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Temp Workers and the New Economy

July 6, 2013

In recent years, and especially in the time since the beginning of the current economic recovery, temp work has been growing ten times faster than private sector employment as a whole. The percentage of workers employed through staffing agencies has been rising dramatically Often, it is extremely difficult for workers to find jobs without going through a temp firm. This is true even for factory or warehouse work in some areas. The most recent Labor Department report stated that 2.7 million workers held these types of jobs in June.

Hiring workers through temp staffing agencies enable many large corporations to lower labor costs significantly. The companies hiring the temps become insulated from workers’ compensation claims, unemployment taxes, union drives and the need to make sure their workers are citizens or legal immigrants. The workers themselves often are paid minimum wage or close to it, with few if any of the benefits enjoyed by permanent employees of the companies they are working for. They may not be sure on any given day that they will even have a job to go to.

Temp workers employed in this fashion are extremely vulnerable. Many can only get health care though government programs such as Medicaid, for example, which is another way in which the corporations using their labor save huge amounts of money in labor costs as opposed to employing full-time permanent employees in those positions. Forget about such luxuries as paid vacations, paid sick leave or 401K retirement plans. Many permanent positions have been gradually phased out in favor of getting the same work done by temporary employees, some of whom often end up doing the same work for less money and far fewer benefits because they are technically employed by the temp agency, not the large corporation that profits from the product of their labors.

The increase in employment of temporary workers has contributed to the increase in inequality between workers and corporate executives overall in our economy. As CEO pay has been skyrocketing during the recovery, wages for the average worker have stagnated to the point where the CEO-to-worker pay ratio has risen to 273 to 1. Long-term unemployment and underemployment, symptomatic of what appears to have become the new normal since the Great recession, add to the downward spiral of many into accepting part-time and/or temporary employment at lower wages and fewer benefits than they had received earlier, just to make ends meet.

Meanwhile, the executives of the companies employing these tactics can point out to shareholders what good managers they are based on the profits they are making for the company, thus ensuring themselves hefty pay increases. This pattern is present in broad segments of the economy. Most of the people doing the bulk of the work that goes into making the products (often abroad), loading, shipping  and unloading them, stocking the shelves, and even selling them as cashiers are either not employed directly by the larger company itself, or are employed as either temporary or part-time workers.

Walmart is a major company that uses such policies and practices, but they are far from alone. Almost every major retailer does likewise, as do many other product manufacturers of electronics and other consumer goods. Even public entities, educational institutions and correctional facilities have trended in this direction, as the push to produce more at lower cost seems to pervade more and more aspects of our lives and society as a whole. The work is unevenly distributed and the rewards are unequally divided. Economic justice often seems to have become a distant and unattainable fantasy for most.

If you are lucky enough to have a job, look around at your coworkers. How many have full-time jobs with full benefits? If you look around at other workplaces – grocery stores, department stores, retail stores, schools, restaurants, or wherever – see how many people there have those things. What percentage of workers at these places that you shop, learn, or eat at make a living wage, have good health coverage and other reasonable benefits. Ask how conditions have changed at those workplaces over the years. These days, reducing employee hours as a means of not paying for their health care has been a publicly stated policy to avoid the changes involved with the Affordable Care Act. Pensions and 401k plans have become either non-existent or entirely inadequate for most workers.

The trends are undeniable. More jobs have become part-time and/or temporary with fewer benefits than a few decades ago. Wages and salaries have not kept up with increases in productivity.The minimum wage has not even kept up with inflation. The difference can be seen in higher profits, the main beneficiaries being the stockholders and corporate executives. Public sector institutions have also participated in this downsizing and outsourcing as budgets are cut. The push to outsource jobs and contract out work to other companies, both locally and abroad, is constantly in play. Relieving corporations, or school districts or prisons, or even Congress, of their responsibility to ensure that everyone involved in their operation – no matter how peripherally – is treated fairly and well is unacceptable. But the obfuscation of this responsibility is passed around like a hot potato, ensuring that many are treated deplorably and nothing is done to fix the problem.

Treatment of workers in our society has taken a turn for the worse in recent decades. The time has come to reverse some of the more debilitating practices employed by the corporate and governmental powers that be to squeeze more and more out of people without adequately compensating them for their work. People deserve to have jobs that enable them to lead productive and fruitful lives, to have health care, education, housing, security in old age and nurturing in youth. Our corporations and the government they increasingly seem to own appear to disagree with this notion, or at least refuse to take any responsibility for ensuring that it happens. Our technology, knowledge and work ethic make us capable of producing everything we need for all to live well. That we do not is a travesty of justice that needs to be rectified so that the products of our toil are more equitably distributed to all rather than hoarded by a few.

Further Suggested Readings:

The Expendables: How the Temps Who Power Corporate Giants Are Getting Crushed

Podcast: Rise of the Blue-Collar "Permatemp"

Predatory Capitalists

The Forgotten Americans

American CEOs make 273 times more than the average worker

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8 Comments
  1. Shifting employment from full-time workers with benefits to part-time workers without benefits is just another way of increasing corporate welfare. We need to get corporations out of our government. That’s the central issue around which almost all of our problems revolve. Capitalism negates democracy, free speech and justice. It feeds on fear, ignorance, greed, racism, religious intolerance and other evil. The sooner people wake from the delusional propaganda spewed by corporate media, the sooner we’ll have a civilized society. If ever.

