NCPA - National Center for Policy Analysis

Full-Time Employment: A Thing of the Past?

October 26, 2011

Despite disappointing job numbers nationwide, an increased demand for temporary workers is one of the few bright spots in the U.S. economy.  Just last week, the Federal Reserve cited demand for temporary employees in four of its 12 districts, says Fox Business News.

Though companies typically hire more temporary workers in the wake of a recession in an attempt to ramp up their workforce after cutbacks, some analysts are pointing to recent temporary employment gains as evidence of a new workforce trend, sparking debate over whether or not businesses are making temporary employees a more permanent solution.

  • The hiring binge of temporary and contract employees is likely to persist, according to a recent report from the National Center for Policy Analysis, as employers continue to face uncertainty about the economy and the regulatory environment.
  • The trend is also being driven by the growing albatross that is health care reform, as many employers are worried about the coverage costs associated with adding full-time workers.
  • Indeed, according to the Bureau of Labor Statistics, since 2004, the cost of benefits has grown faster than wages and salaries, making temporary employees who do not receive benefits all the more attractive, even if their wages tend to be slightly higher.

As the cost of providing benefits continues to go up, temporary work will likely become more common.  Proponents say the fact that entrepreneurs and small businesses are able to keep their costs low when they're starting out by hiring contract employees actually helps to create more full-time jobs, long-term.

Source: Kathryn Glass, "Full-Time Employment: A Thing of the Past?" Fox Business News, October 25, 2011.

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