For years, Richard Valley was part of America's privileged class. He was a middle manager for a large Texas bank, made a $45,000 salary, raked in yearly bonuses and enjoyed full health and life insurance coverage and a generous pension, courtesy of his employer.

It wasn't unusual for the 39-year-old Valley to take week-long trips to California and to dine several nights a week at fashionable restaurants. He owned a black BMW and a Rolex watch, and his luxury apartment in Houston had vaulted ceilings, a fireplace, security, a hot tub and swimming pool.

All that ended in 1986, when Valley was laid off by his bank, one of many Texas institutions hobbled by a collapse in the price of oil. Unable to find full-time work, he scraped from one short-term job to another as a temporary accountant, spending nights and weekends as a handyman at an upscale Houston home-accessories store.

Valley's income dropped by a third, he had no pension or medical coverage, and he said he could barely pay his bills and child support for two teen-age sons. He sold most of his furniture and moved to a 400-square-foot efficiency apartment.

Although technically returned to the ranks of the privileged -- he was hired Jan. 4 as a full-time assistant controller for a Houston-based home builder -- Valley said he still lives at the margin.

"I was in the true sense of the word economically devastated by the last two years of my life," he said. "It just wiped me out. I owe a lot of money in a lot of places. I'm going to have to spend the next year or two accumulating a cushion -- getting myself back to where I can eat decent meals or buy a new suit," Valley said.

"What if this happens to me again?" he asked. "You have to be realistic and realize today there are no guarantees."

Valley's caution comes from two years in America's new "contingent work force," the product of a profound restructuring of work in the last decade that is proceeding more quickly than the government and business analysts can gauge it.

Since the deep recessions of 1979-80 and 1981-83, when virtually every major industry experienced disruptive layoffs, firings and retirements, companies throughout the economy have significantly cut their full-time work forces. They now turn increasingly to temporary and part-time workers, contractors and other no-strings-attached employees -- the various components of the contingent work force.

Employers have embraced this work force because it is both expandable and expendable. Its ranks swell during periods of peak production and need, and these employees are the first to go in hard times, forming a sort of buffer around a core of better-paid, full-time workers. In the continuing quest to enhance profits and meet global competition, this is now a favored tool for cutting labor costs and staying flexible.

"It's a phenomenal economic and social event," former labor secretary William E. Brock said of changes reshaping the work force. "The leaning-down of American business over the last six years has been very substantial. There are an awful lot of companies that were very fat, and this has been good for them. Tough on people, but we have more competitive companies as a result."

Many in the contingent work force are unwilling conscripts, as Valley was, uprooted from secure jobs and the standard of living that went with them. But others, from clerical workers to MDs, have chosen a work-as-you-go life in place of full-time careers and rigid schedules, and they like the change.

"It's interesting to watch people working in full-time positions and hear them say, 'I don't look forward to coming to work in the morning,' " said Carla Nasby, a 25-year-old data processor in Denver who works as a temporary through Manpower Inc. so she can take off several months a year to travel. "I go to work thinking, 'Wow, new day!' The pressure's not there. You do your work the best you can."'A Smaller Core of Permanent Workers'

"I don't think it's a simple equation of the big, bad employer and the victim worker," said Kathleen Christensen, an assistant professor at City University of New York and a consultant on contingent workers to the Conference Board. "There are elements of that, but it's more complicated than a lot of people acknowledge. What's at stake here is a restructuring of the work force into a smaller core of permanent workers."

Hard numbers on this burgeoning sector are hard to come by. The falling unemployment rate overlooks it, making no distinction between full-time workers and those in the more precarious status of part-timers, "temps" or contractors. Moreover, the government says it has no idea whether voluntary or involuntary contingent workers are the larger group.

A study by the Conference Board, which analyzes business trends, estimates that workers without full-time ties to companies now account for more than a quarter of working people, and their numbers are growing at about twice the rate of the total civilian labor force. Some labor economists say they believe the number of temporary workers is far smaller, however.

"Measuring the contingent work force is like trying to measure a shadow," said Richard Belous, a Conference Board economist.

