A whole system of contractors and subcontractors benefits from the flexibility of just-in-time labor. For example, Walmart’s two largest warehouse complexes are southwest of Chicago and in the Inland Empire east of Los Angeles. Both are managed by Schneider Logistics, which in turn subcontracts to an ever-changing cast of third-party logistics firms and staffing companies. Such layers of temp agencies have helped Walmart avoid responsibility when regulators have uncovered problems or when workers have tried to sue, accusing the company of wage or safety violations. For example, when California inspected Walmart’s Inland Empire warehouse in 2011 and found that workers were being paid piece-rate according to how many shipping containers they unloaded, rather than by the hour, regulators issued more than $1 million in fines against the subcontractors for failing to show how the pay was calculated. Neither Walmart nor Schneider faced penalties.
The US Labor Department reported that the nation had more temp workers than ever before: 2.7 million. Overall, almost one-fifth of the total job growth since the recession ended in mid-2009 has been in the temp sector, federal data shows. But according to the American Staffing Association, the temp industry’s trade group, the pool is even larger: Every year, a tenth of all U.S. workers finds a job at a staffing agency. The overwhelming majority of that growth has come in blue-collar work in factories and warehouses. Last year, more than one in every 20 blue-collar workers was a temp. Several temp agencies, such as Adecco and Manpower, are now among the largest employers in the United States. One list put Kelly Services as second only to Walmart.
“We’re seeing just more and more industries using business models that attempt to change the employment relationship or obscure the employment relationship,” said Mary Beth Maxwell, a top official in the Labor Department’s Wage and Hour Division. “While it’s certainly not a new phenomenon, it’s rapidly escalating. In the last 10 to 15 years, there’s just a big shift to this for a lot more workers – which makes them a lot more vulnerable.”
The temp system 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. In turn, the temps suffer high injury rates, according to federal officials and academic studies. Unlike the way it monitors nearly every other industry, the government does not keep statistics on injuries among temp workers. But a study of workers compensation data in Washington state found that temp workers in construction and manufacturing were twice as likely to be injured as regular staff doing the same work. “Employers, we think, do not have the same commitment to providing a safe workplace, to providing the proper training, to a worker who they may only be paying for a few weeks.” the federal Occupational Safety and Health Administration director David Michaels said in an interview. “I mean, we’ve seen just ghastly situations.” Many endure hours of unpaid waiting and face fees that depress their pay below minimum wage.
Many economists predict the growth of temp work will continue beyond the recession, in part because of health-care reform, which some economists say will lead employers to hire temps to avoid the costs of covering full-time workers. As work is downsourced through a cascade of subcontractors, some workers have been paid wages below the legal minimum or seen their incomes decline over the years. Temp agencies consistently rank among the worst large industries for the rate of wage and hour violations, according a ProPublica analysis of federal enforcement data. A 2005 Labor Department survey, the most recent available, found that only 4 percent of temps have pensions or retirement plans from their employers. Only 8 percent get health insurance from their employers, compared with 56 percent of permanent workers. What employers don’t provide, workers get from the social safety net, i.e., taxpayers.
It is not uncommon to find warehouses with virtually no employees of their own. Many temp workers say they have worked in the same factory day in and day out for years. In some lines of work, huge numbers of full-time workers have been replaced by temps. One in five manual laborers who move and pack merchandise is now a temp. As is one in six assemblers who work in a team, such as those at auto plants.
At least 840,000 temp workers working blue-collar jobs and earn less than $25,000 a year, a ProPublica analysis of federal labor data found. Only about 30 percent of industrial temp jobs will become permanent, according to a survey by Staffing Industry Analysts. African-Americans make up 11 percent of the overall workforce but more than 20 percent of temp workers. Latinos make up about 20 percent of all temp workers. Agencies have flocked to neighborhoods full of undocumented immigrants, finding labor that is kept cheap in part by these workers’ legal vulnerability: They cannot complain without risking deportation.
There is a now an extension of the practice in which longshoremen (dockers) would line up in front of a boss, who would pick them one by one for work on the docks. Temp workers today face many similar conditions in how they get hired, how they get to work, how they live and what they can afford to eat. Adjusted for inflation, those farmworkers earned roughly the same 50 years ago as many of today’s temp workers. As before, the products change by the season. But now, instead of picking strawberries, tomatoes and corn, the temp workers pack chocolates for Valentine’s Day, barbecue grills for Memorial Day, turkey pans for Thanksgiving, clothing and toys for Christmas. Temp firms have successfully lobbied to change laws or regulatory interpretations in 31 states, so that workers who lose their assignments and are out of work cannot get unemployment benefits unless they check back in with the temp firm for another assignment.
Many metro areas don’t have adequate transportation from the working-class neighborhoods to the former farmland where warehouses have sprouted over the past 15 years. So a system of temp vans has popped up, often contracted by the agencies. Workers in several cities said they feel pressured to get on the vans or lose the job. They usually pay $7 to $8 a day for the round trip. Workers describe the vans as dangerously overcrowded with as many as 22 people stuffed into a 15-passenger van. In New Jersey, one worker drew a diagram of how his temp agency fit 17 people into a minivan, using wooden benches and baby seats and having three workers crouch in the trunk space.
Some temp firms have even promoted themselves as experts at maintaining a union-free workplace.
Will Collette, who led an AFL-CIO campaign against the temp firm Labor Ready in the early 2000s, said it was nearly impossible to organize workers with such a high turnover.
“Unions have had two souls when it comes to temp workers,” said Harley Shaiken, a longtime labor economist at the University of California, Berkeley. One is to try to include them, he said, but “the other is circle the wagons, protect the full-time workers that are there.”
And recent rulings have tied union hands. A 2004 order by the National Labor Relations Board barred temp workers from joining with permanent workers for collective bargaining unless both the temp agency and the host company agree to the arrangement.
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