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"The Use Of Temps Is Outpacing Outright New Hirings By A 10-To-1 Ratio"

Tyler Durden's picture


For many months, if not years, we have been beating the drum on what we believe is the most hushed, but significant story in the metamorphosis of the US labor pool under the New Normal, one which has nothing to with quantity considerations, which can easily be fudged using seasonal and birth death adjustments, and other statistical "smoothing" but with quality of jobs: namely America's transformation to a part-time worker society. Today, one of the very few economists we respect, David Rosenberg, pick up on this theme when he says in his daily letter that "the use of temps is outpacing outright new hirings by a 10-to-1 ratio." And unlike in the old normal, or even as recently as 2011, temp hires are no longer a full-time gateway position: "Moreover, according to a Manpower survey, 30% of temporary staffing this year has led to permanent jobs, down from 45% in 2011.... In today's world, the reliance on temp agencies is akin to "just in time" employment strategies." Everyone's skillset is now a la carte in the form of self-employed mini S-Corps, for reason that Charles Hugh Smith explained perfectly well in "Dear Person Seeking a Job: Why I Can't Hire You." Sadly, that statistic summarizes about everything there is to know about the three years of "recovery" since the recession "ended" some time in 2009.

From Gluskin Sheff

More on that Payroll Report

The more we sift through it, the more we didn't like it. Even with the bump in June hours worked and average weekly earnings, the reality is that the Q2 results for both slowed markedly. The economy has hit stall speed yet again — the third time in the past three years.

On top of that, some other details in the data were disturbing. The ranks of the unemployed rose 29k on top of a 220k surge in May. Those who were unemployed and just completed temporary work soared 218k after a 137k increase in May to stand at the highest level since November 2010 (right when QE2 began!). The total pool of available labour jumped 258k to 19.3 million which means that there is now but one job opening for every six people out there who are either actively or passively looking for work. No wonder wage pressures are fading fast.

There are some pundits who believe that the +25k pickup in temp agency employment is a good sign since in the past this sector acted as a leading indicator for job creation... if only we can bring back those old days. In today's world, the reliance on temp agencies is akin to "just in time" employment strategies — the use of temps is outpacing outright new hirings by a 10-to-1 ratio. The reality is that few businesses want to commit and this shows through in the Household Survey as well with part-time employment in an uptrend and full-time in a downtrend. Moreover, according to a Manpower survey, 30% of temporary staffing this year has led to permanent jobs, down from 45% in 2011.

As this all relates to the upcoming U.S. election, there are some more interesting tidbits to chew on. Looking at the social groupings in the data, we see that since President °barna moved into the White House in January 2009, the unemployment rate for African Americans has climbed to 14.4% from 12.7%, the unemployment rate for Hispanics has risen to 11% from 10%, the unemployment rate for women has risen to 8% from 7%, and the unemployment rate for youth (20 to 24 years old) has jumped from 12.4% to 13.7%. By and large, these were the segments of the popu}ation that helped President Obama win in that historic election in November 2008. The Reaganesque' question that must be posed is: Are these folks better off than they were four years ago?

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Wed, 07/11/2012 - 19:06 | 2608176 jonjon831983
jonjon831983's picture

Remember the good ol days of 2010 when increasing temporary workers was a sign of a strengthening economy (as it was an indicator of future hiring intention)?

Wed, 07/11/2012 - 19:27 | 2608221 12ToothAssassin
12ToothAssassin's picture

I clicked the link to see the thumbnail pic larger. False advertising.

Wed, 07/11/2012 - 19:30 | 2608231 Paul Atreides
Paul Atreides's picture

Try here.

Wed, 07/11/2012 - 19:49 | 2608240 ihedgemyhedges
ihedgemyhedges's picture

Plenty of guys on here have a job she can do, surely....................I mean, I can think of two jobs right off the top of my head....................

Wed, 07/11/2012 - 21:06 | 2608477 tom a taxpayer
tom a taxpayer's picture

Yes, my dear, I see you are suffering from the chill. In this office my management philosophy is "Teamwork can solve any problem". How about I clamp my hot mouth over your cold nipple, and we work as a team to achieve entropy.

Wed, 07/11/2012 - 21:18 | 2608515 AldousHuxley
AldousHuxley's picture

In Japan 40% of recent jobs are temp jobs even if you have been working there 10 years.


but what isn't temporary these days?

temp marriage (who is married for life?)

temp homes (who lives in the same home 30 years?)

temp friends (who still has home town friends they grew up with?)

temp careers (who still works at one company more than 5 years?)

temp citizenship (see Eduardo Saverin changing citizenship twice,  Jim Rogers immigrated twice)



"single serving" - Fight Club



Wed, 07/11/2012 - 22:20 | 2608684 Arnold Ziffel
Arnold Ziffel's picture

Americans move on the average every  5 years.

