After Walmart, the Nation’s Second Largest Employer Is a Temp Agency

Kelly Services

The United States of America currently has 2.7 million temporary workers who make up nearly one-fifth of job growth since 2009.  Temporary work is now growing at a pace 10 times faster than the full-time private sector, a pace faster than the industry’s previous high before the 2001 recession.  A recent Mother Jones piece explores this devastating development.

In 2012, one out of every 20 blue collar workers was temporary.  This alarming trend is being fueled by some of the largest companies in the U.S. who use temporary work to help their supply chain hurry products to the shelves.  In a true sign of the economic times, job placement company Kelly Services is now the nation’s second largest employer behind only WalMart who uses temporary workers to power their warehouses.

This trend is partially due to the recession and lack of recovery. But the lack of recovery is partially due to this trend.  It’s a chicken (gone bad) and (rotten) egg situation. Large companies like WalMart have made temporary hiring a staple of their corporate policy in order to deflect blame for poor working conditions and labor law violations.  These workers are frequently paid near-minimum wage and live at or below the poverty level. This puts an excessive burden on state and federal programs.  Unfortunately for Americans, the rising profits coming from cutting labor costs are viewed as a success in corporate headquarters.   Mary Beth Maxwell, an official in the Labor Department’s Wage and Hour Division, told Mother Jones:

“We’re seeing just more and more industries using business models that attempt to change the employment relationship or obscure the employment relationship.  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 2013 which makes them a lot more vulnerable.”

Temps work paycheck to paycheck (for 25 percent less than permanent workers) and are unlikely to put up a fight over poor conditions because of how badly they need their jobs. Being used as the “middleman” lets companies deflect blame for injuries or abuses happening at the workplace. This has been a major complaint in the recent wave of WalMart strikes and walkouts.  The Mother Jones article, “The Expendables: How the Temps Who Power Corporate Giants are Getting Crushed,” calls this phenomenon the “New Temp Ecosystem”:

Meanwhile, a whole ecosystem 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.

In this “ecosystem” companies can pay their workers next to nothing with layers and layers of red tape between them and the eventual complaint.

Berto Gutierrez, who has worked several stints at the Walmart warehouse in Elwood, Ill., provided ProPublica with a copy of a 2011 paycheck from subcontractor Eclipse Advantage. The check shows he was paid only $57.81 for 12.5 hours of work, or $4.62 an hour. Neither Eclipse, Schneider nor Walmart provided an explanation for Gutierrez’s paycheck.  

Powerful corporate lobbies prevent the kind of legislative overhaul needed to change the way these industries operate.

Members of Congress have introduced a handful of bills protecting temp workers in the past two decades. None have made it out of committee. Efforts on the state level have met similar resistance.

But worker advocates and some temp agencies say the Massachusetts Temporary Workers Right-to-Know Law, which took effect in January, provides a model for other states.

That law requires temp agencies to give workers written notice of the basics: whom they will work for, how much they’ll be paid and what safety equipment they’ll need. The law limits transportation costs and prohibits fees that would push workers’ pay below minimum wage. Agencies must also reimburse the worker if they are sent to a worksite only to find out there is no job for them there.

To read more on the gruesome growth of the temporary workforce check out “The Expendables” in its entirety.

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