In the US, temporary jobs become a permanent fixture

Associated Press

WASHINGTON

Hiring is exploding in the one corner of the U.S. economy where few want to be hired: temporary work.

From Wal-Mart to General Motors to PepsiCo, companies increasingly are turning to temps and to a much larger universe of freelancers, contract workers and consultants. Combined, these workers number nearly 17 million people who have only tenuous ties to the companies that pay them — about 12 percent of everyone with a job.

Hiring is healthy for an economy. Yet the rise in temp and contract work shows that many employers aren’t willing to hire for the long run.

The number of temps has jumped more than 50 percent since the recession ended four years ago to nearly 2.7 million — the most on government records dating to 1990. In no other sector has hiring come close.

Driving the trend are lingering uncertainty about the economy and employers’ desire for more flexibility in matching their payrolls to their revenue. Some employers have sought to sidestep the new health-care law’s rule that they provide medical coverage for permanent workers. The Obama administration delayed that provision for a year.

The use of temps has extended into sectors that seldom used them in the past — professional services, which include lawyers, doctors and information- technology specialists.

Temps typically receive low pay, few benefits and scant job security. That makes them less likely to spend freely, so temp jobs don’t boost the economy the way permanent jobs do.

Beyond economic uncertainty, Ethan Harris, global economist at Bank of America Merrill Lynch, thinks more lasting changes are taking root.

An Associated Press poll of 37 economists in May found that three-quarters thought the increased use of temps and contract workers represented a long-standing trend.

The trend toward contract workers was intensified by the depth of the recession and tepid pace of the recovery. A survey of companies with more than 1,000 employees by Staffing Industry Analysts found they expect 18 percent of their work forces to be made up of temps, freelancers or contract workers this year, up from 16 percent in 2012.