Why Hire Disgruntled Employees When You Can Rent Temp Slaves?

My father went to work for a company at the age of 26 and stayed there until he retired at 62. One man, one career, one company. His health insurance was provided as an employee benefit and he retired with a defined-benefit pension.

I had half-dozen employers throughout my career as well as stretches of self-employment. Frequently I had to obtain health coverage outside of employment and everytime I had a retirement plan the pressure of budget reductions resulted in it being dropped.

Employment isn’t what it used to be. I expect many of those working today won’t even have the job security that I’ve had. Instead of multi-year contracts, workers today can expect shifting job assignments in one year. The following reports on the Temp phenomenon.

The nature of employment is changing. Employees are
increasingly seen as liabilities rather than assets, and
so workers are kept at arm’s length from the companies
they ultimately serve. Middle-class long-term jobs are
shifting to precarious, low-wage work. These contingent
relationships include temporary and subcontracted
workers, whose ranks have been growing over the past two

In California, almost one-quarter of a million people
worked in the temporary help services industry in 2010;
another 37,000 people worked for employee leasing firms
totaling 282,000 workers in these two industries. This
accounted for approximately 2.0 percent of all non-farm
employment in California in 2010, approximately the same
ratio as for the U.S. as whole. Employment services
workers span a wide range of occupations, from
professional white collar occupations like nursing,
accounting, and computer programming, to blue collar
work in transportation and material moving, housekeeping
and landscaping, and manufacturing.

Temporary workers face lower wages, fewer benefits, and
less job security. Temporary and contingent work by its
very definition is less secure than full-time direct
hire work. This lack of stability has implications for
workers’ wealth, health and well-being. Temporary
workers are not compensated for their willingness to
accept less reliable work; instead they tend to face
lower wages than their non-temp counterparts. Median
hourly wages were $13.72 for temps and $19.13 for non-
temps in California in 2008-2010. Controlling for the
type of occupation as well as personal characteristics
of workers such as age, education, race, sex, and
English proficiency, temps make about 18 percent less
per hour than their non-temp counterparts. The wage
differential is even larger for blue-collar workers.

Temporary and subcontracted work presents two basic
public policy problems:

Temporary and subcontracted arrangements erode
wages. These lowered wages mean that contingent
workers rely more on the state safety net. Temps in
California were twice as likely as non-temps to live
in poverty, receive food stamps, and be on Medicaid.

Temporary and subcontracted arrangements undermine
existing worker protections first by allowing
employers to avoid certain worker provisions, and
second by making enforcement of the remaining
protections difficult. The ability of some employers
to avoid paying into the system of employer-provided
worker benefits disadvantages both high-road
employers who hire directly, and contingent workers
who receive only limited worker protections. Even
these more limited worker protections can be elusive
for contingent workers who are particularly
susceptible to employer retaliation.

Solutions to the problems of temporary and subcontracted
work range from efforts to increase low wages generally
to mandates to pay temps and non-temps the same wage. In
addition, policies to combat retaliation and hold other
actors in the supply chain accountable are promising
ways to uphold existing worker protections in the face
of workplace changes.


See full report at http://laborcenter.berkeley.edu/jobquality/temp_workers.pdf


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