Correction to This Article
An Oct. 11 article on temporary employment incorrectly said that the
Labor Department classifies 12.1 percent of the workforce as
"contingent workers." Some of the workers in that 12.1 percent are
employed in what the department classifies as "alternative work
arrangements" -- a category that includes temporary employees,
independent contractors, on-call workers and contract company workers.
Permanent Job Proves An Elusive Dream
By Jonathan Weisman:
October 11, 200
Phillip Hicks had loaded his rusting pickup and was heading to
work one afternoon last year when his tearful daughter called from a
pay phone. She had been pulled over for speeding, she told her father,
and worse, she was driving with a suspended license. The police had
impounded her car and left her by the side of a dusty highway.
To most workers at the sprawling Toyota plant where Hicks works,
the detour to pick up his daughter would be a headache, no doubt. To
Hicks, 40, it was considerably more. He called his employer to say he
would be late for the swing shift. But since Hicks is a temporary
worker, his daughter's brush with the law became a permanent blemish on
an already shaky employment record. Temps are allowed only three days
off a year, and Hicks was coming up against that.
"They told me I had an attendance problem," he sighed wearily,
his soft mountain accent revealing his roots in coal country to the
Hicks is among the ranks of what economists call the
"contingent" workforce, the vast and growing pool of workers tenuously
employed in jobs that once were stable enough to support a family. In a
single generation, "contingent employment arrangements" have begun to
transform the world of work, not only for temp workers, but also for
those in traditional jobs who are competing with a tier of employees
receiving lower pay and few, if any, benefits
The rise of that workforce has become another factor undermining
the type of middle-wage jobs, paying about the national average of $17
per hour and carrying health and retirement benefits, that have kept
the nation's middle-class standard of living so widely available.
Hicks has spent four years as a temp worker building cars for
Toyota Motor Corp., making manifolds and dashboards for Camrys, Avalons
and Solaras sold all over the United States. He works alongside
full-fledged Toyota employees who earn twice his salary, plus health
and retirement benefits.
When Toyota announced it would be coming to Georgetown, Ky., in
1985, it promised to invest $800 million in the community and employ
thousands, with thousands more jobs coming through its suppliers. By
1997, the plant exceeded all expectations, with 7,689 full-time
workers, a payroll over $470 million, and a ripple effect creating more
than 34,000 other jobs in the Bluegrass state.
But by 2000, Toyota was carefully controlling any additions to
the workforce. When Hicks left his family in Knott County, Ky., to seek
work at the plant 140 miles away, the only door left open was through a
temporary agency, Manpower Inc. At $12.60 an hour, the job would not
even let him afford the $199-a-week health insurance premium for his
family of five. But Hicks said Manpower assured him that after a year
-- two at the outside -- he would be on Toyota's payroll, earning
$24.20 an hour, with health insurance, a dental plan, retirement
benefits, incentive pay, the works
"I could stand on my head for a year or two for a $20-an-hour
job with benefits," he shrugged.<>
Permanent Job Proves An Elusive Dream
The increasing use of temps "is part of the diminished and
inferior wages and fringe benefits you see in all the new jobs that are
becoming available," said William B. Gould IV, a labor law professor at
Stanford University and former chairman of the National Labor Relations
The government does not have up-to-date figures for the size of
the entire contingent workforce, which includes temps, independent
contractors, on-call workers and contract company workers. In 2001, the
Labor Department classified 16.2 million people -- as much as 12.1
percent of the labor force -- as contingent workers.
It does track one slice of that workforce: temporary workers.
Since January 2002, the nation added 369,000 temp positions, about half
of the private-sector jobs created during that stretch. Temporary jobs
accounted for one-third of the 96,000 jobs added to the economy in
September. In 1982, there were 417,000 workers classified as temporary
help. Today, there are more than 2.5 million, according to Labor
That is about equal to the number of manufacturing jobs lost in
the past decade. Barrie Peterson, associate director of Seton Hall
University's Institute on Work in South Orange, N.J., said that as many
as half of those lost manufacturing positions may have been converted
to temporary employment.
The change can be abrupt. At A&E Service Co., a small
auto-parts assembler in Chicago, employees were told on July 15 that
the firm "will no longer hold general labor employees on its payroll.
All general labor employees that choose to work at A&E Service
Company, LLC must be employed by Elite Staffing effective immediately."
On the announcement, workers were asked to check a box accepting or
declining the new temporary employment, then sign and date the form.