Odd someone would sign a 30 year mortgage given that stat esp in a falling market.

Americans are uber-mobile and only getting mobiler. (I made that word up)

Wed, 07/11/2012 - 23:11 | 2608805 potlatch
potlatch's picture

but that can be attributed to typical US citizenism:  success = being uprooted for money$$ haha american citizenism

Wed, 07/11/2012 - 23:35 | 2608841 The Gooch
The Gooch's picture

As in Alabama?


Thu, 07/12/2012 - 00:25 | 2608942 The Big Ching-aso
The Big Ching-aso's picture



Temp or not I bet she's an accomplished head secretary.

Wed, 07/11/2012 - 19:34 | 2608242 Beam Me Up Scotty
Beam Me Up Scotty's picture

I'd hire her....not even temporarily.

Wed, 07/11/2012 - 19:43 | 2608271 SHEEPFUKKER

I might even work for her. 

Wed, 07/11/2012 - 19:54 | 2608288 Animal Cracker
Animal Cracker's picture

I will provide benefits.

Wed, 07/11/2012 - 20:45 | 2608424 TrainWreck1
TrainWreck1's picture

I want her for her mind.


Wed, 07/11/2012 - 21:54 | 2608620 ihedgemyhedges
ihedgemyhedges's picture

Mind, as in singular?  Because they both look fine to me............

Wed, 07/11/2012 - 23:13 | 2608807 potlatch
potlatch's picture

I will hire her, make her my boss, fire myself, and then beg on my knees for an entry level position with her

Wed, 07/11/2012 - 23:47 | 2608860 SilverIsKing
SilverIsKing's picture

Entry level? Would that be rear entry level?

Thu, 07/12/2012 - 00:27 | 2608950 The Big Ching-aso
The Big Ching-aso's picture



I see 2 big OSHA eye-safety violations right off the bat here.


Thu, 07/12/2012 - 08:05 | 2609389 Metalredneck
Metalredneck's picture

Proper eyewear recommended.  I suggest champagne glasses.

Wed, 07/11/2012 - 19:55 | 2608290 seek
seek's picture

I had a Ukrainian scammer send this pic to one of my online dating profiles, which blew their cover immediately. A man can dream, though.

Wed, 07/11/2012 - 21:56 | 2608627 ihedgemyhedges
ihedgemyhedges's picture

I hope you don't use that avatar in your dating profile...........because all you will get will be pics like hers.......

Wed, 07/11/2012 - 21:13 | 2608496 old naughty
old naughty's picture

Always treat the Temps with highest respects.


"A taxpayer voting for Obama is like a chicken voting for Col. Sanders." (eh, °barna )

                   Ronald kessler

Wed, 07/11/2012 - 23:37 | 2608843 The Gooch
The Gooch's picture

All of your air-conditioned nipples are belong to us.


Thu, 07/12/2012 - 08:31 | 2609452 ZeroAvatar
ZeroAvatar's picture

THANK YOU so much for the link, Quisat Hadirat!

Wed, 07/11/2012 - 20:12 | 2608334 Buck Johnson
Buck Johnson's picture

Loved the pic, funny as hell.  Also this is the new norm for american workers.  Temporary workers will be rage and when a company needs to get rid of employees they let go the temps and thats it.

Wed, 07/11/2012 - 20:56 | 2608452 sethstorm
sethstorm's picture

That's until the employer has to give the choice to be a temp and can't do anything to sour the non-temp choice.

Wed, 07/11/2012 - 21:06 | 2608479 philipat
philipat's picture

"I clicked the link to see the thumbnail pic larger. False advertising."

They look real to me?

Wed, 07/11/2012 - 21:23 | 2608530 ACP
ACP's picture

Must be the new admin at the pearl necklace factory.

Wed, 07/11/2012 - 19:08 | 2608182 Lost Wages
Lost Wages's picture

I think I am blacklisted at every temp agency in town.

Wed, 07/11/2012 - 19:12 | 2608191 Bobbyrib
Bobbyrib's picture

When I was temping, I was blacklisted from almost all of them too. If you turn down work, it tends to piss them off.

Wed, 07/11/2012 - 19:40 | 2608259 AssFire
AssFire's picture

I know a guy who owns a Link Staffing agency here in Texas. I visited him at his office- ONCE.

(DMV like)

Wed, 07/11/2012 - 19:08 | 2608188 Bobbyrib
Bobbyrib's picture

I agree it will be the new normal. The labor market in this country will be shit in this country for decades.

Wed, 07/11/2012 - 21:17 | 2608511 Bobbyrib
Bobbyrib's picture

Who downvoted you for an opinion that the labor market may not improve for years? Did someone from CNBC register for the site?

Wed, 07/11/2012 - 20:27 | 2608378 sethstorm
sethstorm's picture

Only as long as we are unwilling to make it impossible to pull these kind of stunts.

