NOVEMBER 1996 · VOLUME 17 · NUMBER 11

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T H E    N E W    G R O W T H    I N D U S T R I E S

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"Just as the exchange floor provides a fluid, efficient forum for clearing the market for stocks, gold and pork bellies, the temp industry is becoming a clearinghouse for buyers and sellers of skills," the business magazine Fortune commented in an article last year.

The temp industry itself might not embrace that vivid metaphor. But critics of the industry say that Fortune got it right: The temp industry, they believe, treats workers as soulless commodities, portable "skill sets" that can be bought and sold for a profit, like pork bellies.

Business certainly likes the industry; corporate use of temporary workers is skyrocketing. According to the National Association of Temporary and Staffing Services (NATSS), the temporary help industry's receipts rose almost 13 percent last year, to a record high of $39.2 billion. Temporary employment increased almost 250 percent between 1982 and 1993 -- 10 times faster than overall employment growth.

Temping is no longer limited to secretarial work. About 40 percent of temps in 1995 were clerical workers, according to the industry, but 34 percent were industrial workers and 18 percent were classified as technical or professional. However, most temps still do relatively low-paid work. Most (72 percent) are women, under 35.

The nation's 7,000 temp agencies employ more than 2 million people annually. The Milwaukee-based Manpower, Inc. alone employs over a half million people a year (including workers who are only on the job a few days). By that measure, Manpower is the nation's largest private employer -- and its chief competitor, the Troy, Michigan-based Kelly Services, comes in second.

Big agencies like these are growing at a fast clip -- faster than the many smaller, local temporary help companies. They are also spreading overseas. Manpower is the leader in globalization, with a brisk business in Europe and Asia and a world market share of 15 percent. According to Manpower Executive Vice President James Fromstein, over half the agency's workers and half its sales are overseas. Kelly Services, too, is global.

Contingent on downsizing

The temp industry boom is part of the larger trend of increased employer reliance on "contingent employees" -- from "leased" staff to "contractors" -- to do everything from engineering to home healthcare. Business analysts prattle happily about how contingent workers give employers the "flexibility" they need to compete in a global economy.

There is a darker side to the rise in contingent employment, however. The practice breaches the postwar era's implicit employer-employee "social contract," which has provided workers with such perks as health insurance, paid vacations, pensions, a certain degree of job security, an ongoing social connection with co-workers -- and an opportunity to unionize.

What separates the temp industry from other contingent employment schemes is the existence of that third party, the temp agency. Temp agencies recruit, screen and deploy workers, selling their labor to employers, typically at a 40 to 60 percent "markup." (That is, an employer might pay $10 or $11 an hour for a temp who earns $7, and the agency gets the rest.)

The temp industry portrays itself as a beneficent partner to employers and workers alike, helping both to respond to changing economic conditions that are beyond their control. Businesses, in the words of one NATSS flyer, "to compete in an interconnected global economy, need to be flexible in all of their company operations; and temporary help and staffing services offer that flexibility."

But critics -- including many temps themselves and a growing network of scholars who study temp work -- do not see the growth of temp work as an immutable fact of life. Temp agencies aggressively promote themselves to employers to increase demand.

"The industry likes to say it's filling a need out there," says Dr. Jackie Krasas Rogers, assistant professor of Labor Studies and Industrial Relations at Penn State University and an expert on the temp industry. "But a lot of us are asking, `To what extent are the agencies creating this need?' Temp work is increasing because of the strategic decisions made by companies. It's not that workers have all of the sudden changed their minds and decided that they want `flexibility' in their lives."

The growth of the temporary industry is the flip side of the "downsizing" trend that has cut millions of workers from regular payrolls in the past decade. One survey by the Westbury, New York-based Olsten temp agency found that companies that used temps heavily were more likely to have undergone "staff reengineering initiatives." In the same survey, 54 percent of companies said they were understaffed -- and presumably ready to call dial-a-temp to the rescue.

The temporary advantage

Temps offer one big, undisputed advantage to employers: they are much cheaper than full-time employees with benefits. Most temps earn $5 to $8 per hour and cost their employers only a few dollars more in temp agency commissions. Any benefits temps do receive come through the agency -- some get holiday or vacation pay, but only a lucky few receive healthcare coverage or other benefits. And, temporary workers are a lot cheaper and easier to get rid of -- firing a salaried employee can cost a company tens of thousands of dollars. Firing a temp just takes a phone call, and creates no liability.

Temp agencies openly advertise that using temps can help companies avoid regulatory compliance problems. "The employment process is fraught with legal land mines," warns a NATSS pamphlet. "To learn where these perils lie and to avoid them, business organizations are relying on the expertise of professional staffing firms," which can ensure that workers have "all required coverages (i.e. workers' compensation, unemployment insurance.)"

