Temporary jobs on rise in today's shifting economy

Labor leaders, economists worried because contract workers have less job security and therefore contribute less to the economy
Associated Press
May 20, 2014

 

While the U.S. economy has improved since the Great Recession ended five years ago, part-time and "contract" workers are filling many of the new jobs.

Contract workers made up less than half of one percent of all U.S. employment in the 1980s but now account for 2.3 percent. Economists predict contract workers will play a larger role in the years ahead.

They are a diverse army of laborers, ranging from janitors, security officers, home-care and food service-workers to computer programmers, freelance photographers and illustrators. Many are involved in manufacturing. Many others are self-employed, working under contracts that lay out specific responsibilities and deadlines.

Labor leaders and many economists worry. Contract workers have less job security and don't contribute to the economy through spending as much as permanent, full-time workers. Nor do they have the same job protections. Few are union members.

"It is not hugely clear that we're coming into a temp-worker, contract-worker, contingent-worker nation. But it's something to keep an eye on," said Heidi Shierholz, an economist with the labor-oriented Economic Policy Institute. "There's definitely been an increase in the share of those working part time."

Part-time and contract jobs in the past tended to rise during recessions and recede during recoveries. But maybe no longer: Part-time workers have accounted for more than 10 percent of U.S. job growth in the years since the recession officially ended in June 2009. Meanwhile, union membership has been sliding steadily since the mid-1980s.

Businesses often hire contract workers or freelancers because it is less expensive than hiring full-time workers.

"Workers increasingly serve businesses that do not officially 'employ' the worker — a distinction that hampers organizing, erodes labor standards and dilutes accountability," said Catherine Ruckelshaus, general counsel for the National Employment Law Project, which advocates on behalf of low-wage workers.

Many business leaders have a different take.

"Some people don't want to be a full-time employee. They want contract work," said Bruce Josten, executive vice president of the U.S. Chamber of Commerce. Still, Josten recognizes some of them "are hoping the contract work will ultimately lead them into a full-time position."

A recent Federal Reserve study showed that nearly 7.5 million people who are working part time — contract workers included — would rather have full-time jobs.

Jerry Jasinowski, who served as president of the National Association of Manufacturers for 14 years and later as president of the Manufacturing Institute, said despite criticism leveled against contract workers from some quarters, "I think on balance, they are a positive reflection of the extent to which production has become much more flexible, a reflection of hybrid operations. Some people don't like it. But that's neither here nor there. That's where everybody's moving."

Analysts suggest the increase in contract and "temp" jobs will likely accelerate as more baby boomers retire from their full-time jobs.

Pressure from a company's shareholders — often focused on short-term returns — can also lead businesses to lower labor costs by reclassifying a portion of their payroll as part-timers or spinning them off to a contracting agency.

The online job site CareerBuilder.com, which specializes in "contract placement," cites research showing that 42 percent of employers intend to hire temporary or contract workers as part of their 2014 staffing strategy — a 14 percent increase over the past five years.

The issue got the spotlight when President Barack Obama in February unilaterally upped the minimum wage for federal contractors and their employees from $7.25 to $10.10 an hour, fulfilling a top demand by liberal lawmakers and groups. The higher rates kick in Jan. 1.

"America does not stand still, neither do I," Obama said. Aides said more than 2 million employees whose companies have federal contracts are affected. Obama's proposal to raise the minimum wage nationally by the same amount remains bogged down in Congress.

A recent Brookings Institution study labeled the first decade of the 21st century a "Lost Decade" for the labor market. For the first time since World War II, the U.S. economy did not have more payroll jobs at the end of a decade than at the beginning. And the shadow of the December 2007-June 2009 recession still looms over today's labor market.

Comments

The Hero Zone's picture
The Hero Zone

There's a lot of wringing-hands and "mystery" here, yet major (and in my opinion obvious) contributors to this phenomenon weren't even scratched upon. I think this article was the equivalent of your friend coming up to you saying, "Dude, smell this! It's so gross!" then offering it to you to sniff without an explanation of what it is (or was...).

downthemiddle

The article starts with "labor leaders are worried..."

The ONLY thing labor leaders are worried about is the dues they're not getting from contract workers to support their flagging membership numbers.... which supports their fat salaries and internal corruption.

Darwin's choice

And contract workers usually don't receive benefits/insurance.

"Thanks" to obamacare!

bnjjad

Do you know what a contract worker is? I have been a contract worker for 7+ years (and some of my clients have been with me since the beginning), Obama care has nothing to do with it. I choose to work for myself. It is up to me to pay my taxes, obtain my "benefits" and insurance and everything else that comes my way as well as Market myself so I can do those things. My benefits: Vacation whenever I feel like it and my choice of insurance.

