Photograph by Christopher Gardner
Between 1990 and 1994, temporary employment in Santa Clara County grew by 48 percent while overall employment fell by 1.6 percent, according to state data.
By Laura Stuchinsky
After a decade working in the health-care industry, first as a nursing aide and later as a licensed vocational nurse, Vera Garcia decided to go to nursing school.
The 41-year-old Sunnyvale resident thought it would improve her odds of getting a permanent job in a hospital. But when she graduated in 1990, the market for registered nurses, which had been strong when Garcia started school, had shrunk.
To make ends meet, Garcia signed up with a temporary agency specializing in home healthcare. But she was repeatedly given jobs for home health aides or licensed vocational nurses. Insurance agencies often didn't want to pay for higher-priced registered nurses.
Not only was her pay cut, but Garcia often didn't know how many hours she'd be working in a month. Her teenage son was forced to sleep on the couch when she moved from a two-bedroom to a one-bedroom apartment to reduce her expenses. Luckily, she hasn't had any major health problems.
"I haven't gone to a dentist in two years," she says. "It's been a real struggle for me. All I can afford is a used car that keeps breaking down."
Garcia longs for a permanent, full-time job in the children's ward of a hospital, but the prospects look dim.
According to many labor experts, the nature of work in this country is undergoing a metamorphosis, one as profound as the shift from a farm- to manufacturing-based economy.
In order to retain flexibility in a rapidly changing marketplace, employers are relying more and more on "contingent" workers: temporary workers, part-timers, independent contractors, and on-call/day laborers.
Not only can employers hire and fire contingent employees on a moment's notice, they can do so without the negative publicity triggered by massive layoffs. But some experts argue that that flexibility carries a steep price.
America may be headed toward a two-tier society: one that has stable employment and benefits, such as health insurance, retirement pensions and paid sick leave, and another that skates by without either.
While corporate America was throwing workers overboard to lighten their loads during the recession, temporary agencies were reeling them in. Between 1989 and 1994, the number of people employed by temporary agencies rose by almost 350,000, or 43 percent, while overall employment rose only 5 percent, according to the U.S. Bureau of Labor Statistics.
In trend-setting Santa Clara County, the pattern was even more pronounced. Between 1990 and 1994, temporary employment grew by 48 percent while overall employment fell by 1.6 percent, according to California Employ-ment Development Department data.
In fact, Santa Clara County employs approximately three times the number of temporary workers than the national average. As of February 1995, temporary workers constituted 3 percent of the county's workforce--nearly 25,000 people--but less than 1 percent of the nation's.
That's only part of the story. Last summer, the BLS released a first-of-its-kind study that estimated that contingent workers make up as much as 4.9 percent of the U.S. labor force--or 6 million people. But others, such as Eileen Appelbaum, associate research director for the Economic Policy Institute, a Washington, D.C., think-tank, think the BLS defined contingent too narrowly. She thinks the number is probably closer to 10 percent to 12 percent of the workforce. Too many, she argues, given the conditions under which many contingent workers work.
The word "temp" brings to mind a fleet of pink-collar workers: secretarial and administrative support personnel who answer phones, tap away on keyboards and patiently file reams of paper. In many respects, the image is outdated.
Temporary workers remain disproportionately female and African-American; women hold 53 percent and African-Americans hold 22 percent of temporary-help agency jobs. But temps are employed in a wide range of occupations, from computer programmers to home health aides, accountants to electronic assembly line workers. According to the BLS, 49 percent of the temp workforce in 1994 held white-collar jobs and 40 percent worked in blue-collar occupations.
Not only has the range of temp jobs exploded, but the way temps are used has changed. A decade ago, temps were used primarily as replacements for sick or vacationing employees. Today, they're assigned to special projects, to fill gaps created when companies fold divisions, and to ease work overloads.
According to William Jiang, a business management professor at San Jose State University, the recessions kick-started the transition. Firms retained a core of committed regular employees, but they filled out the ranks with a fluid pool of temps and part-timers.
But, when the economy began to rebound in the mid-'90s, most companies didn't revert to their old hiring practices.
Silicon Graphics prides itself on its "open door" policy. Everyone, from the CEO down to the entry-level grunt, has a cubicle. Most are purple.
Not only is it difficult to determine rank from a quick scan around the office, but it's impossible to pick out the temporary from the regular employees. The only clue to their presence is the larger cubicle occupied by a satellite office of ADIA Personnel Services, a temporary agency that places temp workers at the 3-D computer systems company.
Temporary workers comprise 10 percent to 12 percent of Silicon Graphics' workforce, 300 to 500 of the estimated 4,000 employees at the company's Mountain View headquarters. Eric Lane, the company's director of worldwide staffing, calls it "flexible staffing."
"The concept [of temporary workers] has changed in the last five to 10 years," Lane says.
Temporary workers allow companies to increase or decrease their workforce on a moment's notice, in response to the market or the release of a new product, he explains. "No one wants to be on the front page for having laid off so many workers, but you want flexibility."
SJSU professor Jiang adds that even companies doing well use temps to keep profits up and keep labor costs at a minimum.
