More “temps” is the workforce … is that good or bad?

Prof. Mark Perry of AEI crafted the below chart and observes …

Employment in temporary help services grew by 16,100 jobs in February, bringing the total number of temporary and contract workers to 2.58 million last month, the highest level since August 2007.

As a leading indicator of overall US labor market demand, the ongoing positive trend in temporary hiring is a sign that the labor market is gradually improving and suggests an increased pace of broader-based hiring for workers going forward in 2013.

It’s also likely that many employees who initially get hired on a temporary basis will be offered employment on a full-time permanent basis as the economy improves.

Prof Perry sees the glass as half full

image

Predictably, I see the glass as half-empty …

My take:

1) Companies are going to remain flexible as far as my economics eyes can see.  Watch the temp levels continue to grow and stay at very high levels.

2) Part of the upswing is ObamaCare related.  Most temps are part-time workers, and once a company pushes an employee past 30 hours into full-time status, costs take a step change up. See Forbes article

I think we’re witnessing a permanent remixing of the labor market.

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