Temporary hires likely cause more damage than good
People are getting hired across the U.S. … in temporary work.
In fact, about 12 percent of people employed in the U.S. have their jobs on either a temporary basis or through freelance or contract work, according to the Associated Press.
AP reports the number of temps has grown by more than 50 percent over the last four years.
Employers say they are concerned about the stability of the economy, and temporary employees gives them some flexibility. An economist says companies want to avoid having too many employees should they need to downsize suddenly.
And for many who have been without work for some time, a temporary job can pay the rent and put food on the table, while also giving them added experience for their resumes.
However, temporary employment has a number of flaws. According to the AP, those workers usually receive low pay and few benefits, if any at all. And because the jobs are temporary or contract, there is no long-term job security.
The repercussions can be significant. If a temporary job comes without benefits, then there is no health insurance. There is no retirement plan or 401K. If there is a health emergency, then odds are that these temporary workers have to pay out-of-pocket for medical treatment, which can be crippling – and they likely will lose wages for the time it takes them to recover. It's likely that many of these workers are living paycheck to paycheck.
There are also issues for the businesses themselves. With temporary employees, a business loses institutional knowledge that comes with having long-term staff.
And, with each new wave of temporary employees comes a loss in time for the employer, as they must spend time looking for the temporary workers, and then training them once they are hired.
For many of these employers though, it boils down to money. Temporary workers provide a cheaper labor pool for businesses, which save money both in lower wages (which in turn means lower taxes paid by the business to the government) and little or no benefits.
But the situation is a dire one for the economy as a whole. The AP article points out that temporary workers are less likely to spend money back into the economy because their employment situation isn't long-term. Less money going back into the economy slows any form of economic recovery.
And not providing benefits for these workers can also have repercussions. Low wages can also lead to more dependency on government assistance programs.
The trend of temporary employees will continue to slow our economic recovery. Hopefully, employers recognize this, and move toward long-term employees again.