Obamonomy: Companies Look More Towards Temporary Jobs

The good news is, there are some jobs out there. The bad news is they are simply temporary/contractor positions

Temporary workers are starting to look, well, not so temporary.

Despite a surge this year in short-term hiring, many American businesses are still skittish about making those jobs permanent, raising concerns among workers and some labor experts that temporary employees will become a larger, more entrenched part of the work force.

This is bad news for the nation’s workers, who are already facing one of the bleakest labor markets in recent history. Temporary employees generally receive fewer benefits or none at all, and have virtually no job security. It is harder for them to save. And it is much more difficult for them to develop a career arc while hopping from boss to boss.

Actually, one of the bleakest labor markets in American history. Almost a year and a half after the recession supposedly ended, unemployment is still almost 10%, and people are still losing their jobs. Which Party has had control of the Federal government and most of the state governments over the last 2 years, and implemented policies, as well as proposed legislation, that not only did not help the economy, but hurt it?

This year, companies have hired temporary workers in significant numbers. In November, they accounted for 80 percent of the 50,000 jobs added by private sector employers, according to the Labor Department. Since the beginning of the year, employers have added a net 307,000 temporary workers, more than a quarter of the 1.17 million private sector jobs added in total.

I wonder why they would do that? Could it have something to do with a concern about which way the economy would move, and having to follow future federal mandates? It’s a lot easier to let a temp worker go than a regular full/part timer.

“With business confidence, particularly in the small business sector, extremely low,” said Ian Shepherdson, chief United States economist at the High Frequency Economics research firm, “it’s not surprising that permanent hiring is lagging behind.”

Low confidence? Gee, what would cause that?

Flexibility is another factor. Corporate executives, stung by the depth of the recent downturn, are looking to make it easier to hire and fire workers. And with the cost of health and retirement benefits running high, many companies are looking to reduce that burden. In some cases, companies wrongly classify regular employees as temporary or contract workers in order to save on benefit costs and taxes.

But people still tend to prefer jobs with some sense of permanence, and with full health benefits and some form of retirement contribution.

Mr. Rodeo, the Sacramento accounting manager, said he made anywhere from 10 to 50 percent less while working in temporary jobs than he did at the produce company. He has also been without health insurance all year. None of the interim employers or temporary agencies have contributed to a 401(k) plan, nor has he been able to save much on his own.

Are we starting to see a pattern here? Health insurance costs companies a huge amount every year. Remember back in the day when the big question was whether a company offered dental insurance as part of the package? Now, people wonder whether the company offers health insurance. Dental and vision are not very expensive to offer, health is off the charts, which is why many companies have moved/are moving towards Health Savings Account type plans, which, shocker, are limited thanks to the ObamaCare legislation. Companies are worried what else ObamaCare will do to them. They are worried about mandates and fines, and temporary workers/contractors are not covered by ObamaCare, since they are not permanent employees. If ObamaCare sticks around, you could see even greater hiring as temporary workers, who could be considered temporary 20 years from now, so as to avoid government mandates.

Obviously, health care is not the only issue at play, but, you know it is one of the top issues.

Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.

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