threat of disposability induces temps to intensify their own

labour (Gottfried, 1991).

This is not a matter of concern for the agencies as such. Rather, their problem is to ensure

that they are in a position to service increased orders. Given that this is the means by which

agencies grow and become more profitable, an essential component of their overall business

strategy is to ensure that there is sufficient slack in the (local) labour supply to satisfy their

peak needs. Along with the need for low-rent premises, this tends to draw day-labour

contractors into the poorest and most under-employed inner-urban suburbs.

For the most part, hiring halls draw on a highly localized labour supply, often stretching no

more than a few blocks. In a typical case, a manager of a multi-site labour contractor

estimated that 80 percent of her workforce lived in the surrounding five blocks. Another

explained, ‘The only reason we’re here is for the people. Obviously, this is not the nicest

neighborhood. Where did you guys park? That’s the only reason we’re in this

neighborhood—to access the people. That’s the most important thing’ (Manager, large inner-urban labour contractor).

Agencies seek to engineer a situation in which there is a persistent, excess, local labour

in the labour market. For most general labouring tasks, they are able to achieve this though

the supply of labour is of course less than infinitely elastic. In the case of more highly skilled

or specialized occupations, the labour supply is inevitably tighter and the activities of

agencies are correspondingly constrained. As one manager pointed out skilled workers ‘don’t

stay around too long unless I can keep them busy ... I need lead time for large orders ...

especially with a little higher skills. Those people do get hired very fast’ (Large multi-site

agency).

Yet the agglomeration of day-labour contractors in areas proximate to their preferred labour

supplies has not afforded workers greater bargaining power that might result in higher wages.

The temp industry has been able to counteract potential wage-increasing tendencies arising

from agglomeration by fostering contingency and exploiting the volatility of its employment

relations. On the supply side, agencies have converged on neighborhoods experiencing deep

structural under-employment and widespread economic insecurity. The presence of agencies

in such neighborhoods has served to draw large numbers of workers into the day-labour

workforce as it presents the only expanding employment option available. A high level of

competition between workers is thereby maintained by the literal and metaphorical

‘crowding’ of temp labour markets. In the context of the hiring hall labour-market,

competition is direct and even physical: highly-substitutable workers stand shoulder to

shoulder each morning waiting for work assignments. Competition within the labour

supply—arising out of economic necessity—helps agencies retain a hold on their privileged

position in the labour market, which allows them to dictate wage levels to their workers.

Demand-side practices of marketing the cost-cutting advantages of labour contingency, and

the (instantaneous) acquiescence to employers’ demands by temp agencies, reinforce the

principal supply-side strategies that have both fueled the growth of the temp industry and

served to hold down wage rates.

The spatial disjuncture between the inner-city sites of the hiring halls and their business

clients in the suburbs points to the fact that the temp agencies’ brokerage role is partly a

practical, transportational one. Agencies often speak of ‘shipping workers’ out to the job sites

in the suburbs, underlining the commodified nature of temp employee relations. Of course,

clients only pay ‘on delivery’, so there is an inordinate concern—in industry conventions and

daily business practice—with the efficient transportation of workers out to the suburbs. In

labour-force is by inclination feckless, shifty, and unreliable, a naturalized state which

justifies—in the eyes of managers—authoritarian and impersonal systems of management.

When the ‘orders’ are dispatched, workers are loaded unceremoniously into vans or trucks, or

sometimes into a cars of other workers,6 and then transported to the job sites. Ostensibly as

an incentive to travel directly to their destination, workers are paid from the time they arrive

on site.

To a substantial degree, the viability of inner-city labour-contractors is predicated on the

spatial mismatch between the buoyant demand for contingent labour in the outer suburbs and

the over-supply of workers prepared (or induced) to accept such work in the inner-city

neighborhoods. As one hiring hall manager put it, ‘There are a lot of jobs in the suburbs ...