Temps no longer fit the stereotype of the secretary filling in
for a day or two. Jobs categorized as precision production, repair,
craftsmanship, operations, fabrications and labor now account for 30.7
percent of all temp jobs, nudging out clerical and administrative
support, which represent 29.5 percent of the temporary army.
Peterson calls it "the perma-temping shell game," part of a
broader effort by employers to convert sectors of their workforce to
Satisfaction with the arrangement varies. About 83 percent of
independent contractors in the Labor Department survey said they were
satisfied. By contrast, about 44 percent of temps and 52 percent of
contingent workers said they were not satisfied.
The impact of the temp trend on the American middle class can
hardly be overstated. As the Federal Reserve Bank of Chicago noted in a
paper last year, temporary workers "receive much lower wages than
permanent workers, although they frequently perform the same tasks as
permanent staff members." An analysis by Harvard University economist
Lawrence F. Katz and Princeton University economist Alan B. Krueger
found that states with the highest concentration of temps experienced
the lowest wage growth of the 1990s.
Toyota executives say they use temporary workers as a buffer, to
insulate their full-time staff from the ups and downs of consumer
demand. Since it opened in 1988, through two recessions, the Georgetown
plant has never laid off an employee, said Daniel Sieger, manager of
media relations for Toyota Motor Manufacturing in North America.
Job Proves An Elusive Dream
Even without layoffs, however, the plant's full-time staff has declined
by 706 positions from the 7,787 employees it had in 2000, according to
Toyota. Over that time, the temp workforce dipped from 409 in 2000 to
301 in 2002, then rose to 425 late this summer.
Toyota managers say they will try to hire all of their long-term
temporaries by the end of the year or in early 2005, after they see how
many Toyota workers accept an early retirement package. Forty-seven
temps were hired in late September. The management move came after The
Washington Post spent a week in Kentucky examining the temporary
employment issue at the Georgetown plant. Before September's hires, it
had been two years since the plant hired a full-time "team member,"
Toyota managers said, a period during which the plant shed 240
full-time positions. Temporary employment during that time rose by 124.
"Certainly the long-term temporary issue is one that we regret,"
said Pete Gritton, the plant's vice president of administration and
human relations. "We never intended to have those people in here for
four years or whatever as temporary."
Temporary employment is an increasingly important issue for
unions. The expansive labor contract reached between the United Auto
Workers and Ford Motor Co. in September 2003 includes six pages of
rules governing the use of temps. Under the agreement, Ford can bring
on a temporary worker for a maximum of 89 days, after which the worker
must be hired or dismissed. Most temps can only work two days a week,
as well as "premium" days such as holidays.
Just 62 miles west of the Toyota plant, the UAW made a stand at
Ford's Kentucky Truck Plant, refusing even to countenance 89-day temps.
"It's a big, big deal," said Mike Stewart, the UAW's building
chairman at the plant in Louisville. "Any time you get this kind of
[compensation] divide, it just means less people making less money who
can't afford your product. We will always keep temps to a minimum."
The use of temporary workers appears to be most pervasive in
plants owned by foreign companies, which tend to locate in states where
laws make union organizing difficult, said Susan N. Houseman, a
researcher at the independent W.E. Upjohn Institute for Employment
Research in Kalamazoo, Mich. One Japanese auto parts plant estimated
that a 5 percentage point reduction in the share of temps in the
workforce would increase total labor costs by $1 million over a year,
an Upjohn study found.
At BMW's auto plant near Greenville, S.C., about 175 temporary
workers supplement a production workforce of 3,500, keeping the
assembly line churning out Z-4 roadsters and X-5 sport utility vehicles
for the U.S. and global market through lunch hour and break times, said
Robert M. Hitt, a spokesman for BMW Manufacturing.
At Faurecia S.A., a BMW supplier in nearby Fountain Inn, S.C.,
about a third of the workers making door panels, consoles and
dashboards for the Z-4 are temps, said Campbell Manning of Palmetto
Staffing Group Inc., the temporary employment agency that staffs the
French auto parts supplier.
"They don't hire permanent," she said. "After 90 working days,
they used to roll onto the payroll. Now they just keep them as
Job Proves An Elusive Dream
Palmetto Staffing charges Faurecia a flat $12-an-hour for each
of its temps. If Faurecia hired its own permanent workers, expenses for
workers compensation insurance, unemployment insurance and other
demands would add $4 to $5 onto a $9-an-hour wage. Benefits would add
Even the temps cannot argue with the logic of hiring a
lower-cost workforce. "I don't really blame Toyota," said Roy Biddle,
who went to work at the Georgetown plant at the same time Phil Hicks
did, nearly four years ago, with similar assurances that he would land
a full-time job after a year. "The law's the law, and they're just
doing what they can do under the law."
