Friday, June 04, 2010

Temporary Help Workers, Overtime Hours, Manufacturing Employment Increase in May

It's not all bad, here are some highlights from today's BLS employment report:

1) The number of temporary help workers increased by 31,000 in May to 2,086,000 employees (not counting temporary Census workers), the highest level in 18 months ago, since November 2008 (see graph above). The number of temporary workers increased in May for the 8th straight month, following 23 straight months of declines, and it marks the first time since 1999 of eight consecutive monthly increases. The 361,600 increase in temporary jobs since last October is the largest 8-month increase since this data series started in 1990.

2) Average manufacturing overtime hours increased to 4.1 hours in May (from 3.9 hours in April), reaching the highest level since 4.2 hours in November 2007, thirty months ago (see graph). Manufacturing overtime hours have increased or stayed the same in 13 out of the last 14 months, and overtime activity in the manufacturing sector has now returned to its pre-recession levels of 2007, reflecting continued expansion in U.S. factory output.

3)  Along with the increase in manufacturing overtime to pre-recession levels, the increase of 29,000 in manufacturing jobs in May is another sign that the manufacturing sector is expanding and continuing on a healthy path to recovery. Year-to-date, manufacturing employment has increased by 126,000 jobs, which is the first record of 5 consecutive monthly gains in factory jobs since 2006, and the largest 5-month increase in manufacturing employment since early 1998 - more than 12 years ago.

28 Comments:

At 6/04/2010 8:41 AM, Anonymous morganovich said...

that seem like a very selective use of data.

only 41k private sector jobs created is a terrible number. 3 out of 4 were temps.

that's a pretty grim situation.

 
At 6/04/2010 9:54 AM, Anonymous Anonymous said...

Increase in temporary worker used to be a good indicator as employers put their toe in the water rather than plunge in. No longer! Fox just reported that 31 percent of workers are now temporary. Why hire for real when globalization of the workforce creates a surplus of labor. Use labor only as needed in full confidence it will be there as needed.

 
At 6/04/2010 10:31 AM, Blogger Junkyard_hawg1985 said...

Total people employed in the U.S. fell by 35,000 in May. That is terrible for a month where the census bureau hired 400,000. The weekly initial unemployment claims were not any better. You did manage to find a silver lining in the dark cloud.

Much of the recent data on manufacturing employment, rail loads, shipping tonnages, etc. have pointed to a rebound in manufacturing supported by a strong export market. The rest of the U.S. economy still seems to be struggling. I still fear external forces (i.e. European debt crisis) can push us right back into a recession.

 
At 6/04/2010 10:59 AM, Anonymous gettingrational said...

Thousands of more Manufacturing jobs and lots of overtime is fantastic news. Question: The fact that more people are quitting their jobs, than are being discharged or fired, a solid indicator of growing employment health? I think so.

 
At 6/04/2010 11:00 AM, Blogger juandos said...

Well even the temp employee numbers are at best questionable...

 
At 6/04/2010 11:39 AM, Anonymous Anonymous said...

something strange is going on with these employment numbers. I find it hard to believe only 41K new private sector jobs were created. Maybe only 41K were filled....

If you accept the proposition that generous unemployment benefits increases the unemployment rate (which I do to a certain extent) and you accept the proposition that the people with the most difficulty getting re-employed in this economy are low-skill workers (which I do to a certain extent) is there an argument to be made that the government's census hiring has actually cannibalized a large segment of the employable and in-demand employees that would have been hired by the private sector in May? Is there an argument that some unemployed workers realize that private sector jobs are coming available now, so they are enjoying a few more weeks on unemployment before taking a position?

Look, this could be a crackpot theory. Just something to think about. I know in my region there are tons of jobs for skilled and semi-skilled labor that are going unfilled. In my industry, I know many, many firms who have been utterly unable to fill administrative and support staff positions in the past 6-8 weeks. Then again, the economy in my area never took a huge hit.

 
At 6/04/2010 1:03 PM, Anonymous Anonymous said...

The ADP estimate of 55,000 private sector jobs seemed a little low. But guess it wasn't.

As bad as Christina Romer's forecasting has been, she may have been right that the majority of the effect of the stimulus was last year. Yet the spending goes on.

Obama Economic Adviser: The Stimulus’ Impact on Economic Growth Has Past

 
At 6/04/2010 1:07 PM, Blogger sethstorm said...


Why hire for real when globalization of the workforce creates a surplus of labor. Use labor only as needed in full confidence it will be there as needed.