We just get them out there’. Another explained it in terms of relative labour costs: ‘If they’re

hiring people in the suburbs, they got to pay $8-9 an hour for work that these people can do

for $4.25’ [minimum wage at the time of interview]. Outer suburban businesses are

consequently able to tap into the low-cost labour reserves of the inner suburbs, dispensing at

the same time with much of the cost of recruitment and management.

From the perspective of the suburban business client, the wage-cost of labour is reduced

virtually to subsistence levels, plus a small servicing charge, while the corresponding social

and managerial costs are deferred to the temp agencies. This allows employers to access the

lowest-wage labour pools in a relatively risk-free fashion. But what for employers are issues

of cost minimization are for low-wage workers matters of daily subsistence. As the manager

of a hiring hall in one of Chicago’s poorest neighborhoods—where there were no real

alternatives to minimum-wage jobs—explained, ‘$4.25 they can barely live off. Around here

they can, but they’re struggling everyday. They don’t go out [to work] one day, they don’t eat

that day. That’s how it is’.

Suburban employers gain access to this labour supply, moreover, under conditions of

maximum flexibility and minimum commitment. Both agencies and the temp workers

themselves are paid only for work satisfactorily completed, allowing employers to tailor the

purchase of labour even to the most short-term fluctuations in demand. Employers also evade

the costs of absenteeism, uncooperative behavior, vacation and sick pay, workers’

compensation insurance, and unemployment benefits. Under these employment relations,

workers who have accidents, fall ill, or argue with the supervisor, do not have the opportunity

to become a problem or an expense for management, but are simply not rehired tomorrow. A

phonecall to the agency is all that it takes. It is difficult in many ways to conceive of a more

contingent set of employment relations: employers are able to reap the advantages of almost

complete control of this segment of their workforce:

The use of temp agencies allows employers to take advantage of a high-discipline work

regime in a context in which, first, the mobilization and management of workers is contracted

employers and agencies. While employers must supervise temps on the shopfloor, labour

problems are minimized by the wider regime of control which envelopes the temp labour

process. Temp workers have no union representation, no effective means of redress against

their placement employer, and no basis on which to renegotiate the terms of work. They are

located within a deliberately ambiguous ‘triangular’ employment relationship (worker—

agency—placement employer) within which most routine employment rights are effectively

denied (or rendered practically inoperable), a deregulated niche in the US labour market

which the temp agencies’ representative organizations have fought vigorously defend

(Gottfried, 1992; Gonos, 1998). Temps’ contingent relations of employment render them

absolutely dependent on the employer. A belligerent or workshy temp is likely to be removed

from the job site, and certainly will not be returned the following day. As one interviewee

explained it, there are occasions when a temp will ‘screw up your account. That person you

sent out there and she didn’t have alcohol on her breath, but she had a bottle in her bag. That

pisses you off’ (Manager #2, multi-site inner-urban labour contractor). Temp agencies, of

course, have no reason to tolerate such behavior, as it may cost them a day’s fee or even the

account. Highly substitutable, these workers are not placed again.

In a typical work allocation system, employers assess each worker daily, usually on a three-point

scale ranging from ‘good’ through ‘acceptable’ to ‘no return’ (see Peck and Theodore,

1998). Agencies prioritize ‘good’ workers in their allocation systems—many of which are

computerized—calling on these first in the next day’s work assignments. This represents an

extremely high-discipline labour control regime, in which failure to comply with managerial

authority leads, in effect, to immediate exclusion from work. It also amounts to a form of

seniority-based placement system, albeit one which is calibrated daily: ‘We just go by

seniority ... mostly we just go by the hours. We figure they’ve been there long enough and

haven’t screwed up too much’ (Manager, large inner-urban labour contractor). This means

that even in this highly unstable context, some workers are able to work quite steadily. So,

the labour allocation systems of the agencies are organized so as to maximize continuity of

employment, though there can be no guarantees that a worker will present her/himself in the

office tomorrow. Work assignments are organized in this way, not as a concession to temp

workers, but because this is what employers demand: they want a reliably contingent labour

supply. Normally, clients like to have the same people back every day (Supervisor, large

inner-urban hiring hall).