The government's Bureau of Labor Statistics (BLS) projects 82 percent growth in the number of temporary workers by the year 2000 -- compared to 19 percent for the overall economy. Only computer and health care services are expected to grow faster.

Women and minorities are greatly overrepresented among contingent workers. For women, part-time work has become a way of coping with the demands of motherhood and the need to earn money, and also a means of reentering the work force after a long absence.

"We have potential de facto segregation of the work place . . . . People with relatively few options or minimal leverage in the marketplace . . . will be shunted into contingent jobs and won't have increasing earning power," said Christensen.

The largest category of contingent workers is office and clerical employees. Others increasingly going the way of part-time or temporary status are grocery store cashiers, department store clerks, laboratory technicians, unskilled production-line workers and health care aides.

In recent years, contingent professionals have proliferated. Many companies now hire temporary or contract accountants, attorneys, engineers, and purchasing and marketing specialists. "In five years," said Walter Macauley, president and chief executive officer of Adia Services Inc., a major supplier of temps, "if you want a sales manager for a special project for three months, he will be available."

Some formerly full-time jobs such as janitor and guard now are filled routinely by contracts with outside firms that hire mostly part-time workers, who receive few or no fringe benefits.Many Temporaries Go Uncounted

BLS reports 1 million temps -- workers hired to perform a specific task, sometimes for a few days, sometimes for a year -- but acknowledges that this is an undercount, because it includes only those working through temporary service firms, not the many temps hired directly by employers. The federal government and related agencies, for example, directly hired about 300,000 temporary workers last year.

In addition, BLS reports that 5.4 million men and women now work part time, or less than 35 hours a week, only because they cannot find full-time work -- a 53 percent increase since 1979.

The pressure of competition in the 1980s has in many companies ended the era of corporate benevolence dating to World War II, when firms then constrained by government wage and price controls began providing health, welfare and pension benefits as a way of enhancing compensation to attract more workers. Spurred by tax incentives and employee bargaining, this coverage vastly expanded through the 1970s.

Full benefit coverage was costing some companies 30 percent or more of their total compensation packages by the 1980s. Nationwide, benefits from Social Security to profit sharing accounted for 20.3 percent of all wages and salaries paid by employers in 1985. A Chamber of Commerce survey of 833 businesses showed that benefits reached 40 percent of 1986 payroll costs.

By contrast, firms using temporary workers typically do not pay them any benefits, although some offer partial coverage. Temporary services firms, which supply temps to employers, pay benefits required by law -- Social Security, workers' compensation and unemployment insurance. Part-timers, contractors and consultants usually get reduced benefits, if any.

Large temporary firms such as Manpower, Olsten Corp. and Kelly Services offer temps some of the benefits of full-timers: job training, paid vacations and cut-rate insurance plans.

Partly because of the loss of full-time work, the number of people under age 65 with no health insurance coverage grew nearly 15 percent from 1982 to 1985, and is now 35 million, according to the Employee Benefit Research Institute.

Unions, largely unsuccessful at blocking the growth of contingent work, have turned to trying to slow it, and to secure benefits for part-timers. Given the large number of workers no longer covered by health insurance and because health care costs are soaring, Congress is considering legislation mandating coverage for much of the work force.Opportunities Vary With Market

Contingent workers fare relatively well in a recovery, but are hard-pressed in downturns. Their opportunities for stable employment, higher pay and even benefits are greater in healthy employment markets or if their skills are in great demand.

In Hartford, Conn., where many jobs are available, there is a hot trade in temporary workers. Aetna Corp. gives temporaries pay raises on a par with those given full-timers. It offers medical, pension and life insurance coverage as well as a savings plan in order to recruit the best temps, according to Francesca LaMonica, staffing director.

At Intermountain Health Care, a major hospital chain in the Rocky Mountains, an acute nursing shortage has empowered nurses to command flexible hours and high pay. "We'll take them any way they will work for us," said Kermit Jones, vice president for human resources. "We provide full-time benefits to anyone working more than 20 hours a week." The company also offers subsidized day care, Jones said.

