Vacation, Retirement Pay, Sick Days and Insurance

Four benefits an increasing number of Americans will never see again. They may be “contract workers” or “independent contractors” – paid to accomplish a particular temporary task – “temps” or “part-timers” or “independent workers.” Their presence in the marketplace allows employers to staff up during peak times, to explore possible new business vectors or to replace workers on vacation or on leave. And sometimes that temporary work without benefits drags on for years. With private sector unions at their weakest level in recent history, no one seems to care about this growing legion of rootless laborers without a discernible future, many highly skilled and very-well educated.

They can be let go on a whim, engaged for limited time periods with or without the possibility of renewal, and almost always with limited or no opportunity for a permanent position. You’re the “employer”? They don’t need any benefits. No retirement, no vacation pay accruals, no medical coverage except what they can buy for themselves in the marketplace (and boy are they grateful for the Affordable Care Act)… and when they go, there is no severance, no extended benefits… nothing. What’s not to love?

There are lots of specialized companies who can assemble entire crews of experts for just about any level on contract work, some entities who have lists of accountants, secretaries, engineers, information technology experts, technology change-overs, setting up new systems, etc., etc. It is part of what may actually be a massive restructuring of how too many Americans will be “employed” in the new future. For those who have lost permanent work, this new unpredictable universe, where the specialized outsource contractor company sucks up a big chunk of the paycheck (usually from the “employing” company) for the privilege of booking the work, is often the best they can do.

“In March, the temp industry added 28,500 jobs, and about 2.8 million workers are employed currently in temporary or contract positions, according to the Bureau of Labor Statistics. This is a little more than 2 percent of the workforce, a peak last reached in April 2000, said Steve Berchem, chief operating officer of the American Staffing Association, an industry trade group… ‘We argued when the recovery began that there would be a structural shift,’ he said. ‘We were hearing that from members who were hearing that from their clients, (that) they were more likely to use temp and contract workers.’

“‘There are a lot of perverse incentives for employers to use temps,’ said Erin Hatton, an assistant professor of sociology at the State University of New York, Buffalo, and author of ‘The Temp Economy: From Kelly Girls to Permatemps in Postwar America.’ For one thing, it’s cheaper. Using temporary labor lets companies avoid the cost of providing benefits like health insurance, workers’ comp, paid sick leave and the like… ‘It allows them to increase or reduce their workforce more easily, and in an uncertain environment, that can be very valuable to the firm,’ Houseman said…

“It’s all part of a broader shift to an everyone-for-themselves workforce, labor economists say. Business services firm MBO Partners says there were 17.7 million independent workers last year, up 10 percent from 2011.

Berchem called this shift in the labor market a ‘win-win’ for companies as well as workers. ‘We’ve seen an increase in workers preferring flexibility,’ he said. ‘Family is a big priority for temporary and contract employees and they prefer the flexibility such work allows.’” NBCNews.com, April 20^th. Too bad that “flexibility” doesn’t provide enough money to live in a decent place, educate those folks’ kids and maybe save for retirement someday. Maybe those workers really don’t want that kind of “flexibility.” Sounds more like a “lose-lose.”

And let’s face it, temp workers are definitely second class citizens. “‘When you’re just a contractor at a company … your ID badge is a different color. People treat you differently. They say they don’t, but they just do,’ [said one 54-year-old engineer forced into the temp world.]

“More alarming to economists, long-term temps also miss out on the opportunity to develop a nest egg for a comfortable retirement… ‘It’s almost entirely the burden of the individual,’ said Kevin Cahill, a labor economist with the Sloan Center on Aging & Work at Boston College.

The potential hit to Social Security benefits is two-fold, he said. Since Social Security benefits are based on your earnings over your work history, both low-paying temp work or a gap in employment — a combination many of today’s ‘permatemps’ face — can drag down a worker’s future payments… These workers also may not have access to a corporate 401(k) plan. Even if they do, they might not be paid enough to be able to put any away for retirement. There’s certainly no employer match.

“‘Folks who turn to temporary employment because full-time employment is lacking have been hit extra hard. They’ve lost time to accumulate savings and could very well bleed down their savings during their job search.’… This is what happened to [one such worker], who said he used his 401(k) funds to stay afloat during his unemployment. ‘I figure I’m going to be working way beyond 65 or 67 or whatever it is these days,’ he said. ‘I just know it’s going to be really hard.’

“This has broad effects, Hatton warned, not just on the legions of temp workers today, but on the next generation. Their tenuous employment situation can make it harder for them to send their children to college, she said. ‘The effects ripple out.’” NBCNews.com. When you think about the overall polarization of wealth in this country and the severe and unending contraction of our middle class, you really have to ask yourself how long Americans are really willing to live in a country with all these new rules that hurt them and make the rich get richer?

I’m Peter Dekom, and the saddest part of this phenomenon is how few people even care that this is the new vision for the future of America.