For the most part, daily hiring decisions are left to the ‘discretion’ of the agency, which of

course has a financial incentive to anticipate and satisfy the ‘needs’ of the client. Stable

workers are rewarded, while ‘problem cases’ soon find themselves without work. Because

formal skill requirements are generally very low, these decisions have little to do with

conventional notions of ‘human capital’. An ability to cope with what is often physically

arduous and mind-numbingly tedious work therefore becomes another signifier for ‘quality’.

And of course, the worker must also be available tomorrow.

As the manager of a hiring hall explained, because most of the placements are ‘just general

assembly’, and because in his operation around 350 workers have to be processed and

dispatched in the space of an hour in the early morning shift, opportunities for screening were

limited. The most stable workers would be automatically reallocated to the same placement,

but for the highly substitutable remainder: ‘We look at the guy. We try not to send out

vagrants or drunks or anything, but every now and again they get out obviously, they slip by

... We screen them but, you know, some slide by every now and then’.

Yet while the screening process is in many ways superficial, its effects most certainly are not.

gender, are markedly higher within the temp workforce than in the workforce as a whole

(Colastosti, 1992; Ryan and Schmit, 1996; Kalleberg et al, 1997; Spalter-Roth and Hartmann,

1998). The Chicago labour market, moreover, is known to be especially deeply race-structured

(see Leonard, 1987; Neckerman and Kirschenman, 1991; Chicago Urban League,

1994; Wilson, 1996). The modus operandi of the temp industry is such that patterns of

discrimination and segregation are not simply reproduced but often exaggerated. At root,

agencies have a financial incentive to comply with employers’ (stated, implicit, or

anticipated) demands, whatever these may be. Ignoring employers’ racial or gender

preferences may be tantamount to jeopardizing an order. Prejudice and discrimination

consequently become part of the unchallenged, taken-for-granted environment in which

agencies operate.7 Most agencies are attuned to the implicit gender and race codes that are

associated with different neighborhoods, occupations, and employers. Working within these

parameters becomes a routine aspect of their wider imperative accurately to read and service

‘the market’. Few of the agencies interviewed made any effort to conceal this. Occasionally,

there were attempts to rationalize patterns of segregation, but more often than not these were

accepted as given.

In terms of the racial stereotyping of jobs, most agencies acknowledged, and operated within,

a distinctive hierarchy of labour-market positions. Some agencies implicitly defined their

‘market niche’ in terms of the prevailing ethnic mix of their workforce. Given the marked

ethnic segregation of Chicago’s housing market, the location of an agency was often enough

to trigger racial signifiers. Many agencies were explicitly targeting Latino workers, both in

their daily work allocation systems and, more fundamentally, in their location decisions. In

contrast, virtually none of the agencies were located in predominantly African-American

neighborhoods, despite the manifest availability of workers in these areas. Employers placing

an order with an agency in a Latino-dominated area would know what to expect, and indeed

some agencies would blithely confirm that they rarely drew workers from across local ‘race

lines’, such as major streets or train lines known to divide one ethnic community from

another. Through such forms of geographical shorthand, temp agencies perform a crude

sorting function in local labour markets, in effect, doing the discrimination on behalf of their

clients.

Latino neighborhoods triggers a range of employment-related signifiers for employers: they

are perceived as locations of cheap, hard-working, and often undocumented workers. The

regulatory ambiguity around the use of agency labour allows employers to insulate

themselves from the potential legal costs of employing undocumented workers, a status

commonly elided with all Latino workers. The responsibility for checking the documentation

of workers is again displaced from the employer to the agency. As a hiring hall manager

explained, ‘We take documentation, if they have it. When they come in they have fill an

application and give us the proper ID ... and it’s complete as far as we know. We’re in

charge, that’s why [clients] use us. They pass it on to us and we’re responsible for it’.

