Wednesday, February 11, 2015

Job-Hopping and Temps the New Norm?

Are We Becoming a Part-Time Economy?

(Federal Reserve of Atlanta)  "Compared with 2007, the U.S. labor market now has about 2.5 million more people working part-time and about 2.2 million fewer people working full-time. In this sense, U.S. businesses are more reliant on part-time workers now than in the past."

Comments from Mark Thoma's blog:

The ratio of part-time to full-time workers in January 2015 was 22.8 as compared to 20.3 in December 2007 or 20.7 in December 2000. There were 898,000 fewer full-time workers in January 2015 than in December 2007, while there were 2,801,000 more part-time workers. Though there were 1,903,000 more men and women working in January 2015 than in December 2007, there were 898,000 fewer full-time workers. We are 7 years and 1 month from the beginning of the recession, and full-time employment is still 898,000 below the level of December 2007. (Bureau Labor Statistics)

This helps to explain why real median household incomes were still significantly lower in December 2014 than in December 2007 and even lower than in June 2009 when recovery began. This just one more example of how labor markets have been distorted; managers have confirmed their control over hiring and the workforce and these markets do not work in a proper supply-demand mode. The other obvious example of distortion is the point about productivity rising in the period before, but no gains were seen in wages. The distortion also effected a windfall in gains to managers of capital. Economic policy may wish to remediate, at least if you are on the side of EPOP ratios improving and you measure success in domestic-workforce terms. If you believe that non-market economics led to distortion of the labor markets and windfall gains, perhaps this is also a reason to justify windfall taxation policies as well (since these gains were unfairly and uneconomically gathered, they were not earned by the people who actually got the money). It may also justify a modest increase in social security earnings checks too, as this is, at least, a modest way to correct for the inappropriate, distortionary wage results of that period. And as for the part-time labor market now, this also means we need to look at Fair Labor Standards policy and enforcement. The distortion of labor markets for a generation do not justify continuation of similarly thoughtless policies. (Sentier Research)

Remember the old days, when a son would follow in his dad's footsteps and work in the local factory (or mine, etc.) — and work there for the rest of his life (maybe for 40 or 50 years) — until eventually, he would pass the torch — whereas his son would then later do the same thing?

Nowadays it seems, people don't take jobs and stick around for every long — and "job-hopping" is not only the new norm, but many employers now see this as a positive trait in job candidates. (It used to be, job-hopping was viewed as a sign of irresponsibility and a lack of commitment and loyalty).

From the Bureau of Labor Statistics' last JOLTS report (Job Openings and Labor Turnover Summary): "Over the 12 months ending in December 2014, hires totaled 58.3 million and separations totaled 55.4 million, yielding a net employment gain of 2.9 million. These figures include workers who may have been hired and separated more than once during the year."

To put this into perspective: The Bureau of Labor Statistics says we have a labor force of 155.5 million workers. So that means, on average, over the course of one year, well over 1/3 of the entire labor force is playing Musical Chairs with churn in the labor market. Could this be because of the dramatic rise in “temp workers” and "independent contractors"?

Even with budget cuts (and excluding the U.S. military and Post Office), the U.S. government is still (and always has been) America's largest job creator , currently with about 2.1 million employees (Even though Speaker John Boehner always insists that "government doesn't create jobs.")

Walmart is the largest private sector employer with more than 1.4 million U.S. employees. (A Reuters survey of 52 stores run by the largest U.S. private employers showed that 27 of them were only hiring temporary workers — including America's largest employer, who Walmart calls "flexible associates").

America's second largest private sector employer is a temp agency called Kelly Services, which provided employment to 555,000 employees in 2014. (Then there's McDonald's with 440,000 employees in the U.S. and UPS with 344,000 employees in the U.S.)

Back in the old days, the largest employers used to be companies like GM, Bell, Ford, GE and U.S. Steel. Now it's Walmart and a temp agency.


  1. "The supply of unskilled labor is still pretty plentiful," said George Corona, chief operations officer at Kelly Services, one of the country's largest providers of temporary employees for light assembly plants and distribution centers ... Staffing agencies have played a growing role in the U.S. economy as companies have relied increasingly on temp hires. Temporary jobs accounted for a record-high 2.1 percent of total employment last year, about twice its share in 1990."

    "While 2014 was the strongest year of job gains in the recovery from the 2007-09 recession, rising output is not yet translating into substantial wage gains for the workers of Kelly Services, one of the country’s largest providers of temporary employees."

    "The biggest single contributor to that was temporary help agencies, which added 888,000 jobs. An explosion in temp jobs isn't all that encouraging."

  2. Prime Age Non-Workers

    The number of young Americans living with their parents has grown over the last 15 years. Some have returned home after striking out on their own (earning the nickname "the boomerang generation"), while others never left at all.

    A new Federal Reserve Bank of New York staff report suggests the most important factor is the rising student debt of college graduates, which "appears to be driving young people home and keeping them there."

    In 1999, approximately 30 percent of 25-year-olds lived with their parents — but by 2013 the percentage had risen to nearly 50 percent.

    In addition, home ownership for 25-year-olds has fallen from approximately 23 percent in 2003 to just over 10 percent in 2013.

    It has become more difficult for the young to get an education, strike out on their own, and not have to rely on their parents for support. And there's little reason to suspect this trend will end any time soon.

    65 percent of college graduates are showing up on their parents' doorsteps looking for free room and board while they're looking for work.

    Links below:

  3. The number of unemployed people still exceeds the number of job openings in every industry except health care, yet you still hear stories about workers not being skilled enough for available jobs. The mismatch is especially pronounced in construction, where many jobs don't even require a high school education.

  4. The "job creators" are spending billions of dollars every year on mergers and acquisitions. But yet, very little (if any) of their profits are invested in employees’ wages — because (the CEOs say) raising wages would slow hiring, reduce worker hours, cause layoffs, raise consumer prices, destroy the economy, and end life as we know it on Earth.

    But what the "job creators" never tell us is, if they did raise workers’ wages, these CEOs might also have to buy one less beachfront mansion, a smaller private jet or a shorter luxury yacht.

  5. America is toast, via your quote from this post "Back in the old days, the largest employers used to be companies like GM, Bell, Ford, GE and U.S. Steel. Now it's Walmart and a temp agency."

    about says it all...thanks again Bud.

    nothing a little more free trade can't fix... ha ha phuckin ha!


    Small Business, Self-Employed or Independent Contractor?

  7. VOX: Premature Deindustrialisation

    Job ladders and earnings of displaced workers