By contrast, in Decatur, Ill., where the unemployment rate remains in double digits -- compared to less than 6 percent nationally -- it is an employer's market, and among workers, contingency can be a way of life.

"When you deal with people day after day, it's disturbing," said Ann Irwin, manager of the Illinois Department of Employment Security there. "You see them coming in here asking, 'Can't you find me a full-time job? I have two part-time jobs and I still don't have benefits.' "

When laid-off workers return to their old jobs, they usually do so as temporaries, at substantially reduced pay, said Cam McKinney, director of a Decatur temporary firm. "With temps, employers don't have to pay benefits," McKinney said. "Any time a person messes up, they can get rid of them. They can't do that with a regular employee because of the unbelievably ridiculous unemployment and workman's compensation laws in Illinois."

Even in certain highly skilled professions, full-time employment opportunities are shrinking. Bruce Culver, president of Lab Support Inc., a Woodland Hills, Calif., firm that specializes in scientific temps, gets 100 resumes a week from out-of-work chemists, genetic engineers and bacteriologists, among others.

"After restructuring, most companies don't have the appetite to build up large, full-time work forces," said Mitchell Fromstein, president and chief executive officer of Manpower Inc. "Basically, at this point in the economic cycle, they would be hiring like crazy, and they aren't."

The business of providing temporaries is itself a hot industry. Blue Arrow PLC, a British employment services company, paid $1.3 billion cash last fall to buy Manpower, the largest temporary services company in the United States. Olsten Corp., one of the nation's oldest temp companies with 425 offices, placed 235,000 temporary workers last year, compared to 150,000 in 1983, according to its chairman, William Olsten.

The trend toward greater use of contingent workers is pervasive, and is visible in almost every sector of the economy. For example:The federal government adopted a new policy in 1985 to encourage the use of temps. According to Ed McHugh, personnel policy officer at the Office of Personnel Management, the federal government and ancillary agencies like the Postal Service now employ 300,000 temporary workers, compared to about 80,000 in 1983. The highly competitive United Parcel Service employs 180,000 workers in all, and 40,000 of them are on part-time schedules. Spokesman Ken Sternad said the company began to move toward more part-timers when it realized that the peak time for moving packages lasted only three or four hours a day, "and yet we were paying people for an eight-hour day." The Travelers Cos. save about $1 million a year, according to a spokesman, by using 225 to 250 part-time clerical workers a week. The firm draws these people from a bank of 700 retirees, from Travelers and other firms, who come with years of experience. Xerox uses former employees as independent contractors, while Motorola hires contract employees with the understanding that they could be let go with 24 hours' notice.

Industry's view of this new phenomenon is not always rosy. Some companies have grown concerned about the long-term implications of a work force that may not have the loyalty, motivation or skills that were crucial to many companies in the past.

"Part-time people have a part-time identity with the company. Full-timers have a different sense of loyalty, often a different interest in putting in extra hours and going the extra mile. There are tradeoffs on all scores," said Donald M. Levinson Sr., vice president and director of human resources for Cigna Corp., a major user of temporaries and part-timers.

Moreover, many companies are poor managers of contingent workers, paying hefty fees to contractors who take longer than necessary to finish a job, while losing the advantage of full-time employees who innovate in down times. Such firms like contingent workers in part because they make the employment count look smaller.

"Some top managements are playing a shell game with their boards and with {Wall Street} analysts," said Allen Janger, senior research analyst with the Conference Board. "It makes them look lean and mean."

As attitudes toward work continue to change, and as companies whittle away at labor costs to become more competitive, the census of workers without full-time jobs is sure to keep growing. This portends much faster unemployment growth in the next recession, according to Belous of the Conference Board, because contingent workers tend to be the first to be let go in downturns.

"Now everyone feels the heat of the marketplace," said Thomas Schneider, president of Restructuring Associates, a Washington law and consulting firm. "Efficiency, quality and service touch everybody. If you aren't productive, you're much more likely to lose your job."