I would say 75 percent of the people out of this office are Hispanic. Why, because

people for some reason think they are better workers ... but with any ethnic group you

have someone that’s always screwing it up. We have some clients that prefer

Hispanics, request Hispanic people, and if you send people from other nationalities to

work there and sometimes you run into problems, the main problem being that the

majority of people who work there are Hispanic and they speak Hispanic, so other

people don’t understand what’s going on ... it’s hard to communicate ... But it’s

gradually changing because of the immigration laws [which] are getting tighter on

employers. The offices are visiting more, so therefore we have to make sure that the

people are working for them are legal (Manager #2, multi-site inner-urban labour

contractor).

Many of the inner-city agencies define themselves in terms of the principal ethnic segments of

essentially naturalized relationships between different ethnic groups and ‘appropriate’

segments of the job market, reflecting historic patterns of racial hiring which they saw as their

responsibility to ‘read’. As the manager of a small hiring and placement service which

mainly dealt with Latino workers explained, his organization specialized in a different

(ethnic/occupational) segment of the labour market to some of the other agencies in the

neighborhood, which in this case tended to concentrate on the placement of Polish workers in

relatively-skilled, machining jobs: ‘There’s a lot of Polish agencies in this area ... on their

window it’s all in Polish ... We advertise on the Latino radio station’. This manager went on

to rehearse the qualities of Latino workers which supposedly rendered them both popular with

employers and especially well-suited to temp work:

The flipside of this process is the effective exclusion of many African-American workers,

even from the temp work. As Newman (1999: 156) has observed of the situation in Chicago,

‘employers carry around a set of beliefs about job applicants from the inner city that are

deeply ingrained and fundamentally prejudicial. African-Americans meet a wall of suspicion

from employers and managers who believe they are more trouble than they are worth.

Chicago employers are prone to seeing the men as belligerent, the women as saddled with

children that they cannot take care of, and both men and women as illiterate’. In Chicago,

race and labour-market geography are intimately related, to the point that neighborhoods have

distinctive ethnic identities, in large part due to their (surface-level) homogeneity. Even the

most general geographical markers such as ‘ Southside’ tend to evoke clear images of the

population: its race/ethnicity, its income status, and its place in the neighborhood hierarchy.

Three-quarters of the Chicago employers interviewed by (1991) expressed negative views of

inner-city blacks, particularly African-American males, whom they associated with

dishonesty and unreliability. Neckerman and Kirschenbaum also remarked upon the ease

with which employers were willing and able to ‘navigate’ urban labour pools through the use

employability. So addresses on the Southside signal a variety of (negative) job-related,

neighborhood, and social characteristics to employers.

This race-structured hiring regime is vividly reflected in the geographic location of agencies,

depicted in Figure 2. Of those agencies located in Chicago’s neighborhoods, outside the

Central Business District, virtually all are based in communities with a significant Latino

population. In contrast, there are almost no agencies located in Majority-black neighborhoods

on the Southside and the Westside. (The handful of agencies which are to be found in these

areas are non-profit job placement services.) The most significant spatial concentrations of

agencies are located in neighborhoods to the north and south of the Westside, namely East

Humboldt Park and West Town to the north and Pilsen and Little Village to the south.

Traditionally ports of entry for eastern European migrants, these neighborhoods now have

large Latino populations. These Latino areas are the target neighborhoods for the day-labour

contractors, whose very addresses subsequently send ‘appropriate’ race messages to

employers.

The temp agencies’ location decisions, just like their hiring strategies, are highly racialized.

Their rationale—giving employers what they want, when, and where they want it—tends to

be reflected, in the case of placement decisions, in an exaggerated process of race-structured

recruitment. And because, by definition, temp workers pass through the screening and

recruitment process much more frequently than ‘regular’ workers—in some instances, daily—

they are as a group particularly vulnerable to distortions and inequities in this process. The

presence of temp agencies in this intermediating role has the effect, then, of hardening and

institutionalizing patterns of job-market inequality, both spatially and socially.