Bring the costs of temporary workers in line with permanent ones. No sense in giving them that weapon.

 
At 6/04/2010 1:39 PM, Blogger juandos said...

"Bring the costs of temporary workers in line with permanent ones"...

Well sethstorm are you going to use YOUR MONEY (as subsidies to the employers) to bring those costs in line with your idea of what's fair?

 
At 6/04/2010 1:46 PM, Anonymous morganovich said...

you should start a company seth.

i'm sure you'd do really well.

 
At 6/04/2010 1:59 PM, Blogger juandos said...

Over at Calculated Risk their take on temp employment is somewhat less optimistic than Professor Mark's posting is...

Temporary Help Services starting to slow, Small Business hiring "Bleak"

 
At 6/05/2010 9:13 AM, Blogger sethstorm said...


Well sethstorm are you going to use YOUR MONEY (as subsidies to the employers) to bring those costs in line with your idea of what's fair?

...and everybody loves being disposable to a business, and having no real negotiation position whatsoever.

Trying to circumvent things with temporary work only asks for it to be made no more advantageous compared to regular employment.



6/04/2010 1:39 PM
Anonymous morganovich said...

Try looking for work that isn't temporary/contract work.

That seems to be a very myopic perspective to simply look at it from that angle.

Better to make circumvention of regulations regarding employment no longer pay off.

 
At 6/05/2010 11:31 AM, Blogger juandos said...

Just what I thought, no answer from sethstorm but this makes NO sense at all: "...and everybody loves being disposable to a business, and having no real negotiation position whatsoever"...

What does this have to do with whether YOU will part with YOUR money to subsidize small, marginal companies who YOU don't think give a fair wage/salary to employees?

 
At 6/05/2010 12:53 PM, Blogger sethstorm said...


What does this have to do with whether YOU will part with YOUR money to subsidize small, marginal companies who YOU don't think give a fair wage/salary to employees?

And what part of it is simply asking me to take the sacrifice because I have the worse negotiation position? You are asking me to provide labor on conditions that I cannot/will not meet in good faith.

What says I have to take the larger sacrifice by being the provider of labor? Why is it that I have to be made disposable so that you can get around regulations? It's better to structure it such that there is no way to avoid the cost.

If you like screwing people over that way, give up your US citizenship, go to Europe, and start a staffing office. You will be more than glad to see people that are happy to be disposable.

 
At 6/05/2010 1:21 PM, Anonymous morganovich said...

seth-

you make this constant argument for making it difficult to use temporary and contract labor to favor "permanent jobs". what you are missing is that making it more expensive to hire and harder to fire increases unemployment.

this is precisely why europe has higher structural unemployment that we do and why their firms are more hesitant to hire coming out of downturns.

you are essentially arguing that increasing the price of labor will create more jobs, which is counter to fact.

labor is a commodity like any other: raise the price, demand drops.

what is it about that that you are finding so difficult to come to terms with?

if someone is willing to do the same job for less than you are, they will get hired. that's the market rate. if you mandate a price above market rate, then, at the margin, companies won't hire.

you seem to think the jobs are always there regardless of wage. they aren't. you demands for a "good job" reduce the number of jobs overall.

besides, lots of people prefer to do contract work. the tax situation is better, especially if you file as a sole proprietor. we have employees who we would hire full time but prefer to work as contractors to get the write offs. this is how my girlfriend works as well. not all contract jobs are bad jobs and many contract employees prefer it to a conventional contract.

in many cases, everyone wins.

 
At 6/05/2010 1:27 PM, Anonymous morganovich said...

"What says I have to take the larger sacrifice by being the provider of labor?"

the law of supply and demand says that. if there are lots of people who can and are willing to do what you do, then your skills are worth less.

you are essentially asking for price supports.

if 2 companies both make cars, one cheaply and one at great expense, do you propose we tax the winner to support the loser?

that's a recipe for economic collapse. you need creative destruction to take the poor producers out of the market and allocate the resources somewhere else. read your schumpeter.

the same is true of labor. providing price supports for labor that is not in demand prevents an economy from adapting to change. sure, it's hard to be the guy who has to take less money or retrain, but there is no other solution apart from punishing everyone and promoting stagnation to protect a few.

you have a very entitled view.

 
At 6/06/2010 10:19 AM, Blogger sethstorm said...

morganovich:

I wouldnt make the argument if the whole thing was not a one-sided raw deal. It reduces the negotiation ability of the person performing the work, since they have to trust the staffing agency in a time where it is the last thought on their mind. That is, they have to have trust that their contract is sound, that they are a good match for the work, and that nobody goes on a power trip. While it is possible for this to all go well, there is a greater incentive to not do so.

