Researchers release first-of-its-kind report on temporary employment in Massachusetts

FOR IMMEDIATE RELEASE
June 14, 2011

CONTACTS:
Marcy Goldstein-Gelb, MassCOSH (c) 617-642-1878
Jeff Newton, MassCOSH (c) 315-546-6391

Researchers release first-of-its-kind report on temporary employment in Massachusetts

Authors document the impact of an unregulated and rapidly-growing industry on vulnerable workers, their communities and the state’s economy

BOSTON, MA – Evelyn Sanchez has spent most of her time living in Massachusetts working as a temp. She has worked as a housekeeper, a recycling sorter, and at a paper factory. She often works 12 hour days for as little as 4 dollars an hour. She receives no benefits, never knows if she will have work, and yet she is completely dependent on the temp industry to make a living. In a new report on the economic effects of the temporary work industry in the state of Massachusetts, the plight of Sanchez and tens of thousands of additional low-wage temp workers is detailed, along with how the 65 billion-dollar-a-year industry is shaping the twenty-first century workforce.

Authors Harris Freeman, J.D., an associate professor at Western New England University School of Law and George Gonos, Ph.D, a professor of Sociology and Employment Relations at the State University of New York, Potsdam released the report at the State House accompanied by affected temporary workers and Rep. Linda Dorcena Forry, the lead sponsor of a bill that would reform the state’s Employment Agency Law (HB1393)

The 42-page report is titled “The Challenge of Temporary Work in Twenty-First Century Labor Markets: Creating Flexibility with Fairness for the Low-Wage Temporary Workforce.” The first comprehensive report on low-wage temporary work in the country, it is part of a series of reports produced as part of the University of Mass Amherst’s “The Future of Work” publications.

“This report is the result of months of research on a growing but little understood component of our economy,” said Gonos. “Through our investigation, we discovered troubling practices employed by an expanding number of low-wage temp agencies to avoid providing their workers time-honored legal rights such as overtime pay, workers’ compensation insurance, and basic safety protections.”

Citing 110 sources, the document details the rise of temporary employment agencies in the state since the 1960, a time when temporary employment was a marginal fraction of the overall labor marker. The report states that in 1963 there were less than 20 “temporary job services” in the Commonwealth, with yearly gross business estimated at $4.5 million. In 2008, the U.S. Census counted no less than 941 commercial temporary help firms in the state, employing around 65,720 temp agency workers each day. This astronomical growth has contributed to the transformation of the blue-collar labor market in the Commonwealth – lowering wages, reducing benefits and bringing down the overall standard of living for workers.

“This report is showing us the real erosion of our traditional ideals of employment – a model where an individual with a good work ethic and desire to help their employer is rewarded with increases in salary, benefits and stability,” said Freeman. “Instead we are finding this ‘standard’ employment relationship, a cornerstone of the prosperity of the post-World War II era, is no longer available to a large segment of the American workforce.”

The report identifies four major problems with confronting the low-wage temporary staffing industry:
• Lawlessness. The low-wage temporary workforce is unregulated. Low-wage temps comprise a highly vulnerable segment of the workforce often laboring in an underground, shadow economy.
• Pervasive wage and hour law violations. Triangular employment – characterized by the use of a temporary staffing agency or another commercial labor market intermediary to divide and disaggregate employer responsibilities – creates new challenges for the enforcement of wage and hour laws in the low-wage economy.
• Hazardous conditions and safety violations. Blurred lines of employer responsibility and the widespread malfeasance of low-road temporary agencies and client businesses have resulted in the under-enforcement of safety standards for temp workers.
• Tax fraud. Temp agency fraud, amounting to tens of millions in lost revenue, has burdened taxpayers and government. For example, in 2010, two staffing agencies were identified as responsible for as much as $45 million in unpaid workers’ compensation insurance, federal withholdings, and social security and Medicaid taxes.

Surprising facts reveled in the report also include:
• The increase in “permatemping” within certain occupational niches, using temps to staff entire clusters and industries indefinitely without needing to provide any benefits traditionally associated with full time work.
• Temp worker are employed in some of the states most hazardous jobs, including waste recycling, fish processing, and construction.
• Unregulated temporary staffing agencies now comprise well over 70% of the industry in the state and the region.

“As a member of the Reform Employment Agency Law Coalition, this report reaffirms our belief that temp jobs need massive reform if they are to contribute positively to the Massachusetts economy,” said Marcy Goldstein-Gelb, Executive Director of the Massachusetts Coalition for Occupational Safety and Health. “Not only are these jobs extremely low pay and often hazardous, but they are employing practices that violate fair and established labor laws, such as paying workers for overtime and providing workers’ compensation to those who are injured on the job and unable to work for long periods of time.”

The full version of The Challenge of Temporary Work in Twenty-First Century Labor Markets: Creating Flexibility With Fairness for the Low-Wage Temporary Workforce can be found at www.masscosh.org.

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