How Temp Workers get Screwed Twice

Once when they're hired; then again, when they're laid off.

As we see the number of people who are classified by the Bureau of Labor Statistics as "unemployed" drop from over 15 million (in September 2009) to about 9 million today, we must also consider other factors affecting these numbers.

We must also consider the actual number of "new" jobs created, not just one job that is open and filled more than once during any given 12-month period. One temp job can be filled twice or more during any given year, and can be filled by the same person — or by two or more different people. So how many actual people actually found an actual job; and how many "net" new jobs were actually created since the Great Recession ended? The BLS JOLTS report doesn't answer these questions:

"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."

The Center for American Progress looks at these numbers in a recent article titled: The State of the U.S. Labor Market: Pre-February 2015 Jobs Release:

Policymakers and pundits have taken far too much comfort in the decline in the headline unemployment rate ... Perhaps the most complete picture, called U-6, includes marginally attached workers — those who have looked for work recently, but are not looking currently — and those working part-time who would prefer full-time work. U-6 is always higher than U-3, but it has gotten a lot higher since the recession ... Long-term unemployed, while down sharply from its post-recession peak, is still almost 50 percent higher than its highest prerecession level on record ... At the average rate of job growth over the past three years, The Hamilton Project estimates that we will not reach our former level of employment, when factoring in new labor-force entrants, until sometime after September 2016 ... In a healthy labor market, there is a tremendous amount of churn, with roughly 2 million workers flowing in and out of jobs each month. This is crucial for the U.S. economy, as it represents workers and firms finding better, more productive matches. During times of economic uncertainty, however, people are hesitant to leave their jobs ... Quit rates are conspicuously low, yet another indicator of a still sluggish labor market ... If the [labor] market is improving, we should see more jobs and upward pressure on the cost of labor ... The Employment Cost Index shows falling real wages since the recession. Negative real wage growth means the amount of slack in the market is still considerable ... We have been living with the effects of the Great Recession for nearly six years, and the unemployment rate has never told a story of the labor market as incomplete as it does today.

For the last several months the media has been saying that all 8.7 million jobs that were lost during the Great Recession were gained back. But during the last 6 years since the recession officially ended, we have to remember that every year, an average of 3 million young people are graduating from high school, with most attempting to enter the work force, go to college, or both. Of course, every year there are also college grads as well — and there are also those who drop out of high school and college. But 65 percent of college graduates are showing up on their parents' doorsteps looking for free room and board while they're looking for work. As the economist Mark Thoma reports:

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

Also affecting the labor market and the unemployment rate: There are about a million Americans retiring on Social Security every year — and since the recession, the majority were early retirements at 62 with reduced benefits (maybe because they were laid off and couldn't find re-employment). Also, there are those who went on disability. Since June 2009 we had a NET gain of about 5.5 million retired workers on Social Security and 1.5 million disabled workers on Social Security — many who would still work if they were offered jobs. (Source: SSA)

Add to that, all those who also dropped out of the labor force because they couldn't find work and are no longer counted as "unemployed". Over 11 million left the labor since June 2009 when the recession was "officially" declared over. So all these people who left the labor force (who are neither "employed" nor "unemployed"), also reduced the ratio of those "employed-to-unemployed" — which contributed to driving down the unemployment rate (and not just because of net new jobs being created).

Today, if we counted about 9 million still included in the labor force and referred to as "unemployed", and add 6.5 million who are NOT in the labor force (but who say they want a job), we still have just as many out of work today as we did at the height of the Great Recession. Does this mean NO jobs were actually recovered, and that job growth over the past 6 years has only just barely kept pace with population growth?

And the number of "multiple job holders" has also risen: meaning, one person has more than one job, so no additional people are working in proportion to the number of jobs that were created (or the number of actual people who have been employed or re-employed).

Now, of those who were previously unemployed — and who DID find a "new" job (out of the 8.7 million jobs lost during the recession and all the "net" new jobs that were created since that threshold was recently passed), how many of those jobs were temp and/or part-time jobs? And how are these people faring today?

If they get laid off, most of them can't get unemployment benefits between jobs; and when they do quality, some can only collect for as little as 12 weeks (as they do in North Carolina).

People who are in and out of temp jobs (working a few months on-and-off at a time, before being laid off in between) — and especially if they only work part-time hours — often don't earn enough or have worked long enough to even qualify for unemployment benefits — and that's why only about a third of those who get laid off from work can qualify for benefits. (Which counters the argument that, cutting unemployment benefits creates jobs).

We sometimes see the media tout "initial new weekly unemployment claims" has dropped, and they point to that as a sign of a healthy job recovery. The current news release from the Department of Labor shows: "In the week ending February 21, the advance figure for seasonally adjusted initial claims was 313,000, an increase of 31,000 from the previous week's revised level." And the number of people receiving jobless benefits is about 2.5 million out of 9 million currently counted as "unemployed". Could this also be because temp jobs and part-time jobs are also rising, and that many simply no longer qualify for unemployment benefits? The simple answer: Yes.