Although some of this discriminatory hiring practice may be put down to racism on the part

of individual managers or tacit acceptance of local hiring conventions, at a more fundamental

level it reflects the fact that many (if not most) agencies are trapped in the loop of price-based

competition. Brutally, there is no margin in positive discrimination here. In temp industry

lore, employers are typically portrayed as intolerant, impatient, and simply too busy to listen

to excuses. Agencies that are serious about keeping a contract will try to anticipate, and

respond fully, to clients’ expectations and requirements, which means not only getting the

billing and order size right, but delivering a workforce ‘with the right attitudes’ and one that

‘fits in’ with the clients way of doing business. While some of the mid-market agencies

seemed rather more reluctant to acquiesce to employers’ demands, all conceded that

discrimination, placing undocumented workers, and ‘body slamming’ (placing homeless

practices of course only served to confirm the poor image of the industry in the eyes of many

potential clients. Accordingly, some of the mid-market agencies sought explicitly to distance

themselves from the practices of the body slammers, signifying this in deliberate labour

market, business, and location strategies, such as deeper screening, (small) wage mark-ups,

operating from ‘clean and respectable’ premises, and so forth. In some cases, this simply

amounted to just another form of cursory screening, as workers—whose physical appearance

suggested that they might be homeless, a drug addict, or a drunk, or who just ‘didn’t look

right’—were simply turned away. In attempting to ‘trade up’ in this way, then, agencies are

hardly likely to counter the prevailing pattern of discriminatory practice. They may even

reinforce it.

The low barriers to entry in the day-labour segment of the temp industry mean that this sector

is perpetually unstable and destructively price-competitive. While there was some evidence

that the more experienced users of temp services, many of whom had been ‘burned’ in earlier

dealings with down-market agencies—tended to gravitate towards more reputable (and

invariably slightly more expensive) services, market conditions on the whole were suppressed

by persistent undercutting on the part of the low-cost operators. This places a kind of

competitive drag on the industry, a form of capillary action which tends to reduce

employment and business practices to the lowest common denominator. There is

consequently a sense in which ‘restructuring down’ is associated with internal, self-reinforcing

dynamics of degradation.

Focusing on issues of spatialized labour-market restructuring in the temporary services

industry in Chicago, this paper has examined how the supposedly ‘new’ motives of speed,

flexibility, and responsiveness are coexisting with old ones of cost-cutting and labour

exploitation. Above all, this is a highly dynamic situation, in which the shifting contours of

profitability for the temp agencies are inextricably related to changing job-market conditions.

As one of the hiring hall managers interviewed for this study observed, ‘It’s a fast-paced

environment ... You have to get your people out ... You can’t slack off’.

The temp industry is thriving on this flux and uncertainty, but as it has expanded, so it has

become more complex and functionally variegated. By all accounts, business failure rates are

very low in the temp services sector, reflecting both the aggregate expansion of the temp

market and the efficiency with which agencies’ are able to pass on the costs of order-book

fluctuations to the workforce. At the same time, the temp industry is restructuring, both in

terms of its corporate and its labour-market relations. On the one hand, day-labourer

contractors have been ‘restructuring down’ into the lowest reaches of the labour market,

constructing hyper-commodified employment relations in which daily instability and high

rates of exploitation are the norm; on the other hand, the corporate sector of the industry has

been actively engaged in a process of ‘restructuring up’ into once-stable spheres of

employment, developing increasingly regularized relationships with business clients, for

whom the utilization of temps has become a functionally-integrated aspect of human

resources strategy.