The reason I suggest to have it at parity with conventional FT employment is to remove the incentive to treat the contractee as a second-class citizen. Those whom truly want that work still have the option. Those whom use it as a tax/risk dodge (or worse) don't get to throw it all on the contractee. That is why I did not say 'ban it' instead of cost-parity.

I am quite sure that not enough robots or offshore labor exist to take up the slack. I just dont care to see our nation go Europe's way of increased temporary employment.

 
At 6/06/2010 11:35 AM, Anonymous morganovich said...

seth-

pretty much by definition, if you are doing temp work, it's pretty unskilled stuff.

you don't get temp lawyers, doctors, engineers etc. you get temp admin etc.

unskilled workers have low leverage to negotiate wages. always have, always will. mandating higher pay for low skilled work just destroys jobs.

the move to contract employment (which you are confusing with temp employment) stems from making it more expensive to hire and fire permanent workers. to encourage full time jobs, you need fewer rules, not more. raise the price of labor across the US, and jobs go offshore.

you seem to have this whole thing entirely backward.

there is no way to increase employment by making employees more expensive. this is particularly true in small companies where having to shell out unemployment can sink you if you hit a rough patch.

if you want to avoid looking like europe, you need to stop advocating copying their policies.

 
At 6/06/2010 11:37 AM, Blogger sethstorm said...


if you want to avoid looking like europe

Except for the part where Europe leaves the loophole for temp/contract work open. Closing it won't go the way of Europe.

 
At 6/06/2010 11:40 AM, Blogger sethstorm said...

It seems that is ok to force the hand of the unemployed, but it seems to be a cardinal sin to expect the other side of the table to willingly take a haircut.

 
At 6/06/2010 1:09 PM, Anonymous morganovich said...

seth-

the two forcings are utterly different. labor has no intrinsic value. it only has value if it is demanded.

paying a laborer market wage still pays them. nothing is being taken. to force a company to hire at above market (or marginal) rate takes from them.

if labor costs more than it can be profitably put to use for (and profit includes acceptable return on risk capital etc) then no one gets hired.

banning temp/contract work raises the cost of labor.

that will reduce demand.

that is an unarguable fact.

you seem to think that there are X number of jobs and it's just a question of what people are paid for them. that is not how it works. the number of jobs available is a function of wages paid. labor is a commodity like any other.

you are arguing for what YOU want despite it being against the greater good and basic economics. that seems a very entitled view to me.

you're going to have about as much luck repealing the economics of supply and demand as negotiating a 25% reduction in gravity.

 
At 6/06/2010 5:59 PM, Blogger sethstorm said...


banning temp/contract work raises the cost of labor.

I didn't make the suggestion to do so. I only made the suggestion to kill the risk/tax dodge part of it, with cost parity. If it still has that effect, there are ways of minimizing that from having any effect.

My thought is that if someone wants to do it, fine. No sense in banning it for the people that can view it as flexibility in their favor.

You presume that the market is simply a set of providers of opportunity + a small subset of people who justify it for the rest. It gets quite frustrating to take the larger sacrifice just for "the market" when it makes my situation worse. It is asking to throw incentives out the window.


labor is a commodity like any other.

However, it is one where you do not constantly remind people of that or make it that much worse.


you are arguing for what YOU want despite it being against the greater good and basic economics. that seems a very entitled view to me.

Understood. Also a part of why I don't ban the practice.

With that said, I don't know how many unemployed (that actually want work) that wouldn't be operating under similar incentives. 10% might sound reasonable, but much more than that and questions about regaining that loss come into play.

Are you going to do something if it means you're more likely to be worse off versus being better off, all things otherwise equal?


you're going to have about as much luck repealing the economics of supply and demand as negotiating a 25% reduction in gravity.

Only if you forget that you have to take the mass out of the Earth responsible for that 25%. Then you have the Moon to worry about as well. Then you have the orbit of each to worry about as well.

A very large engineering problem that isn't impossible, but very hard to get right. Removing people off the earth does not count (no matter how much you might want to include Congress).

 
At 6/06/2010 10:36 PM, Anonymous morganovich said...

seth-

"I only made the suggestion to kill the risk/tax dodge part of it, with cost parity"

you are literally arguing that raising the price of labor isn't raising the price of labor. making them the same price is functionally equivalent to banning contract work.

you still frame not working as a "sacrifice" like you are owed something. you aren't. you need to get over your outlandish sense of entitlement.