Thu, 07/12/2012 - 08:51 | 2609519 Raging Debate
Raging Debate's picture

The new normal for a decade anyways, until a large chunk of the Boomers retire and some trade rebalancing with China. Then there will be shortages and wages will finally rise. The articles here on ZH on small business becoming one-man bands rings true also. A decade of stagnation is a long time. Disrupts family formation for a generation.

Wed, 07/11/2012 - 19:09 | 2608189 zero19451945
zero19451945's picture

Labor got turned into a commodity like everything else.

For each American job there are 1000 people overseas that will do it for 1/10 the cost. Add in the fact that most Americans are cubicle jockeys that can be easily replaced and you've got a real problem.

Wed, 07/11/2012 - 19:15 | 2608199 Bobbyrib
Bobbyrib's picture

"Labor got turned into a commodity like everything else."

We're going back to the nineteenth century all over again.

Wed, 07/11/2012 - 19:51 | 2608281 tmosley
tmosley's picture

The 19th century was a transition state.  The 19th century isn't your destination.  Were that it was.  No, we are headed for feudalism.

Wed, 07/11/2012 - 22:06 | 2608651 HardAssets
HardAssets's picture

Yep, the 19th century was a wonder in comparison

Better to think in term of Europe around the year 1000.

Though it extended several centuries before and after that date.

Wed, 07/11/2012 - 19:37 | 2608252 Trimmed Hedge
Trimmed Hedge's picture

"For each American job there are 1000 people overseas that will do it for 1/10 the cost."


...and at 1/10th the quality....

Wed, 07/11/2012 - 20:32 | 2608389 AmCockerSpaniel
AmCockerSpaniel's picture

One rarely gets more than what they pay for, but we all know that.

Thu, 07/12/2012 - 05:59 | 2609182 Freewheelin Franklin
Freewheelin Franklin's picture

Yes, Marx referred to "goods and services" as "commodities". To Marx, a toothbrush was a "commodity".


The fact is, labor is a "service" which can be bought, sold, or traded.


For each American job there are 1000 people overseas that will do it for 1/10 the cost.


That's called "comparative advantage". 

Wed, 07/11/2012 - 19:15 | 2608200 schadenfreude
schadenfreude's picture

Hope and change FTW

Wed, 07/11/2012 - 19:18 | 2608208 orangegeek
orangegeek's picture

The entire private sector and some public sector find it less expensive to pay a contractor/temp that to pay a full time employee plus payroll deductions.


Everyone is getting frugal.

Thu, 07/12/2012 - 06:27 | 2609199 Bob Sacamano
Bob Sacamano's picture

Obamacare will make it much worse.  Lots of temp workers and lots of 25 hour per week workers (the new "full time"). 

Mandating benefits and barriers to firing is so European.  You asked for it US. 

Wed, 07/11/2012 - 19:22 | 2608212 The Gooch
The Gooch's picture

All of your manpower are belong to us.

Wed, 07/11/2012 - 19:27 | 2608213 random shots
random shots's picture

The bubble economy (overconsumption/housing) led to workers who were overpaid/overemployed for too long. Labor was turned into a commodity because the skill sets between the unemployed drones are little changed. Not saying it is fair...just the way it is. You figure if you can't get paid what you want you better develop the skills that are in demand. Work smarter and harder.  

Wed, 07/11/2012 - 19:58 | 2608299 James_Cole
James_Cole's picture

You figure if you can't get paid what you want you better develop the skills that are in demand. Work smarter and harder.

You are generally right and this is a nice sentiment in theory, but in practice I'd like to hear suggestions of what these skills are. 

As was posted on this site not so long ago, Citi's global risk management group was replaced by IBM's new supercomputer. Not exactly lightweight skills. 

If you plan on developing any level of advanced skill you're talking a 5-10yr education (not necessarily at a school) - what advanced skill-level jobs 5-10yrs from now won't have been made mostly redundant by development of sophisticated computers and software?

From navigation to language computers / software are getting to the point where increasingly little human involvement is necessary. 

Wed, 07/11/2012 - 20:25 | 2608374 random shots
random shots's picture

Too be honest it is the staple skills that most people lack. Effective communication, interpersonal skills, and how to balance a checkbook.  We recently interviewed college students from my alma mater (Calif. State University) and I could not believe how unprepared these kids were. They were unable to articulate why they were applying for the job, why they would make a good fit, and what they brought to the table.  These were all business college students expected to graduate in one year....

Also, the woes of small business owners is to a large part self inflicted.  I work in small business lending and I am always surprised to see how piss poor so many smal businesses are  operated. The owners who got paid during the last economic cycle spent most of it (not reinvestment in the company but consumption).  The balance sheets of small business owners are appaling...can't invest in new projects because they do not have the funds which means no new workers. 


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