To qualify for State UI (unemployment insurance benefits), if one is able and willing to work, all State unemployment agencies look to the employee's recent work history, earnings and their "base period" (the period leading up to their layoff). That's another reason why, with such low job security these days, it's best to work full-time and continuously for the period leading right up to a layoff — to not only qualify for UI benefits, but also to receive the maximum allowable by one's particular State. And so naturally, the higher one's wages (earnings) the better as well.

But if one is working in a temp position, and is only making the federal minimum wage (or slightly higher) — or worse, and is only earning the minimum wage for "tipped employees" — they basically get the shaft between jobs. And if they are classified as an "independent contractor", they are totally shafted, because they don't have an "employer" paying an unemployment insurance tax. Otherwise, a laid off worker has to meet the following criteria.

Base Period, Work Requirements, and Earnings Requirements

Base Period: In almost every state, the base period is a one-year period: the earliest four of the last five complete quarters of the calendar year (The base period is usually the four full quarters preceding that one where one had lost their job.). The way the base period is measured doesn't usually count your most recent employment* (but with some exceptions**).

*Depending on when you file, almost six months of work might not be included in the base period. Recognizing this, many states have created an exception for workers who don't have enough hours of work or earnings in the base period to qualify. In these states, employees don't have to skip the last complete calendar quarter. Instead, they can use an alternative base period that includes the last four calendar quarters. This measurement will include more of their most recent work history.

** Some states have an exception for those who have been out of work for a longer period -- typically because of a job-related illness, injury, or disability. These former employees may be entitled to an extended base period, which looks at the worker's hours and earnings before the worker was injured, even if that work history falls outside of the usual base period.

Work Requirement: Some states require employees to have worked a certain amount of time during the base period to be eligible for benefits. In almost every state that imposes this requirement, the employee must have done some work in at least two of the four calendar quarters that make up the base period.

Earnings Requirement: Most states impose an earnings requirement for the base period -- either instead of or in addition to the work requirement -- before an employee will be eligible for unemployment compensation. States measure the minimum earnings requirement in a variety of ways. Here are the most common:

• Flat dollar amount. Some states require workers to earn a minimum amount of wages during the base period.
• High quarter wages. Some states require workers to earn a set minimum during their highest paid quarter of the base period. This requirement may stand alone or may be combined with an additional requirement for the entire base period. In some states, for example, employees must not only earn a minimum amount during the highest paid quarter, but must also earn a multiple of that amount during the entire base period. This is another way of ensuring that the employee worked at least two quarters during the base period.
• Multiple of the weekly benefit amount*. In some states, a worker must earn at least a certain multiple of the weekly benefit he or she would receive in order to qualify. The multiple is generally between 30 and 40. Example: In Wisconsin, for example, the weekly benefit is 4% of the employee's total wages in the highest paid quarter. If the employee earned $5,000 in that quarter, the weekly benefit would be $200. To be eligible to earn that benefit, the employee must have earned at least 35 times that amount, or $7,000, in the entire base period. Again, this ensures that the employee has earnings in at least two quarters of the base period.

NOTE: These are not the only methods states use to calculate eligibility for unemployment benefits based on earnings (your state's may be different) and some states combine the methods above.

Many times when someone takes a lower-paying job (paying less than before), or if they are more desperate — a low-paying temp or part-time job (either before or after their UI benefits expire), they may get laid off again, and their earnings during the base period are reduced, lowering their previous weekly UI benefit amount (if they even still qualify).

Meanwhile, when someone is trying to determine their best financial strategy while job searching, and while trying to pay the bills, and while coping with any domestic issues, while navigating through their State's unemployment insurance system, it can all be very stressful.

Overall, outside of the anxiety and varying levels of depression that one feels with a job loss, just by filing an unemployment claim can also add to one's feeling of inadequacy. Many people, if they can't file a claim online, may be too proud and feel too ashamed to go stand in a public line looking for a "government hand out" (even though it's an "insurance claim") — especially because of all the negative cognitively associated with being, not only out of work, but also of being on "the government dole" — of which negativity has been constantly perpetuated by many of our political leaders.

Many times our leaders will set the policies in place for you to become unemployed (like tax incentives to offshore jobs or allowing for H-1B visas), and then they'll blame you for being unemployed, and then they'll insult you for being unemployed, and then they'll deny you help while being unemployed — after you are laid off from a job through no fault of your own.

* Study: Basic personality changes linked to unemployment
* In 2008, around 46,000 suicides overall were associated with unemployment
* To find out more about your state's rules for determining unemployment eligibility based on past earnings, contact your state unemployment insurance agency. You can find links and contact information for every state's unemployment agency at this website sponsored by the federal Department of Labor's Employment and Training Administration.

So, because the federal unemployment program for jobless benefits expired for the long-term unemployed at the end of 2013 (for those out of work for 6 months), and because State level UI benefits have been reduced (mostly in Red States), and because of the rise in part-time and temp jobs, and because of the negative social stigma being deliberately attached to the unemployed, many Americans have been getting totally screwed.