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Temp agencies: Shortcut to nowhere
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It seemed that Joseph Holman, a 51-year-old redhead from Brooklyn, had climbed into the middle class the old-fashioned way: by the sweat of his brow.

Two decades ago, Holman moved to California and settled down in Hayward, a working class city about 10 miles south of Oakland. He soon found work as a union laborer, earning $25 an hour plus benefits. Along the way, he married, had two sons, and purchased a spacious house in a quiet neighborhood — complete with flowers out front and a pool in the backyard.

What took 16 years to accomplish, however, the Great Recession quickly unraveled. Work at the union hall slowed to a trickle, then stopped. Last year, his unemployment ran out. Holman sent off countless job applications, but no one was hiring. Out of options, he recently turned to Labor Ready, the country’s largest blue-collar temp agency, where most jobs pay the minimum wage.

“They’re about to put a padlock on the door of my house,” Holman said, waiting in front of Labor Ready’s Hayward storefront. Facing imminent foreclosure, he’s moved all his furniture to his in-laws’ house. “We’ve got enough food in the fridge for a few days.”

Holman faces an emergency, but he’s far from alone. While the number of temp workers has increased sevenfold over the past four decades — ballooning to 2.5 million people today — the most dramatic increase has been among blue-collar workers. In 1989, for example, only 1 in 43 manufacturing jobs was temporary. By 2006, 1 in 11 was. “All I need is a real job,” he told me. “But now it seems everyone only wants temps.”

The temp boom has upended Holman’s life, but it is welcome news for companies like Labor Ready, which operates 600 offices and boasts a workforce of 400,000 — more employees than Target or Home Depot. Labor Ready’s parent company, TrueBlue, saw its profits rise 55 percent last year, to $31 million. TrueBlue CEO Steve Cooper, who took home nearly $2 million last year, predicts “a bright future ahead.”

But as I learned during a two-week stint working for Labor Ready, that “bright future” for investors and executives doesn’t apply to the company’s army of temps, who often spend hours each day in dispatch offices waiting for jobs paying poverty wages. Even worse, on multiple occasions I witnessed Labor Ready employees ordering temps to show up 30 minutes before a shift began, time for which they weren’t compensated. That amounts to wage theft.

Of course, one could argue that companies like Labor Ready simply provide a steppingstone to full-time employment. Unfortunately, data suggests otherwise. A 2010 study by economists David Autor of the Massachusetts Institute of Technology and Susan Houseman of the Upjohn Institute for Employment Research found that low-wage temp jobs play a negligible — even negative — role in boosting people’s earnings.

Tracking the earnings of nearly 40,000 welfare-to-work participants in Detroit, the authors discovered that people placed in permanent jobs enjoyed significant and lasting economic benefits. But after a short spike in earnings, those placed in temp jobs eventually saw a net decrease in income and employment, even when compared to workers who’d had no help securing work. Looking at the data, the economists determined that providing low-skill workers with a temp job “is no more effective than providing no job placements at all.” 

Any real recovery will have to provide stable employment to blue-collar workers, not short-lived temp jobs paying poverty wages. The trend of outsourcing blue-collar work to temps benefits giant corporations like Walmart — which frequently uses Labor Ready temps — while lining the pockets of executives running labor agencies. But for desperate workers who turn to temp agencies for a step up, too often they find only quicksand.