RED-BLUE AMERICA: 'Temp' economy now permanent?
Jobs are much less permanent than they used to be. A recent investigation by the nonprofit journalism group ProPublica finds that for millions of Americans, “temporary work has become a mainstay of the economy.”
The U.S. Department of Labor last month reported that 2.7 million Americans did temp work, and nearly one-fifth of the job growth since the recession ended officially in 2009 has been in the temporary sector, the ProPublica story notes.
Are recent job trends temporary or a more permanent feature of the U.S. economy? Can policymakers do anything to help long-term employment and economic growth? Ben Boychuk and Joel Mathis, the Red-Blue America columnists, weigh in.
BOYCHUK: Traditionally, a sharp increase in “temporary” hires has led to more permanent hiring in the private sector. But if we’ve learned anything from the Great Recession, this recovery — the most anemic in U.S. history — is anything but traditional. Terrible public policy made the recession “great.” And terrible policy is making the recovery lame.
ProPublica’s special report on the robust growth of the temporary job sector reveals a great deal more, perhaps, than its authors intended. The story focuses on “temp towns,” which are “often dense Latino neighborhoods teeming with temp agencies.” That’s an interesting detail, coming at a time when a bipartisan group of U.S. Senators voted to greatly expand the number of foreign workers from Mexico and Latin America.
Evidently, the “jobs Americans won’t do” now include manufacturing, warehouse work and retail sales, if Labor Department statistics on temporary help are any indication.
The ProPublica story also points out how the burgeoning world of temporary work “insulates the host companies from workers’ compensation claims, unemployment taxes, union drives and the duty to ensure that their workers are citizens or legal immigrants.” And don’t forget health insurance! Companies such as Applebee’s, Denny’s, Papa John’s Pizza and Darden Restaurants (which owns Olive Garden and Red Lobster) have all announced they would cut hours to avoid the employer-mandates under the woefully misnamed Affordable Care Act, better known as Obamacare.
An explosion of temporary hires, in short, is a symptom and a consequence of bad policy. For a few years now, Republican lawmakers claimed that “regulatory uncertainty” was holding down job growth. Clearly, that’s not the case. The problem the U.S. economy faces today isn’t uncertainty, but rather the certainty of Obamacare to raise insurance rates; the certainty of the Dodd-Frank law’s unaccountable and overreaching “consumer protection” rules to raise compliance costs; the certainty of the Environmental Protection Agency’s “war on coal” to raise energy prices; and on and on.
So it’s no mystery why temporary hiring is way, way up. The real mystery is why Congress and the administration continue their anti-growth policies — and why Americans still tolerate them.
MATHIS: For as long as capitalism has existed, there’s been one surefire way to maximize profits: Keep worker compensation as low as humanly possible. Money you don’t pay employees, after all, is money you can keep in your own pockets.
Republicans would have you believe that the emergence of millions of super-low-paying temporary jobs is the fault of government — of requirements that companies do unfair, anti-growth things like “pay a fair wage” and “not kill their employees.”
You’d almost think that American history wasn’t full of examples from the pre-regulatory era of (for example) mine owners treating miners as virtual slaves, keeping them isolated in company towns and in debt to the company store. And you’d think that, even now, Wall Street didn’t regularly respond to a company’s workforce reductions with an increase in stock price.
You’d think that CEOs, trained to maximize profits and stock prices, wouldn’t respond to such incentives by cutting, cutting, cutting wherever they can. “Do more with less” isn’t just a pithy slogan: It’s capitalism’s organizing principle.
Is there a policy failure here? Sure. For more than 30 years, it’s been the policy of Republicans to undercut and undermine unions wherever they exist. American workers were, collectively, at their most prosperous when unions were at their strongest — because unions offered workers a counterweight against the relentless forces of downsizing-to-maximize profit. Now unions have been largely emasculated, and America is returning to Gilded Age standards of income inequality. That’s no coincidence. (And capitalism, it should be noted, also thrived in America when unions were at their most powerful.)
So there are two rational responses to the rise of the “temp economy.” Increase regulations and the safety net so that employees can actually survive on the compensation offered by such work. Or officials can choose to unleash unions again and let them face off against CEOs on roughly equal terms.
The “temp economy” isn’t an accident: It’s the obvious next stage in American capitalism. But it’s a lousy stage. And getting rid of regulations isn’t the answer.
Reach Ben Boychuk at bboychuk@ city-journal.org, Joel Mathis at joel firstname.lastname@example.org.