The New Trend in Temporary Employment

The Times says short-term employment is on the rise--is that good or bad?

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Many U.S. businesses, operating in a climate of economic uncertainty, are hiring more temporary workers but not offering them full-time positions, Motoko Rich of The New York Times reports. The trend raises concerns that the workplace is undergoing a structural transformation in which short-term employees becomes a more deeply rooted segment of the labor force. While temporary workers are in better shape than the unemployed, Rich explains, they often don't enjoy the benefits, job security, and career development that full-time employees do, nor do they have as easy of a time saving money.

Around a quarter of all jobs added this year by private sector employers were temporary positions, Rich notes, compared with 10.9 percent in the comparable period following the recession of the early 1990s and 7.1 percent following the economic downturn earlier this decade.

Commentators are parsing the findings in different ways:

  • U.S. Is Following Japan Down a Troubling Road, states Yves Smith at Naked Capitalism. Like America, Japan is experiencing the rise of “freeters,” or temporary workers, though, in Japan, the problem is primarily affecting college graduates. She continues:

As with Japan, the long term implications of this trend are not good: employers providing lower-quality employment;, workers attaining less in the way of skills, which puts them on a permanently weaker career path; the resulting lower income workers less able to build up economic reserves in an era of weakening safety nets ... With far fewer social inhibitions against turning employees into temps, we can expect to see an even further hollowing out of the US economy.

  • What Is Incentivizing Employers?  "With temporary workers," says Joel Mathis at Cup O' Joel, "they get all the production--but without the same levels of pay, and certainly without having to pay so much for benefits ... The downside of that, of course, is that the economy won't get moving again until people start wanting to consume again. If you're in a 'temp' job, what will be your capacity--or inclination--to spend?"
  • Is This The New Normal? wonders William McKenzie at The Dallas Morning News: "I still would like to think that folks laid off in one industry could be retrained for a permanent job in another industry. But what if there just aren't enough jobs to go around and you have to work in a short-term position or a series of short-term positions?"
  • Fear Over Temporary Workers Is Overblown, claims Daniel Indiviglio at The Atlantic. It's normal for temporary workers to compose a large proportion of hires in the wake of a recession, Indiviglio explains, especially during this recession because it "was so long and so deep, and the recovery so fragile." What's more, it's unclear where Rich is getting her numbers when she compares today's short-term hiring with previous recessions:
This year began six months after the recession technically ended (in June 2009). If you look at the early 1990s recession (which ended in March 1991), a comparable period would be October 1991 through August 1992. Over that period, a whopping 41.2% of new jobs were temporary. That's far higher a portion than the 26.2% for this recession. The 2001 recession is harder to analyze, since jobs didn't begin to consistently grow for 20 months after the recession technically ended.
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