Is The U.S. Turning Into A Nation Of Temps?

frowning female office worker with chin resting on handHave you been wondering why it's so hard to get a full-time position with benefits? Everyone knows it's a bad economy out there, but if you've been struggling, new data may help you understand why. According to the Bureau of Labor Statistics, the total number of temp workers surged by 7.5 percent in the past year, to 2,679,800 in May. That's the highest it's been since it reached 2,767,300 in October 2006. So while the economy has been slowly improving, with more employers hiring, the reality is that many of the new jobs offer only temporary employment without benefits.

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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Mr. & Mrs. Tatro

The path that America is on, Is the end of The United States as we know it,All this time we have worried about foreign enemies destroying us and we are doing to ourselfs,Enviromentalist,Corrupt politicians,labor unions,ALL HAVE ONE THING IN COMMON GREED,Read the fall of the roman empire thats were we are going,In 100 years you wouldnt recognize this country,We are all just waiting to be Outsourced""""""""""""""""""

August 18 2013 at 8:12 PM Report abuse rate up rate down Reply
Jim Boss

Temps create an "at will" employment environment ... which in the theory the US is. ... but the reality is that over the years employment laws have bent enough in favor of employees that the only purpose of an HR department is reduce potential liability. Corporations say their people are their number one asset ... but the reality is that their employees are their number one liability ... contractactors/temps are great resources and they minimize the liability. ... right or wrong, this trend should be no surprise to anyone. ... if Obamacare makes purchasing healthcare on the individual market competitive with employer based plans then I would expect this trend to really take off. This isn't necessarily a bad thing ... contractor/temps can do quite will with a little bit of planning and execution.

June 25 2013 at 8:38 AM Report abuse rate up rate down Reply
son54csonny

This is in-line with loss of the Middle Class. Lower wages, fewer benefits, and less job security, equates to more poverty, increased dependency of government assistance programs, and a angry and frustrated public. Once the land of prosperity and opportunity, has become the land of uncertainty and lost will. We've been saying for years that this would happen, and now it looks as if the chickens have finally come home to roost. "The Washington Brotherhood" is on-track to accomplishing its' goal. The term "Global Economy" basically means "Equalization To The Lowest Level", and we're very very close to reaching that end.

June 25 2013 at 5:21 AM Report abuse rate up rate down Reply
Stephen Hinkle

I think the younger generation is going to be screwed when it comes to retiring when they get older.

June 25 2013 at 4:59 AM Report abuse rate up rate down Reply
anarcho

Actually the USA is reaching end of self life, let alone too many temps

June 25 2013 at 1:18 AM Report abuse rate up rate down Reply

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