Recently, there has been a lot of attention paid to the increase in the hiring of temporary workers. It makes sense on the surface that when the outlook for economic growth is uncertain, companies turn to temporary employees. Moreover, gains in temporary employment historically predict broader gains in the labor market. But what do the numbers actually tell us about what is really happening?
The chart above shows temporary employment in California as a percentage of total nonfarm payrolls. Although there has been an increase in temporary hiring since the end of the recession, employment in general has also been on the rise.
Temporary employment as a percentage of total nonfarm employment has risen only slightly – from 2.3% in 2009 to 2.6% in 2011 – and remains well below the peak of 3.4% in 2000, a time of robust economic expansion (GDP expanded by 4.1% in 2000). The number of temporary jobs is also well below the average level recorded from 2000 to present.
Job gains in California over the year to August have been broad based. The industries that have been growing fastest generally require higher levels of education and/or skills. These are jobs that require more employer investment in human capital and thus are less likely to be filled by temporary workers.