Is Now the Best Time to Be a Temporary Worker and in the Gig Economy?
At the end of 2017, it turns out that the official unemployment rate is barely 4%, and overall wage growth has been rather slow to catch up with inflation and growth rates. The so-called gig economy leaves some workers with enough pay and lots of free time to feel happy. But that gig economy also leaves many workers behind.
What about the world of temporary workers? Some employees are simply unable to hold a full-time job all year, and some employers have rather seasonal needs. The reason and logic behind both issues are due to various reasons. That’s where being a temporary worker might be the best option for many people. Working ahead of and into holidays can make the added burden and cost more feasible. Or working around school schedules and family obligations can create times that allow some temporary workers the ability to have the best of both worlds.
In a world where the labor force penetration rate is still incredibly low, maybe being a temporary worker is the best answer. Ditto for those who have recently retired, or who might have gaps in how much they need to bring in to be happy and what the reality of life is.
The group Staffing Industry Analysts has measured the temporary penetration rate from the November 2017 Bureau of Labor Statistics data. This is the percentage of jobs that are categorized in the “temporary help industry.” The BLS data counted some 2.10% as being employed in the “temporary” sector. This rate was 2.09% in October and 2.08% in September. According to Staffing Industry Analysts, the temporary rate among the labor force first broke the 2.0% barrier back in February of 2000.
By adding 18,300 temporary jobs in November, there is actually a reading that is 3.9% higher than a year earlier. Still, this gain of 18,300 is actually 8% of the total 228,000 jobs added to the nonfarm payrolls in November’s seasonally adjusted data. Temporary help employment growth was also some 1,900 higher over the months of October and September in revised BLS data last week.
While the unemployment rate was held steady at 4.1%, the college-level unemployment rate ticked higher to 2.1% in November from 2.0% in October.
According to Staffing Industry Analysts, and citing Randstand and the Conference Board, employers are still attempting to squeeze more out of their existing workers, and there is the ongoing question of whether the acceleration in worker productivity is sustainable. They also cited a sizable contribution from freelancers, gig workers and independent contractors being hired to fill a broad range of critical positions during the current holiday season, and that employers are still planning to take advantage of the growing gig economy into 2018.
All of this plays into the slowing number of job openings. After having gone above the 6 million mark in prior month, the most recent Job Openings and Labor Turnover Survey (JOLTS) report fell by 181,000 in the October reading, and the job openings rate fell to 3.9% from 4.0%.
And data from the Institute for Supply Management now suggests that employers are not wanting to, or are unwilling to, raise wages despite a high number of employers saying they are unable to fill a position. Manufacturing revenue is currently projected to rise by 5.1% in 2018, while employment is expected to rise by 1.2% during the same period. And in nonmanufacturing, the services sector, the expected rise is 6% in revenue but just 1.5% in employment.
There are many reasons a company would choose to hire a temporary worker over a full-time one. That being said, if employers aren’t wanting to raise full-time pay by the same level as they expect growth, maybe the gig-economy and temporary hires market are the best opportunity for several million people.