"me:
labor is a commodity like any other.
you:
However, it is one where you do not constantly remind people of that or make it that much worse."

that doesn't even make sense. what are you talking about? sounds to me like you need a serious reminder of that fact. labor is a commodity. that's the truth. it's ignoring that that does harm, not telling it like it is.

"Are you going to do something if it means you're more likely to be worse off versus being better off, all things otherwise equal? "
.
what i'm going to do is keep growing my businesses, hiring people, and prospering. if you make it difficult for me to hire, i won't. if you raise the price of labor, i'll hire less. as you say, why would i do something that doesn't make me better off?

you are still arguing from the viewpoint of someone who deserves/is entitled to a job. that's not how it works, you earn a wage. it's not an entitlement. wages are a function of productivity and skills. firms hire people to accomplish things. no one hires just to hire (apart from the government).

your gravity argument is as ridiculous as it is irrelevant. nothing is going to alter the fact that demand for labor drops as the price of labor rises. you think you are arguing for good jobs, but you are really arguing for fewer jobs.

 
At 6/07/2010 9:53 AM, Blogger sethstorm said...

This comment has been removed by the author.

 
At 6/07/2010 9:54 AM, Blogger sethstorm said...

Well, at some point said employers start working with the unemployed in the US to create a recovery, or they get forced into it - foot-dragging and all.

Some people are not going to make their situation worse. You're expecting me to do so because of other pressures that exist. I will not make that sacrifice knowing the economy will get worse.

Instead of passing extensions, how about making it increasingly harder for direct employers to say no, or act in bad faith?

 
At 6/07/2010 11:34 AM, Anonymous morganovich said...

"Well, at some point said employers start working with the unemployed in the US to create a recovery, or they get forced into it - foot-dragging and all."

so, employers should pay you what you want or you'll take it from them?

you may be the most entitled guy i have ever met. (and with worryingly fascist tendencies)

pay seth or you should be coerced? he is owed a living?

how would you feel if your corner store sold $8/gallon milk and demanded a law forcing you to buy it from them (work with them and not use cheaper alternatives like safeway or walmart) to keep them in business and give them a "decent living"?

i suspect you'd scream bloody murder. why are you OK doing it back to them on wages?

is it bad faith for you to shop somewhere else to save money? if you do, it hurts their livelihood and maybe their kids don't get braces or whatever. by your logic, we ought to ban shopping around or eliminate cost savings programs from grocery stores to prevent a drop in milk prices from harming the inefficient.

 
At 6/07/2010 1:16 PM, Blogger sethstorm said...


how would you feel if your corner store sold $8/gallon milk and demanded a law forcing you to buy it from them (work with them and not use cheaper alternatives like safeway or walmart) to keep them in business and give them a "decent living"?

i suspect you'd scream bloody murder. why are you OK doing it back to them on wages?

is it bad faith for you to shop somewhere else to save money? if you do, it hurts their livelihood and maybe their kids don't get braces or whatever. by your logic, we ought to ban shopping around or eliminate cost savings programs from grocery stores to prevent a drop in milk prices from harming the inefficient.

I already go there. Not so much $8 milk, but are known for their service that justifies higher prices.

The milk doesn't have a life of its own and the cow isn't that much better off. Comparing that in any similarity to someone's offer of labor(independent of the product produced) is quite inaccurate.

I am just quite frustrated with the amount of folks who want to go Galt just because the economy appears to have a favorable direction in a non-favorable time. They want a crisis until their favorite person is in office.

Be glad that I would rather have work (in my field where my skills are most relevant) than simply do nothing at all. It might be nice and all to have infinite extensions(and literally do nothing), but it is not irrational to avoid making the situation worse.

 
At 6/07/2010 2:45 PM, Anonymous morganovich said...

it's precisely accurate seth.

profit from the milk is income for the store owner, just like wages are your income.

you would hate someone to tell you you could not get the best price for milk, but you want to tell other people they cannot get the best price for an input they need.

such a stance is hypocritical.

you are not asking for work, you are asking for work at a wage you think is correct. if the employers disagree, bottom line is it is there job to give, not yours to have. they created it, not you, so they can allocate it.

make it too expensive to fill the position, and the position goes away. force us to pay $8 for milk, and we'll all drink something else and stop eating cereal for breakfast.

you are cutting your own throat.

 

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