America’s hidden unemployment crisis

[IDemo]

Temp workers easily cast aside but have little safety net

updated 1:27 p.m. MT, Mon., April 13, 2009

Over the past decade, U.S. businesses increasingly have relied on contract workers as a way to keep a lid on health care and retirement benefit costs and to give them more flexibility to adjust payrolls as conditions change. Now, with the American economy flashing code red, companies from Wall Street to Silicon Valley are casting off temporary workers and freelancers left and right, typically without any severance pay.

While the ability to shed contingent workers helps protect corporate profits, economists say it's a net negative for the economy. That's because while companies may save on labor costs, they aren't likely to use those savings to boost investment with the economy so weak, preferring instead to rebuild their balance sheets.

Meanwhile, the people who lose their jobs will be forced to cut spending drastically, particularly because many of them earn below-average pay and thus have little savings to fall back on. The overall result is a decrease in demand, further depressing the economy. Says Dimitri B. Papadimitriou, president of the Levy Economics Institute of Bard College in Annandale-on-Hudson, N.Y.: "Clearly there is a macroeconomic impact. It begs the question of what our social safety net is all about."

-snip-

Here in the U.S., the cutbacks of temporary workers mean the labor market is in much worse shape than the headline 8.5 percent jobless figure for March would suggest. Throw in part-timers who would like to work more and unemployed workers who have given up their job search, and you come up with a jobless rate closer to 15.6 percent, according to one measure buried in the Bureau of Labor Statistics' monthly Employment Situation report.

http://www.msnbc.msn.com/id/30158105/

[OHdem10]

1. Thanks for posting this.

[OhioChick]

2. K&R

:kick:

[Lisa0825]

3. The agencies my company deals with are starting to see more orders.

They say that orders for more temps precede companies increasing permanent employees, since early on in a recovery, they many not want to risk taking on more actual hires yet. So they take on contract hires first, and then if the recovery pans out, they can then buy out the contracts.

[dysfunctional press]

4. the company my wife contracts out to kept her, but cut a regular employee in the same dept...

:shrug:

[Double T]

5. The US government ALWAYS provides inaccurate numbers for..........

uncomfortable things like unemployment and inflation. Our economy and financial system are much worse than the numbers released to the media and public; WE have reached the point where WE will have difficulty just servicing the interest on our monumental debt. Add in 2/3 of the retirees or soon to be retirees that will need to return to the job market for survival and WE have an employment disaster of epic proportions. wall street's happy talk and bear market BS rally will be very short lived.

[ThomCat]

6. 1 in 6 adults is out of work or under employed?

:wtf:

1 in 6? That is definitely far more of a crisis than even what we're hearing about. :wow:

And the government is concentrating on pumping money into banks so that they can give out billions of dollars in bonuses again?

We need work projects to put people to work and rebuild necessary infrastructure. Let's stop playing games expecting big corporations to be the genie that solves all problems.

[spinbaby]

10. Some of us are over-employed

When people get laid off, remaining employees have a bigger workload. Which is why I was at work at 6:00 am this morning. If things were working right, we'd have more people working in my department and I could get more sleep.

[IDemo]

7. I lost my contract position of 8-1/2 years in January

Luckily, I was able to land a better full time job in March. I was told they had received hundreds of resumes for one opening. Whew!

I have remained in contact with my old coworkers, both temp and permanent. The company just announced a one month furlough for temp workers
and did so near the end of the business day on a Friday. Kind of hard to make plans with that kind of notice. That was after seven weeks off
last year and the end of medical benefits and paid time-off hours. This was a "managed service" contract agency, so there were perks not usually available for a temp.

[Blackhatjack]

8. Let's see... you don't count those who have given up looking, those who work 15 hrs/wk, ....

... those who have exhausted their unemployment benefits, those who earn income at a rate below the poverty level, those who are temporary/contract workers, etc.

And then you proclaim the unemployment rate is at or near 10% in my state of North Carolina.

The real unemployment rate is HIGHER than the announced rate ... way higher.

Just look at the people showing up at job fairs where 2-3,000 people were expected and approx 15,000 showed up. That tells you the government announced rates of unemployment are way off.

[Revlon10]

9. K & R

Next week will make a year for me, I'm in the fashion biz in NYC, we monitor our sales each week and last year mid April, the second things took a down turn, we were all let go. I noticed that in the last 10 years or so, that their are more and more freelancers in the work place, the company saves money with freelancers, we work project to project, and if your not that creative your out. Plus (no medical) and agencies are making a killing farming us out, and now only want to give any new jobs to the kids fresh out of school, because they make more money off their backs, even if they are not as qualified for the position.
We freelancers don't qualify for unemployment so I know they are not counting us in the numbers, and their are a whole lot us us. Many of us look and work like full time workers but we are freelancing, we were just never offered a contract. Remember the agencies dominate the market, and make it hard for you to get full time positions because the company now has to buy you out.
I know they are not counting freelance workers, temp workers and their are a lot of us around