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How Temps Who Power Corporate America Are Getting Crushed

Daily Ticker

In an economy where job growth has been sluggish four years into an economic recovery, one type of job continues show strong growth: temporary employment.

A special investigative report from ProPublica found that there are more temporary workers than ever—2.7 million, according to the latest jobs report. And as many as 13 million people seek temporary employment annually, or 1 in 10 workers, according to the American Staffing Association.

Michael Grabell, the reporter who wrote the story "The Expandables: How the Temps Who Power Corporate Giants are Getting Crushed," tells The Daily Ticker that blue-collar jobs account for almost all the growth in temp jobs.

The reasons: companies save money and increase their flexibility. “Many of the temps working in the blue collar economy are making minimum wage or close to minimum wage… and don’t get health benefits,” says Grabell. “They rarely have retirement plans… they have unpaid hours of waiting and there are safety issues.” Temp workers on average earn 25% less than full-time workers, according to ProPublica.

Many of the country’s biggest companies use temp workers in their supply chains. Grabell lists Wal-Mart (WMT), Nike (NKE), Frito-Lay (PEP) and Macy’s (M) among others.

Related: The Labor Market is in Worse Shape Than You Think

And the Occupational Safety & Health Administration in late April reported that many of the thousands of workers who die each year on the job from preventable hazards are “temporary workers who often perform the most dangerous jobs, have limited English proficiency and are not receiving the training and protective measures required.”

OSHA ordered agency administrators to assess whether employers using temporary workers are complying with safety and health regulations and whether temp workers are receiving training in languages they can understand.

Companies using temp workers can also bypass regulations and other costs. Grabell tells The Daily Ticker, “By going to a temp firm, host companies can avoid worker’s compensation for those employees… unemployment taxes on those employees… and any sort of union drive.”

Related: More Government Job Cuts are Coming: BofA Economist

In addition, those companies can shift the responsibility of whether or not the worker can legally work in the U.S. to temp agencies, which often don't check. Grabell says economists point out that an increasing number of companies are turning to temps to avoid paying for health care, required by the new health care reform law set to take effect next year.

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