Our new report, “The Age of Contingent Employment: How changes in employment relationships are impacting worker wages, power and prospects”, highlights the explosive growth of the use of temporary staffing agencies to supply workers and how that harms our economy. Meanwhile, a heart-wrenching piece on the Huffington Post today shows just how devastating temp work can be for workers (and their families) who have no other options but to accept temp jobs.
The article tells the story of Jeff Lockhart Jr, a Virginia man who got a job at the new Amazon fulfillment warehouse outside of Richmond after a long period of unemployment and died on the job a couple months later. Although he worked at the Amazon facility, he and most of his colleagues were temp workers hired, supervised, and paid by a temporary staffing company. The article also explains why the use of temps by large companies is on the rise.
When it comes to low-wage positions, companies like Amazon are now able to precisely calibrate the size of its workforce to meet consumer demand, week by week or even day by day. Amazon, for instance, says it has 90,000 full-time U.S. employees at its fulfillment and sorting centers—but it plans to bring on an estimated 100,000 seasonal workers to help handle this year’s peak. Many of these seasonal hires come through Integrity Staffing Solutions, a Delaware-based temp firm. The company’s website recently listed 22 corporate offices throughout the country, 15 of which were recruiting offices for Amazon fulfillment centers, including the one in Chester.
This system isn’t unique to Amazon—it pervades the U.S. retail supply chain. Many companies choose to outsource shipping work to so-called third-party logistics providers, which in turn contract the work to staffing companies. At some of Walmart’s critical logistics hubs, multiple temp agencies may be providing workers under the same roof. The temp model also extends far beyond retail. The housekeeper who cleans your room at a Hyatt hotel may not work for Hyatt, but for a temp firm you’ve never heard of, for less money and fewer benefits than a direct hire. “It’s the standard operating model,” said Nelson Lichtenstein, a labor historian at the University of California, Santa Barbara. “The entire service economy is based on this kind of hyper-flexibility. If you don’t have it, it sends costs way up.”
For employers, the appeal of this system is obvious. It allows companies to meet demand while keeping their permanent workforce at a minimum, along with all the costs that go with it—payroll taxes, benefits, workers’ compensation costs and certain legal liabilities. 1 (When Amazon warehouse workers around the country claimed they were victims of wage theft in a Supreme Court case last year, Integrity, not Amazon, was named as the defendant.) For employees, though, it means showing up to work every day with the knowledge that you are always disposable. You are at least one entity removed from the company where you work, and you are only as good as your last recorded input in a computerized performance monitoring system. In the event that something goes wrong in your life—illness, injury, a family crisis—you have few, if any, protections. And yet for Americans like Jeff, this precarious existence now represents one of the only remaining potential paths to a middle-class life.
Unfortunately, our research shows that temp work is growing faster in North Carolina than in the nation as a whole and that temp workers earn less than the average North Carolina worker. Temporary work as a share of overall employment is likely going to continue to grow, but North Carolina policy makers can take steps to protect our economy and our workers from the harmful effects of this trend. A good starting point would be to adopt legislation that requires business to provide the same wages, benefits and safety standards to temps that they provide to their regular employees. For more suggestions, check out our report.