Use of temps may also facilitate outright racial discrimination, charges Jackie Rogers. One temp worker told Rogers how employers and staff at a Los Angeles agency had used racial code words -- like "Kims" for Koreans or "Marias" for Latinos -- to describe temp workers the employers wanted screened out.

But there are subtler ways for employers to screen temp employees. "What does it mean when the employer tells the temp agency, `We want someone for the front office?'" Rogers asks. "They're really filtering out for a certain type of person -- usually white, middle-class and female." And if clients do get temp employees who do not meet their criteria, they can just send the employees back.

The temporary industry is vigorous in defending its policy of non-discrimination. "We have a very strong position on this," says NATSS spokesperson Bruce Steinberg. "Do not use a staffing company as a means to discriminate. That's blatantly illegal and is not to be done. We will send out the best qualified person, and will not accept a discriminatory job order."

Asked what happens if an employer repeatedly rejects temps who are black or Latino, while accepting white applicants, Steinberg replies that in that instance, "we're not discriminating -- we're sending over the best qualified person. They're the ones who are discriminating." He adds, "To say that we help them do that is ludicrous -- they'd be doing that regardless of us."

Fromstein says Manpower would cut off any employer who exhibited this sort of behavior. He insists this kind of employer bias is becoming rarer.

Nevertheless, temp workers themselves often suspect that they are being discriminated against. In November 1994, the Carolina Alliance for Fair Employment (CAFE) conducted what it called a "temp school" with 19 temps who had responded to an ad for temps in Greenville, South Carolina. Of the 19 temp workers who took part in the surveys and discussions, 14 said they believed the temp agency they worked with was "assigning jobs differently depending on the workers' gender, age or race." But it is almost impossible for a temp worker to prove discrimination.

Temporary workers are sometimes assigned unsafe jobs and work responsibilities. One temp interviewed by CAFE, for example, reported spending a day reaching into vats of caulking material with unprotected arms and hands and breathing in scorching vapor without any mask. But workers are usually only on the job for a few days, they do not know the rules, do not know whom to call about suspected infractions and are often desperate to have the job -- and to keep getting jobs from the agency. And so they are unlikely to report unsafe conditions.

The Oil, Chemical and Atomic Workers union launched a campaign against the use of contract workers in their industry after finding that some of the worst chemical plant and refinery accidents involved the use of contract workers. Says the union's legal counsel, Greg Mooney, "Part of the problem is that these workers don't receive the same training to handle emergencies as the regular union workers. And when an emergency happens, they're not able to even use the same language as the rest of the workforce -- and that can be very deadly."

Temp industry critics maintain that the very structure of the industry is to blame for many of the problems temps face -- like discrimination and unsafe working conditions. Although technically the temporary agency must abide by the same rules as any other employer, the agency is not on the job site to monitor conditions. And workers themselves are in a poor position to complain.

"That relationship between the agency, the client and the temporary worker reorganizes work and disempowers the worker," says Rogers. "This happens even in agencies with the best intentions. I've had agency staff tell me things like, `Look, we try to prevent abuses, but it's the client who pays us -- it's not in our interest to really take care of the temporaries. And it's easier to replace a temporary who is upset than it is to replace a client.'"

The perils of temping

Nevertheless, temporary agencies claim to offer temporary workers an invaluable service. Historically, the temp industry has portrayed itself as a help mate to mothers who need a work schedule that can accommodate childcare responsibilities. That profile does not fit the average temp today. A 1995 survey by the Department of Labor found that 63 percent of the temps wanted full-time, permanent work.

Still, a minority of temp workers really are looking for "flexibility," and in surveys temps often cite flexibility as a big draw. But some temps end up concluding that the temp employment system offers more flexibility to the employer and the agency than to the worker. Temps often say they feel compelled to take almost every job offered -- both out of economic desperation and out of fear that if they turn down a job, they will not be called again anytime soon.

Some temps report staying on at jobs where they had been insulted or subjected to racist comments, because they feared that their temp agency would not reassign quitters.

Temps often spend a lot of time sitting at home and wondering why the phone isn't ringing. Said one worker at the Carolina temp school: "They psych you up about what you can get. Then you don't know why you aren't getting calls." When a call does come through, temps often leap at the chance -- no matter how inconvenient the timing. There is often more than wages hanging in the balance: most of the temp agencies that do offer some benefits, like paid vacation, require temps to work close to full-time hours to qualify.

Rogers notes that even the minority of people who actually want to temp do not like the insecurity, low wages and limited benefits that go along with the job. "That word `voluntary' is tricky," she says. "If you're working in a contingent job because you don't have any other alternative -- say because you can't afford childcare -- is that voluntary?"

Recognizing that most temps would rather be working full-time, the temp industry has begun to change its pitch to workers. NATSS likes to say that the industry offers workers a "bridge to full-time employment." The idea is that temp jobs give workers an opportunity to showcase themselves to potential bosses -- without requiring any commitment from the boss.

