Assembly and fulfillment jobs are increasingly handled by contract laborers instead of permanent employees. Is this necessarily a bad thing for the economy?
Some analysts are looking hard for positive trends amid the U.S. Department of Labor’s latest unemployment report, and they’re hoping that one such indicator is the increase in temporary employment.
As USA Today reporter Paul Davidson notes in his July 10 article, while U.S. employment figures essentially remained stagnant by adding only 80,000 new jobs in June, the increase in the number of temp workers by 25,000 could be a harbinger of better times on the horizon. Davidson writes:
The hiring of temporary employees traditionally augurs the addition of permanent staff. As employers grow more confident about their own needs and the economy, they convert contingent workers to staffers after several months, or bring on other employees.
Diving even deeper into the details provides additional cause for optimism; over at The Record, which serves northern New Jersey, staff writer Hugh Morley gets a local investment expert to look at the increase in the average number of hours worked each week by temps and concludes that it’s the equivalent of “about 300,000 new jobs.”
The conventional question to ask now is whether or not these companies will have enough confidence in the economic recovery to convert these temp workers into full-time employees; or will they continue to hedge their bets by utilizing contract labor? But in the wake of the sweeping changes currently taking place with America’s healthcare system, and corporate tax breaks from both federal and state governments designed to end outsourcing jobs to offshore operations, maybe the conventional answer to such a question is no longer the correct one.
Time and again, stories about the economic recovery hearken back to this February post, where an Ohio economist named Daniel Meges tells the Columbus Dispatch that even as manufacturing jobs return to the United States, the traditional model of a company taking care of all facets of production under the roof of a single factory is outdated. Meges says a more likely scenario is “smaller, more nimble” outfits will “work their way into the supply chains of these manufacturing expansions.”
“Too Big to Fail” is a phrase that no American taxpayer wants to hear repeated, whether it applies to a financial institution or a manufacturing entity so large it that the economic viability of entire an community is dependent on its success. When there are contract services teams available to perform any number of logistical tasks from light assembly to sorting and packing, a business can keep overhead costs low and still maintain control over the supply chain with solutions that outsource jobs to Americans, including those individuals with disabilities.
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Image by Mitch Altman, used under its Creative Commons license.