Temp job market can be a mixed blessing for workers

John Greenwaldt
John Greenwaldt is applying a polyurethane coating to a circuit board at Nortech's plant in Merrifield, Minn. Greenwaldt has a temporary job at the company but is hopeful that he'll get hired full-time.
MPR Photo/Annie Baxter

Temporary employment agencies are one of the few bright spots in the job market these days and experts keep an eye on the industry because it often signals the beginning of an economic recovery. But for workers, the low-paying jobs can be a mixed blessing.

You could say that for John Greenwaldt, the path out of the recession is coated with polyurethane. Greenwaldt is a temporary worker at a print and circuit board factory run by Nortech Systems Incorporated, an electronics manufacturer.

Last May, Greenwaldt got laid off from a high-skill machining job. That put his family in a financial bind: he and his wife have six kids.

Then a few months ago, Greenwaldt learned that Nortech was hiring 20-30 temp workers at a plant in Merrifield, near Brainerd. Greenwaldt was happy to land a spot.

Greenwaldt said the job market before landing the job was pretty bleak.

"Not much out there. Nobody's hiring," Greenwaldt said.

In fact, the pink slips are still flying. In October, the nation's employers slashed payrolls by 190,000 workers.

But temp hiring, on the other hand, recently surged to its highest point in two years. In October, temp worker payrolls swelled by 34,000 nationally -- the third straight month of growth.

Economists view temp hiring as a vote of confidence about the future by employers and a way to hedge their bets as well.

"We're a little skittish based on what's happened in the economy in the past nine months about creating permanent jobs and only have to turn around and lay the people off again," said Mike Degen, chief executive of Nortech, the company where John Greenwaldt found work.

Nortech runs 5 plants in Minnesota and is headquartered in Wayzata. Like many executives, Degen had to slash his workforce earlier this year -- by 40 percent.

But new orders from customers are starting to pile up, so Degen needs more hands to solder and coat circuit boards to fill orders. For now, hiring temps is a low-risk way to meet growing demand.

"Eventually if the production requirements continue, we'll convert those temporary jobs to full-time employment," said Degen.

And, Degan said, they'll convert them to a higher pay scale, too.

But Heidi Shierholz, an economist with the Economic Policy Institute, said that's not always a temp worker's trajectory.

"Temp jobs in general tend to be lower quality jobs," Shierholz said. "They tend to have lower wages, lower benefits, and by the very nature of the work, there's very little chance to advance."

In Minnesota, temp wages in 2008 came in about 46 percent less than the state's average annual wage.

Still, job seekers should not shun work, even if it's only pulling in, say, $8 an hour. That's the view of Georgetown University economist Anthony Carnevale, who once headed the National Commission on Employment Policy.

"It's better to be working for $8 than staying at home," Carnevale said. "That's what the data said. Because in the end, if you look six, seven years later, the people who went to work at $8 [per] hour had much more chance of recovery."

Sue Hilgart, team leader at a workforce center in Brainerd, agrees. But she said some job seekers need persuading to take temp work. They may earn just as much from unemployment benefits.

"That's a real concern that we have that people are choosing to stay on unemployment and continue to receive extensions rather than taking employment that's available," Hilgart said.

John Greenwaldt didn't struggle with the decision about whether to take a temp job at Nortech, even though his contract could run out and he's only making $8.50 per hour -- about 40 percent less than his last full-time job. Still, he's happy for the work -- and feeling optimistic.

Greenwaldt said he's not sure if temp hiring augurs a broad economic recovery, but it may well mean his own job recovery is getting started.