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  2. Hiring workers as temps or part time either way it is to keep from giving benefits AND get the job done for businesses. In a humane society; It would be regulated. Honest businesses could form a group to keep workers busy & benefitted full time. Give it a whirl people out there in business land.

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  3. grant lemahieu permalink

    Right on. I worked for 2.5 years managing a contractor program onsite for large company. While many younger folks were getting a foot in door for job experience and potential full time hire, older experienced workers were really at a disadvantage. Like you said, 401k, affordable health care, paid time off benefits basically nil. Other modern economies that use temp firm models, at least have “parity laws” that require temps to have a compensation package similar to the fulltime equivalent peers….while some of what the temp model provides is valuable, much of what they do doesn’t even comply with IRS employee definition requirements. Finally, my consultants told me, over and over, that what they really wanted was full time employment where they could feel “part of the team”. As a contractor, you always have a feeling of unworthiness…isn’t belonging one of the basic human needs described by Maslow? Temp agencies do not provide that sense of team, family, belonging that makes work Human…

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  4. G. Thompson permalink

    Questions for politicians:

    For conservatives and/or Republicans: If the free market system is the best way of moving a country forward, what controls the sale and price of any item if the government is not controlling it? If the answer to that is the demand of the purchasing consumer, then I would ask: where does that consumer get the money to purchase that product? If that consumer’s money is provided by their employer in exchange for work or from the government as an employer of that person, or from the government as financial support, does it make that demand any less real?

    Question two: If in a free market system the government does not control how many employees a private employer hires or what they will pay those employees, what does? If the answer to that is the need of that employer to hire more employees to serve the demand of their customers and pressure of that demand to pay for the most qualified employees to best serve those customers, then why would that employer ever hire employees they didn’t need to, or pay any more than the minimum they can, unless the demand from question one increases?

    Question three: If in that free market system the number of employees an employer hires and how much they are payed is solely controlled by the amount of customer demand, then what benefit to the overall economy is gained by subsidizing the owners of any company or cutting their taxes if that money is not needed by that business for development of new products? If the driving force behind the free market system is the desire (greed) of the owner to obtain an income more than the common man along with the luxuries that come with that with no limits, then do you really think that that desire will be crushed by higher taxes? No religion on earth has ended greed, do you really think higher taxes would do it?

    Questions for liberals and\or Democrats: If you understand the answers to the questions posed to conservatives/Republicans, and understand that there is no long term detriment to our economy by not providing benefits to the rich in subsidies or tax cuts, then why would you go along with them unless you have been bought? As much as the worst thing we could do for our economy is to elect Republicans that believe in “trickle down” economics, do you really believe there is any benefit politically to allowing these policies to harm our economy, and no political reprisals for selling out. Think again.

    Liked by 1 person

  5. We do not require near as many workers as we did in the past. A new economic model will develop and it will not be the 40 hour/40 year work life. It is most interesting to see how the world will answer this challenge

    Liked by 1 person

    • The key is to make the transition without negatively impacting the standard of living for those people working less and using it s a method to make economic inequality even worse.

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  6. Four big EITLRs about this “permatemping” phenomenon:
    1. Highly effective discrimination coverup technique. (ever heard of “constructive termination” or “treadmilling”?)
    2. Highly effective coverup technique for cheating on H1B outsourcing permits. Some of the agencies even boast about it!
    3. Obstacle to homeownership; the smoking gun that this real estate bubble is going to CRA-, uh, I mean, have a correction, any minute now.
    4. It is wage scalping.

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  7. Another frightening trend for the “lower” middle class and below is the new reality of working the equivalent of TWO full-time jobs just to make ends meet.

    A few weeks ago I watched an episode of “Undercover Boss”. They spotlighted an extremely diligent and hardworking young black lady who ran some sort of Jamba Juice-type store. The CEO sneaked in his assistant as a mole, who posed as a new trainee. Long story short, we (and the CEO) find out about the young woman’s struggles; this single mom quit college to support her child and her father, who is her whole life, and she works ANOTHER full-time job at night at a bakery. But in the process, we learn just how amazing this woman is, not only following the Company Line, but innovating and improving upon it.

    So now it’s time for the CEO to make that Grand Gesture, and I’m thinking if I were the him, without question I’d pull her from the front lines and make her an executive inside my organization. Assistant VP of Marketing. Pay for her to finish her bachelor’s degree. Maybe even spring for her MBA. In my nearly 30 years of being in Corporate America, I understand how rare this kind of talent is, and when you find it, you nurture it and let it grow.

    So what did this CEO do? He gives her a fancy two-week vacation and $9,000. She breaks down and cries — shockingly — out of profound thanks and humility.

    WTF??? Does this a-hole CEO really think a single vacation and a measly $9,000 (literally pocket change to him) would transform the life of this insanely overworked single mother with PROVEN potential? Here’s an idea: PAY HER ENOUGH TO WORK FOR YOU FULL-TIME SO SHE DOESN’T HAVE TO WORK AT A FUCKING BAKERY AT NIGHT.

    I think what was most appalling about that episode was the absolute lack of shame this CEO had at being exposed to a national television audience as such an enormous cheapskate that a MANAGER of one of his stores can’t even make basic rent and utilities without additional outside employment.

    But the CEO was painted as a hero in this pathetic display of “generosity”. Disgusting.

    And so it goes. The Middle Class, slowly descending into economic slavery.

    Liked by 2 people

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