Home / Reports and Articles / Contractor Management

Staffing Industry Report - Manufacturing

March 30, 2007

Found! Half a million ‘lost’ manufacturing jobs

And they’re still in the U.S.

By Jon Osborne

I once saw a bumper sticker that read “I found Jesus! He was behind the couch all along.” That’s how I felt when I found half a million lost U.S. manufacturing jobs, washed up on an obscure taxonomical beach within the accounts of the Bureau of Labor Statistics.

Everyone knows that employment in the U.S. manufacturing sector has been shrinking (by 4 million jobs over the last quarter century to about 14 million today). These lost jobs are presumed to have moved offshore. But not all have. Something in the range of half a million manufacturing jobs have quietly gone temporary, saved for U.S. workers by our often disparaged industry.

Cause and effect
In 1980, temporary workers in the United States numbered about 400,000. Now, such workers number 2.7 million – and that’s just counting the ones who know they’re temporary, not including that guy down the hall who parked in your space this morning.

Simple recognition of reality is driving heavy adoption of temporary staffing in the manufacturing sector. Manufacturing is highly cyclical, and a small portion of its employment – that swing factor that is alternately hired in good times and laid off in bad – has effectively always been temporary. Formerly, those destined to be laid off in bad times just didn’t know it; now they do, and it’s better that they do. There are few things worse than being laid off unexpectedly.

Currently, while temporary work is about 2% of total employment, half again as large a proportion of manufacturing employment, roughly 3%, is hired through temporary staffing agencies. For some jobs, temps fill as much as 10% of the openings. And our research indicates the sky seems to be the limit. Buyers of temporary staffing services in the manufacturing sector predict the largest increases in usage rates.

Benefit and cost
The increased use of temporaries already is paying off in productivity. The renowned Upjohn Institute just released a paper saying that staffing agency workers have played a significant role in increasing manufacturing productivity. “We estimate that outsourcing to employment services inflated the annual growth rate of manufacturing labor productivity by … 14% over the 1989 to 2000 period,” the authors said.

Of course, the shift from traditional, high-paying union jobs to nonunion, lower-wage temporary jobs also is part of the picture, and that’s not something everyone welcomes. But given that these jobs would likely otherwise have left the country anyway, at least we can all applaud that they were retained for U.S. workers in some fashion – and for that, roughly 500,000 Americans can thank the staffing industry.

Skeleton crews, long hours
It might be added that this accomplishment was achieved despite razor-thin margins in the industrial segment (the type of job most often employed in the manufacturing sector), an economic condition that staffing firms are able to bear only through the sleekest of cost structures. Translation: Skeleton crews in tiny offices manned from dawn till dusk for the convenience of the temporary workers, often in odd locations (again, for the convenience of the workers).

As Labor Ready Inc. dryly puts it in its 10-K annual report (emphasis added): “Branch locations are generally staffed with two full-time employees; the branch manager and a customer service representative … Branches generally open by 5:30 a.m. and remain open until the last temporary employee is paid.”

So bear in mind, going forward, as you see the headline numbers on lost U.S. manufacturing jobs, that at least some of these “losses” are simply a matter of classification. Half a million manufacturing workers lost so far are alive and well and gainfully employed by you – the temporary staffing industry.

© 2000-2007 by Staffing Industry Analysts, Inc. - All rights reserved - Unauthorized copying, distribution, or alteration is strictly prohibited by law.

Click here for more information from Staffing Industry Analysts.