Although it can cushion corporations, the arrangement turns workers into "economic shock absorbers," argues Chris Benner, a UC-Berkeley doctoral student who is studying the growth of the temporary workforce for Working Partnerships USA, a nonprofit group affiliated with the Santa Clara County Labor Council.
"What do they mean by flexibility?" he asks. "If it's being done on the back of the majority of workers, that's a real problem."
But where Benner discerns peril, Bruce Steinberg, spokesperson for the National Association of Temporary and Staffing Services, sees opportunity.
The cyclical nature of temporary jobs gives many workers a chance to gain experience, update their skills and get their foot in the door of a potential employer, Steinberg reasons.
Temp agencies are "a bridge to full-time employment," Steinberg attests. In fact, NATSS claims to have reduced unemployment levels by helping to move about 5 percent of the workforce into permanent jobs.
Vicki Bartelt of Target Personnel Services in San Jose agrees. "Companies interview to exclude [candidates]," she says. "We interview to include. It's in our best interest to have a large pool of workers. We're even willing to train them to get the jobs."
So what's the problem?
Some people like the flexibility of working on a temporary basis, being able to take time off whenever they choose. But the majority of contingent workers would readily trade that freedom for security.
According to the Bureau of Labor Statistics, 63 percent of those employed by temporary help agencies and 60 percent of on-call workers or day laborers would prefer a regular job. Only 10 percent of independent contractors said the same, but they typically earn higher hourly wages.
Considering the fact that contingent workers toil without the corporate safety net stretched beneath most permanent employees, that response is not surprising.
Nearly half of all temporary agencies offer benefits such as health care, paid holidays and vacations to their workers, but few workers actually receive them, according to the labor bureau. That's because workers fail to meet the agency's eligibility requirements, typically working a minimum number of hours a week over a period of time. Many workers elect not to participate in health plans since agencies usually require them to pay part or all of the costs of coverage.
Plus, depending upon how far up the corporate ladder they've climbed, temp workers may find their paychecks are a bit thinner than those of permanent co-workers. According to the BLS, the average hourly wage for a clerk employed by a temporary help agency in November 1994 was $6.78 an hour. But a regular employee in the same job would have earned $9.75 an hour, not including benefits, according to a weighted average of 1993 BLS figures adjusted for wage increases.
"It's very worrisome when people who need permanent work can't find it," says Stanford University Labor Economist Myra Strober. "We don't want a two-tier system where people who have permanent employment have benefits and people who don't, don't. That's a dangerous situation."
Beyond the social costs, critics say there are practical reasons why businesses shouldn't rely on large numbers of temps.
"The problem is the phenomenon erodes the traditional relationship of employee loyalty to employer," contends SJSU's Jiang. "On both sides, there much less commitment. This may backfire. The costs of having employees not as committed to your company may or may not be offset by the labor savings. It may impact productivity as well."
Some workers describe a workforce divided on the basis of employment status.
"You're just a temp," one worker, who asked to remain anonymous, recalls hearing numerous times while she was temping. "You're not really part of the company." Their actions underlined the statement. While the rest of the staff at one Silicon Valley firm went to lunch, she was directed to stay behind and answer the phones. "Oh, we'll get the temp to do it," she overheard someone say.
On some assignments, she says, regular employees were reluctant to teach her too much of their job for fear they might be replaced by a temp. That's the kind of tension one-time electronics production manager Rich Loveman says he also saw on the job.
Loveman worked in Silicon Valley for 13 years before switching to real estate, in part because of the transformation he was witnessing in the workplace.
"There was a huge amount of animosity between temporary and permanent employees," Loveman says.
Moreover, he continues, many temporary workers were resentful when they weren't hired as permanent staff--and most weren't. "To me, as a production manager, it seemed to be a waste of time."
But Lane of Silicon Graphics disagrees.
"It does create different management issues," Lane accedes. "When you have a party and the permanent employees are invited and the temporary employees are not, it's certainly noticed. But depending upon the manager," he insists, "it's not an issue."
The nature of how we do our jobs is changing very dramatically, and quickly, says NATSS's Steinberg. "The concept of 'cradle to grave' employment doesn't exist anymore, if it ever did. Job security is not with the company. It's within the individual and the individual's ability to update their skills."
"People talk about everyone becoming an entrepreneur, a business of one, but in my estimation, quite a number of people don't have the skills to do that," counters Maureen Clark, owner of the human resources consulting firm Clark & Associates and a career counselor. "To a certain extent, there's sort of a survival of the fittest."
Most experts agree on the rapidity with which change is occurring in the workplace. Where they differ is over the inevitability of the process. For instance, Benner notes that the U.S. could regulate its temporary help industry. Most of the industrialized nations stipulate the percentage of temps a company can employ, how long they can use them, and what benefits they must offer. Strober proposes that health benefits and pensions be made portable.
Working Partnerships USA is exploring the idea of organizing a worker-run hiring hall, a strategy being pioneered by the telecommunications union, Communica-tions Workers of America. And the SEIU is aiming to organize every temporary health-care worker in the county. Still, analysts predict that the temporary-help industry hasn't yet peaked.
"This is not a trend," Clark warns. "This is a complete revolution in the way we work."
This article appeared in the Sunnyvale Sun, February 21, 1996.
©1996 Metro Publishing, Inc. All rights reserved.