Darwin's choice

28 years. So, yes, I do. Do you have any idea how many more "new" contract workers are joining the force? And, obamacare is causing many companies to cut back on "full" time workers.

big_d

They never did.

Contango

Hell, even Fed Chair Yellen says that the "recovery" is shaky.

Cos. are holding cash on their balance sheets and doin' as little capital spending as possible.

Much of the cos. profit has been due to downsizing.

Many got burnt during the financial crisis. If they need to lay-off workers quickly again, temps are the easiest to let go.

Dr. Information

How many people are going to be butt hurt when all these fast food places go from person to Kiosk.

downthemiddle

Call that an ''unintended consequence'' of liberals trying to buy votes with taxpayer money.

Actually, it's the most graphic proof that dems/libs are more interested in votes than helping the little guy.

ram03

Truth! I was a contractor for 3 yrs for a large satellite tv provider. I made way more money than the employees made. It also meant I had to provide all of the materials and fuel to complete my installations. I enjoyed working this way until they started treating me like an employee. At that point I went on to find a more fulfilling full time job with a small home security company. Unions are dying and they will do anything to stay afloat. The sham is up.

MrGadfly

Contract workers are just independent business people. They possess the same ability and consequences as any small business.

They can charge whatever the market will bear for their services. They can decide when and how much they want to work. They are responsible for all costs, taxes and income.

Is this bad ? Not to those with a work ethic and an spirit to be in charge of their lives.

For those who need someone else to make their decisions its scary.

deertracker

This is about greed. You small business owners have to know it is cheaper to hire part time or contract labor. Has nothing to do with Obamacare or unions either. This has been happening for years. It's all going to backfire. Watch!!!!

Pete

When are you starting your business paying $15 an hour minimum plus bennies? If you are bound and determined to force things on employers, I first of all suggest you become one.

I'll be at the auction after you fail. Hate to miss a bargain.

deertracker

It's about greed! Plain and simple!

Pete

When is your opening day?

You sit back every day and complain about the evil business owners and how they have limited you and your existence. So do something about it. Start your own place. Heck post up the opening date and I'll personally be one of the first in line.

But in typical liberal style you will not do it. You will however expect someone else to do it for you.

Contango

Re: "greed!"

And you're not greedy? lol

wasthere

Greed or survival? You are the one that is "plain and simple". Why don't you start a business instead of flapping those large lips every day? You will find it isn't easy or as profitable as you think fool.

Dr. Information

You have to understand the likes of deer and coaster and dog. They are so use to the scheme of printing and borrowing their way out of debt (doesn't work) via this administration that they actually think small business owners can do the same.

I wish I had a printing press in my back room every time an employee asked for a raise or for increased benefits.

These clowns are just that. They sit back, plug their ears, say what they want and have nothing to back it up nor want to listen. 3rd grade mentality we are seeing here.

capcap

I am one of those part time worker's, 6yrs now...with 2 different job's and no one hired me FULL TIME!!!!!! They work you when they want and treat you like s**t. One was healthcare and they other is retail. I am 53yr with 30yrs experience in factory work. We all know where all them job's went. So here i am on foodstamp's, and going to the foodbank's to eat. The waiting list for metro housing is 4yrs in sandusky. Suck's to be me!!! Thanks AMERICA!!!

MrGadfly

capcap,

Did someone force you to work in a factory for those 30years? Did someone keep you from obtaining further education during those 30 years? Did someone guarantee you a job for the rest of your life?

You have yourself to blame for your lot in life. Grow up.

Florence Nightingale

Well, judging from the quality of writing, capcap doesn't exactly appear to be college material.

Contango

Re: "I am 53yr with 30yrs experience in factory work,"

Jobs are available in oil and gas production in states like TX and ND. Move.

You're either a victor or a victim - the choice is yours.

Dr. Information

I have 2 family members who moved to TX for this exact reason. It was a make or break deal but now he makes 3x what he did in Ohio and is living comfortably. AND the weather is much better.

MrGadfly

Deertracker,

Greed for who ? The independent business person who has the ability to charge whatever cost they wish to provide the service?

It seems to me that the country is moving to a business model where those who wish to apply themselves can achieve whatever they wish. Say goodbye to the company store, company homes and slaves to the company.

deertracker

The corporations and business owners are greedy. We all know any labor savings goes directly to the bottom line. While they are charging whatever they want they are simply over indulging. Just a fact!

Pete

Start!
Your!
Own!
Business!

Moocher...

deertracker

Tell us all about your business so we know where to avoid!

Pete

Our firm automates production and packaging lines for industrial customers. In other words, we put moochers such as yourself out of work.