The explosion of both temporary employment and the temporary services industry in Chicago

and other US cities has been legitimized by the entrenched culture of labour-market

deregulation and the advocacy of flexibility as a managerial virtue. The maturation of the

temp industry holds far-reaching implications for the structure and dynamics of labour

markets. It represents an emergent mode of privatized labour-market intermediation which

both reflects and reinforces the (de)regulatory logic of flexibilized labour markets. Temp

working is contributing in a variety of ways to the restructuring of labour markets, especially

stretched and reworked. Temp agencies are playing a major role in reorganizing ports of

entry (and, crucially in this turbulent sector, re-entry) into the labour market, developments

which we have shown here to be intimately connected to the geographic restructuring of

urban labour markets. There is a clear tendency in Chicago for hiring halls and day-labour

contractors to gravitate toward the source of their preferred labour supply, reflecting the need

to mobilize highly elastic sources of low-wage labour on a daily basis. This stands in marked

contract to the locational strategies of the upward-restructuring agencies—the multinational

corporates specializing in better-paid and more formally-skilled workers, which based in

high-rent offices in Chicago’s central business district or in suburban office parks.

Locationally, these agencies tend to be drawn toward the source of their labour demand,

reflecting the imperative of sustaining reflexive and enduring agency-client relations.

For the bottom-end agencies, the presence of an elastic, abundant, and minimum-wage

dependent labour supply is a functional prerequisite. These agencies have fashioned

strategies which enable them to reach deep into under-employed, inner-urban labour pools,

primarily in Latino communities, subsequently shipping and selling this labour supply to

suburban employers. Although, in principle, these workers are highly substitutable with one

another—having low levels of formal job qualifications and being prepared to accept a wide

variety of job assignments—we have seen that in practice, even this highly commodified job

market is socially structured and institutionalized in subtle but important ways. So while in a

superficial sense the temp labour market resembles the kind of ‘spot market’ for labour

envisaged by neoclassical economists, it is in fact anything but. The agencies’ work

allocation systems favor ‘reliably contingent’ workers who are available every day and whose

work attitudes, job capabilities, and personal attributes render them acceptable to employers.

And while these general criteria of workplace acquiescence and reliability/availability play a

key role in configuring the temp job queue, it is also important to recognize that this job

queue is socially structured according to race, gender, and physical appearance. In providing

what employers want, and expect, temp agencies harden and institutionalize processes of

labour segmentation at the point of entry to the job market, with potentially wide-ranging and

long-term effects for occupational mobility, employment security, and wage prospects.

The continuing capacity of the workforce to endure these employment conditions is

predicated, first, on the absence of real alternatives, and second, on the constant

replenishment of Chicago’s low-skilled labour pools through in-migration. The continuing

‘job gap’ between the number of low-skilled workers and the supply of entry-level jobs in the

city (Carlson and Theodore, 1995) and the surprisingly long employment tenures of some

the demand side of the labour market—with overall demand deficiency and the structural shift

towards contingent demand—than on the supply side. But this does not mean that demand is

independent of supply. In fact, the two are co-constituted in ways sensitive to the localized

geographies of the labour market (Hanson and Pratt, 1995; Peck, 1996). Spatial dynamics

link dependent labour supplies and contingent labour demand: while there is little evidence of

workers ‘choosing’ contingent work—many will work quite steadily if they are given the

opportunity, the very existence of large, under-employed, and minimum wage-dependent

labour pools in Chicago’s low-income neighborhoods facilitates expansion of temp

employment.

There is a sense, then, in which the emergence of new (or reworked) contingent labour-market

forms, such as temping, is predicated on the presence of such disenfranchized and under-employed labour pools. This might be seen as a perverse case of supply creating its own

demand. But the arrival of temp agencies in areas of inner-city job shortage is significant not

simply by virtue of its effects on labour-market arithmetic; more fundamentally, it is also

about remaking the regulatory ‘rules’ of the labour market. Temp agencies may be

businesses, but they are also regulatory institutions, and as such are sites of rule-making and

rule-enforcement in (contingent) labour markets. In this sense, temp agencies can be seen as

an element of an emergent, privatized ‘regime of regulation’ for contingent labour markets of

secondary sector (see Gottfried, 1992; Allen and Henry 1996; Abraham, 1998). This paper

has highlighted a number of aspects to this inchoate, imperfect, and contradictory regulatory

role. First, and on the supply side, temp agencies are actively engaged in deepening,

