Tuesday, December 21, 2010

Temporary Workers

The recent rise in temporary workers is appears to be higher than in previous economic downturns:

This year, 26.2 percent of all jobs added by private sector employers were temporary positions. In the comparable period after the recession of the early 1990s, only 10.9 percent of the private sector jobs added were temporary, and after the downturn earlier this decade, just 7.1 percent were temporary.

Temporary employees still make up a small fraction of total employees, but that segment has been rising steeply over the past year. “It hints at a structural change,” said Allen L. Sinai, chief global economist at the consulting firm Decision Economics. Temp workers “are becoming an ever more important part of what is going on,” he said.

I think that this trend has a couple of features that are worth thinking about. One, it tends to mean that workers will have less institutional knowledge than before. I suppose that there are some employment circumstances where basic skills transfer but one assumes that most workplaces benefit from knowledge of the corporate culture, product knowledge, and so forth.

Second, I think that this trend continues to make the link between employment and benefits health insurance less sustainable. It is unclear if the end game is a government based system, but it sure makes the complexity of constant insurance coverage (without an employer) look like a difficult task.

I am not really sure what the best outcome looks like but I do think that this trend, if it should continue, will bring as many challenges as benefits.

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