Thursday, August 15, 2013

Looking Into the Rise of Temporary Employment

By Jonathan Miller, Project Associate.

The Atlantic Cities recently ran a story under the headline “Is the U.S. Turning Into a Nation of Temps? Depends on Where You Live.” The author, Richard Florida, who is well known for his work on the Creative Class, writes that the rise of temporary employment is increasing and is further undermining the low-wage and low-skill employment that has led the growth of jobs since the end of the Great Recession. Florida acknowledges that temporary employment accounts for a small chunk of overall national employment (less than two percent), but that it has grown rapidly since 2009, accounting for 19.5 percent of total employment growth. It should be noted that temporary workers also include those who are actual employees of temporary employment agencies, thus the overall temporary workforce is a bit smaller. The article centers on the geography of the temporary workforce, but stops short of asking an important question: who are the temporary workers? To find out, I used data from EMSI, the same service Florida used for his analysis. Here is what the data revealed:

First, temporary workers tend to be much younger than the average worker. Of the 2.6 million temporary workers in the U.S., 45 percent are under the age of 35, with the largest age group being between the ages of 25 and 34. Workers under the age of 35 in the wider economy only account for 35 percent of all workers.
Second, temporary workers tend to be male. The national economy has a workforce that is pretty evenly split between men and women (51 percent and 49 percent, respectively). Among temporary workers, males account for 56 percent of the employed and females account for 45 percent.
Third, temporary worker tend to work in occupations that require manual labor. The largest occupation group within the temporary workforce represents those employed as Laborers and Freight, Stock, and Material Movers. These workers account for 12.5 percent of those employed by temporary services. Team Assemblers are the second largest group, accounting for 5.7 percent of all temporary workers. Further, six of the top 10 occupations are related to the manufacturing, transportation, or construction sectors.
Fourth, temporary workers tend to be in occupations that require lower educational attainment levels. Of the 23 occupations that account for at least 1 percent of temporary workers, only five (Registered Nurses, Nursing Assistants, Licensed Nurses, Human Resource Specialists, and Substitute Teachers) require a post-secondary degree. The other occupations require short-term or moderate-term on-the-job training.
Fifth, temporary jobs tend to be low-paying jobs. Of the top 23 occupations (which all account for at least one percent of total temporary employment) only three had median hourly wages above the national average (19.78 per hour, which at 40 hours per week and 52 weeks per year is $41,142).
So, what does all this mean? Well, it certainly supports Florida’s assertion that the jobs that are coming back are not the same ones as prior to the recession. Many of these jobs are manually-intensive, require little skill, offer little to no job security, and fall within sectors that tend to be highly cyclical and affected by economic instability. Despite this, Paul McDonald, a senior executive director at staffing firm Robert Half, believes that temporary workers will continue to make up larger shares of the economy and could reach as high as 3 percent. The agility and flexibility that temporary employees offer employers is continuing to be an advantage as companies continue to be hesitant to hire.