broadening, and flexibilizing the supply of labour for contingent jobs in the sense that their

practices serve to expose and commodify hitherto-inaccessible, localized niches within urban

labour pools. Second, and on the demand side, the agencies’ ability to deliver a virtually

instantaneous labour supply means that it becomes feasible to develop new forms of

contingent jobs, or rather fractions of jobs, thereby increasing the relative and absolute size of

the contingent labour market. Third, in terms of the social distribution of work, the

intermediary role of agencies tends to intensify discriminatory hiring practices and patterns,

further balkanizing the lower end of the labour market on the basis of workers’ ascribed (race,

gender, etc.) rather than achieved (skills, ‘human capital’, etc.) characteristics. Fourth, with

respect to changing power relations in the labour market, temp agency allocation procedures

and payment systems serve to enforce workplace discipline (on behalf of employers), while

the constitution of competitive relationships between workers—on a daily and individual

basis—undermines the foundations for collective consciousness and action. As Burawoy

(1985: 265) points out that the formation of such an ‘ atomized and vulnerable labour force’

of the labour market as a whole, temp agencies are functioning to stretch the envelope of

labour contingency, by driving down the costs of recruitment, hiring, and induction in ways

which disproportionately favor high-turnover segments of the job market. Temp agencies

also reduce the relative cost of employing contingent labour by enforcing flexibility on

employers’ terms, by distributing work according to ‘reliability’ and ‘attitude’, and by

managing workplace and hiring/firing ‘hassles’ for employers.

In these and other ways, temp agencies are active institutional agents in the making and

remaking of contingent labour market relations. Their multiple roles in labour mobilization,

screening, recruitment, and placement, in the maintenance of workplace and labour-market

discipline, in driving down and holding down the costs/wages of cheap labour, and in

spreading and externalizing the risks associated with contingent employment, together mean

that temp agencies have become a significant—and growing—institutional presence in the

labour market. Aside from their complex functions as agents of labour-market (re)regulation,

temp agencies also have a material, business interest in growing the contingent, flexible

‘periphery’ of the job market at the expense of ‘core’, again drawing attention to what is an

active rather than simply passive role in the restructuring of labour-market structures, norms,

and conventions. In the Chicago case in particular, the presence of a large (and yet still

expanding) infrastructure of temp agencies has come to exert an important influence on the

path of labour-market restructuring, facilitating as it has the simultaneous suburbanization and

flexibilization of jobs by opening up low-cost recruitment channels into the contingent labour

pools of the inner-city. Hence our particular interest in this paper in exploring some of the

ways in which temp agencies are rewriting the rules, restructuring the incentive-systems, and

reworking the geographies of urban labour markets..

everything will just funnel through the on-site ... It’ s kinda just someone there to hold the client’ s hand ...

You have foremen [sic] who have never, who haven’ t been trained to handle temps, and they just don’ t

have a clue how to handle it. So you put an on-site there to handle those issues’ (Manager #1, multi-site

inner-urban labour contractor). Another commented that while a certain minimum size of order was

necessary to make an on-site presence feasible, in some ways just as important was the complexity of the

labour-management issues: ‘ We have companies where we have 40 people there and they don’ t need an

on-site, because they’ re very well organized and they fit right in and everything’ s fine. And then we have a

company that has 35 and wants us out there three times a week. But you have to look at that, because you

can stretch yourself a little thin and of course we’ re in this business to make a profit’ (Manager, large multi-site

agency).

