File this under “Department of Exaggerated Statistics.” In the wake of the news that a temporary help agency became America’s second-largest employer, stories have appeared claiming that enormous numbers of Americans work in temp help jobs.
On Sunday, the Associated Press reported:
Hiring is exploding in the one corner of the U.S. economy where few want to be hired: temporary work. From Wal-Mart to General Motors to PepsiCo, companies are increasingly turning to temps and to a much larger universe of freelancers, contract workers and consultants. Combined, these workers number nearly 17 million people who have only tenuous ties to the companies that pay them—about 12% of everyone with a job.
The economy is bad—but not that bad. Digging deeper into the numbers shows that the media accounts are exaggerated.
The number of temporary workers has increased from 1.8 million to 2.7 million since the recession ended. However, this amounts to only 2 percent of the workforce and reflects a return to pre-recession levels. The 17 million figure comes from a survey asking Americans if their job status was a “fixed term contract, independent consultant, freelancer, contractor, worked through a temporary or talent agency, on call arrangement, or own their own business with less than 5 employees.”
This covers an enormous variety of workers—almost anyone who is self-employed. As the Bureau of Labor Statistics (BLS) explains, many of the self-employed work as
construction managers, property managers, and management analysts. A number of jobs in sales and related occupations lend themselves to business ownership. For example, unincorporated self-employment rates were high for insurance agents, real estate brokers, and door-to-door sales workers and street vendors.…
A number of jobs in professional and related occupations have relatively high (above 10 percent) incorporated self-employment rates. For instance, the rate was very high for dentists, architects, physicians, and lawyers.
Most self-employed workers enjoy working for themselves. The same survey finds that only 13 percent of these employees with “tenuous ties to the companies that pay them” want a permanent full-time job. Over 70 percent are “highly satisfied” where they are. Two million make more than $100,000 a year. Lumping together small business owners, real estate brokers, and temp employees paints a confusing picture of the labor market.
The fact that temp jobs have fully recovered from the recession while permanent jobs have not is alarming. It shows that many businesses lack confidence about the future of the economy. But it is not true that one-eighth of Americans work in temp or temp-like jobs. Not unless you include doctors, dentists, and door-to-door salesmen.