In today’s economy, working a temporary job has become more and more popular. And what’s more: the demand for temps is higher now than it has ever been. But that doesn’t mean that temping is thought of as the ideal career.
The temp industry is now providing work for about 2.9 million people. This makes up over 2% of the total workforce. An industry group called the American Staffing Association estimates that in 2015 it generated more than $120 million in revenue. Our country began recovering economically in 2009. Since then, almost one in ten net new jobs can be attributed to temporary employment.
Temping may have increased, but the quality of the temporary jobs has decreased tremendously. Temping has gone from something that educated people do to earn a little extra cash to something much less favorable. Temp agencies are now viewed as second-rate employers, which they weren’t in the 1960’s.
Now, temporary workers are often high-school dropouts. Eight percent of temps have an advanced degree, while 12% of permanent workers have an advanced degree. Temporary workers earn 20-25% less than permanent workers. In 2014, 15% of temporary workers lived below the poverty line compared with only 8% in 1970.
These conditions have led to a stigma associated with temporary employment. Temping jobs are only sought out as a last resort. While industry boosters often claim that working as a temp gives one added flexibility, the census paints a different picture. In 2005, the most recent year the Census Bureau thoroughly surveyed temporary workers, more than half of them stated that they were working as a temp because it was the only work they could find. Eight in ten stated that they would rather have a permanent job. A 2013 survey conducted by the Federal Reserve showed that a large portion of temps feel they are overqualified for their jobs.
While temps only make up 2% of America’s workforce, there is a lot of variation at the local level. Certain pockets of the country have much larger amounts of temporary workers than others, and the trend of high proportions of temp work prevails throughout these areas. This suggests that temping agencies are being utilized to lower labor posts, rather than simply to even out fluctuations in demand.
Both temporary and permanent workers are being affected by the increase in ill-paid temp work. Taxpayers now often have to bear part of the prevailing wages and healthcare costs that employers of temps avoid. This occurs in the form of increased spending on food stamps, Medicaid and other welfare. Fourteen percent of permanent workers participate in at least one of these programs, compared to 26% of temporary workers.
The growth of the temping industry is also impacting labor markets in a few positive ways. Temping reduces the unemployment rate by offering positions to those who might be unemployed otherwise. Temps also claim to improve job stability by insulating permanent employees from downturns in the business cycles.
While these positive effects may occur with regard to some individuals or companies, a paper published by David Petula of Stanford University in 2013 shows that permanent employees who work alongside temps are more concerned about job security. They also have worse relationships with coworkers and managers, and are less proud of their company. A 1999 study published by Mr Katz and Alan Krueger of Princeton University found that state that had more temporary employment in the late 1980s ended up experiencing lower wage growth in the 1990s. This trend has continued in later years. Wages of permanent workers grew an average of 3% a year between 2000 and 2015 in states with less than 2% of the workforce employed by temping firms. States with a higher proportion of temp workers experienced wage growth at an annual rate of 2.6%.This shows that the use of temping agencies leads to a decrease in well-being for the general public.