Is The U.S. Turning Into A Nation Of Temps?
Two sobering facts: The hiring rate of temp workers is five times that of hiring overall in the past year, points out Mediabistro, a media industry website. And the number of temp workers has been rising steadily since 2009 (as shown by this chart at the employee recruitment news website ERE.)
Who's moving to a temp workforce? Pretty much everyone. Just last week retail behemoth Walmart, with some 1.3 million workers, confirmed that its hiring strategy has changed, stressing a temp workforce. Before the year began, part-time workers only comprised 1 percent of the Walmart workforce, but now the figure is around 10 percent. As Fortune noted, the uptick in temp hiring during the financial crisis has also been apparent at large employers from across the economy, from colleges to internet technology firms.
What are the reasons for the shift? Here are three leading theories:
1. It's a reaction to Obamacare. Some, including the right-leaning Investor's Business Daily, have suggested that the high number of temp workers is proof that employers are replacing full-time workers "to lighten the burden of Obamacare's regulations." (Some of the Affordable Care Act's provisions have been taking effect since March 2010.) According to the law, employers are only subject to fines from the health care act once they have more than 50 full-time workers, and so, as the argument goes, companies have an incentive to keep their head counts low.
2. A temp workforce makes employers more competitive. In speaking to Reuters, Walmart spokesman David Tovar said the change was not related to the new health-care law. Instead, it was described as a way to cut costs when consumers are spending less during tough times. Crucially, the model is also thought to give Walmart an edge over other big box stores, such as Costco, Sears and Target, who haven't moved toward the temp workforce.
3. The financial crisis emboldened employers. Labor market analysts told Reuters that it's possible that employers are simply taking advantage of a favorable environment in which so many Americans have been out of work for so long that the unemployed don't have the luxury of waiting for good jobs with full benefits.
Erin Hatton, author of "The Temp Economy," told AOL Jobs that employers could be given incentives to reduce the size of their temp workforce. For example, if the "burden of [providing] health insurance were lifted" from employers, said Hatton (who's a professor of sociology at the State University of New York, Buffalo), it's likely that companies would not have to resort to such cost-cutting measures. Such an idea remains controversial, though, as it would require the government to step in and offer health care.
But Hatton warned that "if nothing is done -- whether it's because of workers themselves or people rallying on their behalf -- to force employers to put restrictions on temp workers, this practice will definitely continue to grow."
What do you think about the rise in temp workers? Share your comments below.
This story was updated on June 24 at 3:30 PM EDT with the quotes from Hatton.
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