What business are starting? Have you completed your business plan yet?

deertracker

Moochers like me out of work?? Hilarious!

Pete

It's easy to put moochers out of work. Brainless drones who can't form a thought on their own.

You fit that category very well.

wasthere

Don't say "we" deertracker. You sure don't speak for me or a lot of others.

deertracker

Go lay down!!!!!!!!!!

Pete

What's wrong, getting your hat handed to you making you testy?

Grab some peanut butter and head over to Big Dog's basement. You two can have some fun!

deertracker

Sounds like PeteR Pan is a freak!!

The Big Dog's back

He speaks for me.

Pete

Considering you can't come up with a sentence over six words without plagiarism that isn't saying much.

MrGadfly

Deertracker do you work? Do you get paid ? Then you must be greedy.

Think of all those who don't work that deserve your money. Stop being so greedy and hand it over.

Contango

deertracker used to have "investments, " but some broker "stole" them from him.

He was "greedy," but somebody else was "greedier." Story of his pathetic life as a victim.

deertracker

Please respond to my comments only if you have an intelligent and relevant thought.

Pete

You calling for an intelligent and relevant thought is hilarious! When was the last time you had one of those?

deertracker

Scram!!!

Pete

Not going anywhere. So you might as well get used to it.

Now go back to your mindless drone of an existence, and leave thinking to the big boys.

deertracker

Beat it!

Contango

Re: "intelligent and relevant thought."

And you think that calling others "greedy" when you're equally "greedy" is intelligent?

lol

Always the victim aren't you?

deertracker

Detox much?

Dr. Information

deer's losing it.

JMOP's picture
JMOP

Yet there is an article above stating it's harder for teens to find a job.

I've noticed in the last few years, more men in their 30's-40's working in restaurants, grocery and retail stores. Almost before predominantly held down by working moms and teens.

I'm with HeroZone on this one. I'm not one to believe just because it's in print, I have eyes, and can see what's going on in the real world.

ohioengineer

The American economy is always changing. We started as an agrarian society with most jobs being farm based. Then cities grew and small craft-based businesses became a primary employer. Then came the assembly line with its thousands of employees. It is this dynamic ability to change that has made America the economic powerhouse of the world.

All of these changes proved to be beneficial for the country in the long run. Yet at each step there have been those who have decried the changes. For example, liberals once denounced factory jobs as dehumanizing. Now they are crying crocodile tears for the demise of these same jobs.

Bottom line: an economy must change to thrive and even survive. Just ask the old Soviet Union what happens to an economy that can't or won't change.

KURTje

That's okay - I got mine attitude will hit your children hard.

looking around

For as much as some folks here think that they are in the cat bird seat ranting about people needing to get a higher education, start their own business or otherwise "better" themselves, I guess it has not occurred to them that an important part of the equation of their success is labor. It is the cost of that labor that scares them, they have a hard time placing value on it even that they know they would fail without the availability of simple labor.

Everyone is not cut out to be a CEO, same as everyone is not cut out to be a factory worker, garbage man, cop, teacher, fireman, bartender, taxi driver, landscaper......you get the drift. It's not as simple as "go start your own business" but without the ability for a person who is ready and able to gain employment with a living wage you captains of industry would be $hit out of luck. The fact is you rely on labor more than you would like to admit and the thought of the national minimum wage being increased just scares the devil out of you.

If the push to raise the wage is successful you will have to decide your own fate....suck up and pay or close the doors which may be like cutting of your own nose to spite your face. Trust me, their is someone in the wings ready to pick up where you leave off, unless what you do in business is not as big of deal to the world as you seem to think. Guess who will provide the labor and know how.....those same people that you felt weren't worth you considering them a valuable asset to your business.

Some of you will say they will be beating down my doors and standing in line to work for the wage I offer and those who don't think so can walk out the door. I'm betting that attitude will not serve you or your customers well.

When I was in business I occasionally found it necessary to go to outside vendors for support, I always visited the vendor personally to get a feel of how he/they did business. I would start in the parking lot to see if the employees drove decent vehicles, a good indication of pay scale. Next I would asses the facility, equipment and general maintenance. If the shop was small enough I liked to take a tour of the plant floor with the owner himself or at least the top manager to see how his demeanor was with his labor, I could easily spot things he wouldn't have guessed I could see. I always made it a point to speak with various floor workers to get a sense of their capability's, knowledge and attention to quality. It was these people who sold me on doing business with any company I visited.

I incorporated that into my own dealings with potential customers giving them much more than the "wide isle" tour I introduced them to employees who would be directly involved with the services we offered. My workers were my greatest sale asset. It was my job to support them and if I did my job success was eminent.