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Temporary Employment on the Rise In KC

June 27, 2013

by Jeff Pinkerton

It has been no secret that Kansas City’s economy has been lagging during this recovery. Our employment growth has not been as nearly robust as what the nation and many of our peers are experiencing.  Adding to the concern is a new report  from Economic Modeling Specialist International (EMSI) showing that 47 percent of our wage and salary employment growth between 2009 and 2013 has come from temporary employment. (This does not include growth from proprietorship).

Only five large metros have higher shares of temporary employment over the period. Memphis tops the list at 116 percent, meaning they have lost permanent positions and replaced them with temporary ones. You can see where other peer metros fall in the EMSI report.

By comparison, EMSI estimates that 15 percent of all job growth nationwide has been from temporary positions. Today, the country has 765,000 more temporary jobs than it had in 2009. Washington D.C. had the smallest share at just 2 percent.

The occupations with the greatest increases in temporary employment are more likely to be in production fields (manufacturing and construction) but surprisingly, the number of temporary registered nurses grew by 46 percent between 2009 and 2013.

Occupations with Greatest Increase in Temporary Employment-Kansas City MSA

Occupation Employed in Industry (2009) Employed in Industry (2013) Num. Change % Change
Laborers and Freight, Stock, and Material Movers, Hand

1,389

1,958

569

41%

Assemblers and Fabricators, All Other

698

1,024

326

47%

Office Clerks, General

621

884

263

42%

Team Assemblers

592

828

236

40%

Packers and Packagers, Hand

429

636

207

48%

Human Resources, Training, and Labor Relations Specialists, All Other

308

502

194

63%

Construction Laborers

391

580

189

48%

Customer Service Representatives

400

583

183

46%

Helpers–Production Workers

412

594

182

44%

Registered Nurses

308

449

141

46%

Source: EMSI

Clearly, permanent employment has advantages to the employee, including higher pay and health care benefits. It used to be that temporary employment was a pathway to permanent employment, but that appears to be less and less the case these days. According to ManpowerGroup, in better times 60 to 70 percent of temporary workers would eventually receive full-time employment offers, but that has dropped to about 30 percent today.

Employers sometimes use temporary employment when they are not fully confident in the strength of the economy. In a downturn, it is easier to end the relationship with temporary employees than to let permanent employees go.

So, what does it mean that Kansas City has nearly half of its employment growth from temporary employment, while places like Washington, D.C., Houston and San Jose have much smaller increases in temporary jobs?

Are Kansas City employees less talented? Not likely. Our educational attainment remains above the national average. Perhaps the better question is, are Kansas City employers looking for talent? Some are, to be sure. But for those who need workers with fewer skills, temporary employees may make more financial sense in an uncertain economy.

This could prove to be a temporary phenomenon that will go away once the economy gains more steam and employers feel more confident. But the fact that other regional economies are able to reward talent with more permanent jobs is concerning.

This is one of those “more-questions-than-answers” posts. But any way you want to look at this data, it is not good news for Kansas City.  We will dive further into this in the future.

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