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.

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