To temper expectations, Toyota last year implemented a new
policy capping temporary employment at two years. After that period,
workers must leave, but can reapply in six months. If hired again, a
worker starts at the entry wage of $12.60 an hour, compared with more
than $14 per hour if they have been there for a few years.
About 160 long-term temporaries, like Biddle and Hicks, were
grandfathered in and allowed to stay indefinitely.
Nancy Johnson, director of the Center for Labor Education and
Research at the University of Kentucky, said that because of the new
policy, temps now cycle from one plant to another, working at Toyota,
then at nearby E.D. Bullard Co., making fire helmets, then perhaps at
an auto parts supplier before heading back to Toyota.
At the Kentucky State Cabinet for Health and Family Services'
community office in Georgetown, social workers say more Toyota temps
are applying for state aid to cover food costs and medical bills.
"It's the traditional Japanese model that people talked about in
the '80s," Johnson said. "Toyota never lays people off, sure, but the
temps are absorbing the financial swings of all these companies, and
they're doing it at a price."
Rick Hesterberg, a plant spokesman, noted that $12 to $14 an
hour in central Kentucky compares favorably to wages even for some
permanent jobs. "These people still make good money," he said of the
temps. "It's nothing to snuff your nose at, at least in this part of
But many Toyota temps say their problems go beyond money.
Indeed, life seems always on the edge of disaster, where even rewards
-- the small gift bag of cookie cutters or the "Star Performer"
T-shirts that are given out to temps -- seem more like petty
humiliations. In February, a Toyota temp posted an anonymous
"discussion" paper in the assembly-line men's rooms, pleading "the 'E'
word, 'E' for exploitation."
"There are temps at [Toyota] who have been here for 3 years,
some approaching 4 years, many waiting for the permanent job offer,"
the essay reads. Toyota "is exploiting their patience, their economic
status, their work ethic, their work contribution, their reliability,
their health, their safety."
Chris, a graduate of Western Kentucky University, once interned
at Toyota during college, doing computer-aided design and drafting. He
spoke on condition that his last name would not be used. Even with a
degree and an internship on his résumé, he, too, was
steered to Manpower as the only door into Toyota. But unlike the other
temps, he figured his temporary stint would quickly lead not just to
the factory floor, but to the white-collar suites.
Now, after four years, he frets that his wife wants a second
child but he's not sure how they'll pay for the insurance.
"These people are making extreme sacrifices, working second
shift, no benefits, low pay," fumed Matt Roberts, 31, a full-time
Toyota worker since 1997. "It's a disgrace to the American dream.
That's what it is."
For years, the United Auto Workers has tried to unionize the
Toyota plant, to no avail. Recently, the use of temps has become a
major issue. For full-time workers, the temps present a quandary. On
the one hand, the full-time workers may see the temps as Toyota does, a
buffer protecting their jobs. The more low-paid workers there are at
the plant, the more profitable the company will be, and the less likely
to resort to layoffs, suggested David Cole, director of the Center for
Automotive Research in Ann Arbor, Mich. A union might threaten that
buffer by demanding that temps be brought on full-time or dismissed.
"The temps may help keep the union out," Cole said. "It's in the
selfish, vested interest of the full-time workers to keep more temps."
But some Toyota workers do not see it that way. Several
full-time employees said the growing presence of temps at the plant is
holding back their wage gains, while limiting their movement in the
plant. Some employees say they have been stuck working nights because
any open day-shift positions are quickly filled by temps.
"If you break down, they've got a new guy waiting at the door,"
said Roberts, who with his wife, another Toyota worker, clears a
six-figure income. "You're creating a tug of war. There's no protection
for either side."
In Georgetown, the divisions can show up in strange, some say
Toyota is famous for the "kaizen" -- continuous improvement --
checks that it pays to workers who come up with suggestions that save
money. Earlier this year, Hicks and Chris helped devise a change that
cut two jobs from their small quadrant of the assembly line. The change
meant more work for everyone, but it was more efficient. Toyota
rewarded the idea by sending out $500 checks to every member of the
team, every full-time member, that is.
The two temps who came up with the suggestion got nothing. Their
group leader did feel bad. He gave each of them a $25 gift certificate
to the Toyota company store.
Then a full-time worker slipped them both $50.
"You guys got us this money," Chris recalled him saying. "Sorry
I can't give you more."