Good signs and bad in the region's temp market

Posted at 12:00 PM on June 11, 2010 by Paul Tosto (0 Comments)
Filed under: Jobs & unemployment

A jump in the demand for temporary labor is typically viewed as a good sign of recovery -- employers taking baby steps, at least, to hire people and start producing goods and services again coming out of recession.

And as a newly released survey from the Federal Reserve Bank of Minneapolis shows, demands for temp labor in the region are jumping.

The downside (yeah, there's always a downside) is that the Great Recession's driven a lot more people to seek temp work and that's hurt pay. Also, the concept of "temporary" appears to be changing.

Here's how the Fed breaks down by businesses in Minnesota, western Wisconsin and North Dakota (click on the chart for a larger view)

"Staffing services firms report that their business is picking up--aggressively in some cases," the Fed writes.

"The unpleasant news? "With an ample supply of available workers, client firms are picky about whom they choose to accept for temporary work, and pay rates generally have been flat, or worse ... A medium-sized staffing agency in Wisconsin commented that office and administrative professionals used to earn between $12 and $14 per hour, but "now, $10 with no flex."

The Fed's findings reinforce what my colleagues at MPR News have seen in their reporting.

Annie Baxter's story last fall laid out how temp jobs are a mixed blessing in this economy.

And in a recent MinnEcon post, MPR's chief economics correspondent Chris Farrell highlighted research showing that for low-income, low-skill workers, a temp job "actually lowers a worker's employment and income prospects over time. It doesn't lead to full time work."

Another frustration is that the staffing companies responding to the Fed survey say their clients "are still taking a wait-and-see approach to full-time permanent hiring, preferring to stay as lean and flexible as possible by depending on temporary and contract workers for long periods."

That's a good sign if you're a business trying to find your footing coming out of the worst recession in decades. It's not so good if you're a worker hoping your part time gig will turn into something permanent.

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