Legal profession

The rise of the permanently temporary worker

May 5, 2011: 11:05 AM ET

Temp jobs are in and permanent ones are out, for now. And it doesn't look like there's a surefire route to go from one to the other, posing serious risks to worker morale and corporate growth.

By Elizabeth G. Olson, contributor

FORTUNE -- It's a glass half full/half empty situation. Well, maybe American employers just stole half a glass from their workers. The rise in temporary worker hires may be a smart business move, insulating employers in a volatile economy, or it could be creating a permanent wedge of cheaper, benefit-less workers that eventually supplants a big chunk of the full-time workforce.

It all depends on how you interpret a sliver of data on temporary hiring from the U.S. Department of Labor, which tracks job placements by temp agencies but not temp hiring by individual companies. The department also doesn't keep tabs on how often companies downgrade positions from permanent to temporary status.

The latest federal data show that 2.3 million people held temporary jobs in March, up from a low in mid-2009 of 1.7 million, as companies seek to satisfy customer demand without making long-term commitments to worker salary and benefits.

"Employers know that the economy could change at any time," says Jon Osborne, vice president for research at Staffing Industry Analysts, which follows temporary staffing agencies, "so by hiring somebody temporarily, companies have staffing for their peak needs but can let them go when they are no longer needed." More

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