A 1995 NATSS survey of former temps found that 64 percent of the ex-temps had found full-time jobs. The temps were more likely to find a job that was unrelated to their temping than they were to have been offered a job by a temp employer, however.

In his book Flesh Peddlers and Warm Bodies: The Temp Industry and Its Workers, Robert E. Parker says the temp industry's hype about full-time job opportunities is "significantly overstated." In fact, he notes, the practice of moving temps into full-time jobs is "formally and informally discouraged." Almost all agencies charge their clients a fee, usually $1,500, if the employer hires one of the company's temps within 90 days. Other agencies have temps sign an agreement not to accept a full-time job for a certain period of time.

Manpower's Fromstein says that his company does not penalize employers for hiring temps, calling that kind of policy "obsolete." He says approximately 30 percent of Manpower's temps get permanent jobs with employers who first hired them as temps.

But, like Parker, Professor Rogers is also skeptical of the promise of full-time employment through temping. "I call it `the myth of the full-time job,'" she says. "These things do happen. They happen just often enough to keep the myth going, and to keep people hoping. And it acts as a way to keep the workforce docile. Just put up with it, because your dream job could be just around the corner." Workers at the South Carolina temp school echo this -- most reported being promised a chance at a full-time job, but only a couple got real offers.

Short of finding a full-time job, the temp industry claims it often provides workers with a chance to learn new skills that are sought in the job market. Workers who "take responsibility for their careers" by "developing a portfolio of skills in demand by business organizations," an NATSS brochure explains, can "ensure themselves of the continuing ability to make a living." Temp agencies, the argument goes, can help workers gain these skills, both on the job and through training offered by the agencies themselves.

But the word from many temps is that the work they are assigned to do is repetitive and rarely offers them a chance to learn something new. Typical is one woman's description of her temp job in Bowdoin College Assistant Professor of Sociology Kevin Henson's book Just a Temp: "It was stacks of university applicants' applications. I mean, they came in stacks in numerical order. And I just had to take them off from a cart, unwrap the rubber bands from them, and put them in filing drawers. It was awful." "Boring" is one of the most common words temps use to describe their work.

Nevertheless, some workers do say they learn new skills, either on the job or directly through the temp agency. Increasingly, temp agencies offer training right at the agency. Manpower developed its own training software. In a NATSS survey, 35 percent of temps said they had received one to five hours of training from the temp agency in the past year; 30 percent said they had received over 20 hours of training. "We have proven over the years that workers do indeed have these skills after one day," says Fromstein.

"I don't doubt that there are some agencies that do okay in terms of training," says Jackie Rogers, "but a lot of them talk it up a lot more than the reality warrants. A lot of times what they've got is a computer that's a little bit past its time in the back room that you can come in and do tutorials on. But often workers can only come in to use them during working hours -- which is when most of them are hoping to be on a job."

Permanent disempowerment?

What Rogers and others criticize most is the way temping disempowers workers -- both economically and psychologically. Temping can be a huge drain on a worker's self-esteem: the work is low status, there are no ongoing positive social interactions with co-workers, and the relationship with the agency itself breeds insecurity. In his book, Kevin Henson describes the ways that temps try to compensate for the assault on their self-esteem. These coping mechanisms range from becoming "super employees" by doing much more work than employers demand to bending over backwards to "save the boss" from errors. Many maneuver to get longer-term assignments where they can become known and respected, and called by their name rather than "the Temp."

The same conditions that make temping psychologically disempowering also make it politically disempowering. It is next to impossible for temps to organize to improve their conditions, for obvious reasons: they are isolated, they are constantly shifting work sites and schedules and, for the most part, they are desperate for a job under any conditions. The temp industry does not have to advertise this fact -- employers know it well. In organized workplaces, temps are often used to do replace union jobs, thus diluting the union's strength. Temps are sometimes called in during a strike.

Nevertheless, unions have barely begun to strategize about how to organize temps. The legal system does not make it any easier: temps are in legal limbo land. The National Labor Relations Board has issued inconsistent rulings about whether or not temps can be included in the same bargaining unit as regular employees who are seeking to organize. The NLRB has also been spotty about acknowledging that temps have "joint employers" -- the agency and the client. This too has been an obstacle to temp organizing.

There have been a few unsuccessful attempts to legislate protections for temps. A bill introduced by Representative Pat Schroeder, D-Colorado, would have extended health and pension benefits of larger employers to temps. At the Carolina temp school, temps said the three most important changes they would like to see are a law requiring temps to be paid the same as full-time employees; national health insurance; and a requirement that temp agencies pay workers a certain minimum percentage of the fee they receive from employers.

Some worker advocates have suggested that the temp industry should be organized along the lines of the construction and plumbing industries. If a temp workers' union did the recruiting, training, hiring, dispatching -- and maintained workers' wage and benefit standards -- temporary agencies would be out of a job.