3 On the wider count of employment agencies, which includes employee leasing and

employment contracting, there were 427 listings in the 1999 Yellow Pages. Classification changes

mean that it is no longer possible to trace the growth of this widely-defined group of temp agencies over

time. On a broader definition used until the mid-1990s, however, the number of agencies grew by 70

percent, to over 300, between 1985 and 1995 (Peck and Theodore, 1998)..11

and driving other agencies down-market in the process—through takeovers or by adopting loss-leading

strategies in order to drive out local agencies. As one victim of this practice explained, ‘ What’ s happening

in the industry now is that the large companies are trying to force out the small companies by getting

national accounts all over the country ... [They] will then charge a very low fee, like 30 percent, now I think

somebody even went down to a 28 percent, which is ridiculous. If they’ ve got 300-400 temps working

there it’ s very lucrative for them. The small companies cannot compete, there’ s no way we can compete

with those prices … The worst thing about it is that the [client] corporations are not only telling you what

you can charge, they’ re telling you what you have to pay ... We cannot grow at that rate ... It’ s OK for you

to tell me ... I’ m only going to pay $13 for a secretary, but then let me go out and find the best secretary I

can for $8. And I can still realize $2-3 an hour profit. But if you tell me, well, I’ m only going to pay $13

and you’ ve got to pay her $10-11 an hour, then you’ re only allowing me to make 50 cents an hour. I

couldn’ t exist off of that ... So small temporary services are hurting ... because of the trend of major

corporations to turn to the larger [agencies] and national contracts ... How do you go out and compete

with the little business there is left in the local area, when the big [agencies] are trying to suck up that too?’

(Owner-manager, small downtown agency)..

5 ‘ Sometimes [agency F] will subcontract to us any light industrial they might have. But other than that we

haven’ t seen a lot of that [subcontracting]. Because we have [several] different offices we kind of just

network with them and keep the business. We haven’ t reached anything that we haven’ t been able to

handle’ (Manager #1, multi-site inner-urban labour contractor)..

workers are women]. It’ s really funny. Men can do the job as well as women, but the ethic, the tradition is

that this is women’ s work and the men are at the end of the line doing the more physical labour. Despite

all the progress we’ ve made in equal employment laws in this country, very little has changed in those

occupations’ (Manager, small outer-suburban placement agency)..

Support for the research reported here was provided by the John D. and Catherine T.

MacArthur Foundation and the Harkness Fellowships programme of the Commonwealth

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Labour supply

appropriate, under-employed, inner-urban

labour pools

Targeting of specialized occupational

niches

Passive, low cost and highly localized

Formal; targeted advertising

Active, costly, and extra-local

slamming’ where possible

Based on ascriptive criteria

In-depth assessment of skills and

aptitudes

Based on achieved criteria

‘ Hardening’ of employers’ recruitment

criteria

Matching: formal, tacit and

organizational skills

Achieving a ‘ fit’ with corporate culture

Impersonal systems: workers as ‘ orders’ ,

transportation as ‘ delivery’

Pursuit of qualitative criteria

Personalized systems ensure

‘ appropriateness’ for placement

terms of attendance and compliance

Rewarding ‘ reliability’ : measured in

terms of functional job requirements

disciplines (commodification of daily

work routines)

Quasi-internalization of the labour force

(by agency/occupational specialization

rather than by ‘ employer’ )

Labour demand

few formal skill requirements

Functional flexibility in specialized

occupations

Purchases in units of labour time (daily

or hourly)

Minimal specification of skills

capabilities

Contractualized

Planned/regularized where possible

Close matching of task requirements

and worker attributes/skills

repetitive with little worker discretion

Integrated; firm-specific rebundling of

tasks; requirement for worker discretion

monitoring; crude categorical

evaluations

Presumption of worker autonomy;

evaluation and job development through

negotiation

Limited bonus systems to encourage

‘ reliability’

Project-based

Market rates (sometimes premium)

Bonus and loyalty systems

Geographic tendencies

Gravitation toward source of labour

supply, in order to secure elastic,

localized labour pool

Gravitation toward source of labour

demand, in order to facilitate reflexive

Loop/CBD 65 118 77

Neighborhoods 50 99 98

TOTAL 115 217 89

(Sources: Chicago Consumer Yellow Pages and Chicago Business to Business Yellow Pages)

Sources: Center for Urban Economic Development, University of Illinois at Chicago; data

derived from Chicago Consumer Yellow Pages and Chicago Business to Business Yellow

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