Betty McCray, 53, has moved around a bit in her lifetime. She’s worked as a chef, a nursing home attendant and a welder. Throughout, she says proudly, she has “worked union,” even in states with anti-labor right-to-work laws, such as Tennessee, where she moved in 2010 to be closer to her son.
That changed in 2011, when she found work at a Nissan auto plant in Smyrna, Tenn., preparing parts for the assembly line. Not only is this job non-union, but McCray doesn’t technically work for Nissan — she’s employed through Yates Services, a temporary staffing agency. She’s one of a growing number of people who do the physically demanding work of manufacturing, but who, as temps, have none of the job security and few of the benefits that many Americans still associate with the sector.
McCray found the job through the local unemployment office, which referred her to Yates. As an “associate” (the firm’s preferred term for temp), she works alongside permanent Nissan employees, but she is treated differently. She says she is paid less, gets no personal days and has to bring a doctor’s note if she is sick. Her job feels precarious, like she could be let go at any time.
The path to becoming an “employee,” that elusive goal, is far from clear. Tracy Logan, 34, worked through Yates on Nissan’s assembly line for a year before winning a promotion to a position as a robot tender, overseeing the robots that spray paint on the car parts. To his surprise, he remained a temp. “When I first arrived at Nissan, that position was considered Class A — only Nissan personnel can hold that position,” he says. “I put in for it, thinking that would be a way of getting on with Nissan. Somewhere in there, they changed the classification of the job, but didn’t let us know.”
Such experiences are increasingly common, according to Leone José Bicchieri, executive director of the Chicago Workers Collaborative (CWC), a non-profit workers center that organizes low-wage and temp workers. Not only has temporary employment expanded into sectors that used to be sources of stable full-time employment, he says, but it’s often no longer really temporary. Some temps are brought on for only days or weeks, others work for years at the same plant through the same agency.
Organizers in the field, Bicchieri says, now talk about “staffing agencies” rather than “temp agencies,” and “direct-hire” workers rather than “permanent” employees. “It’s not a ‘temp’ job,” Logan says,“but it’s temp status.”
So is permatemping the new model in manufacturing? Nissan spokesperson Justin Saia maintains that temporary jobs can provide a route to direct employment. “Having contract workers enables us to further develop the skill sets of these employees to position them for direct employment opportunities with Nissan through our Pathways program,” he writes in an email. But on the other hand, he notes, “The contract jobs in our business model are designed to be long-term, stable jobs with competitive pay and benefits.”
Or, as Logan puts it: “They want us to be permanent temps.”
From ‘Kelly Girls’ to ‘strapping’ men
Kelly Girl Service, a staffing agency founded in 1946, pioneered the temp industry. Temping was originally framed as a way for white middle-class housewives to earn a bit of extra money, says Erin Hatton, a sociologist at the State University of New York at Buffalo and author of The Temp Economy: From Kelly Girls to Permatemps in Postwar America. Married women weren’t perceived as breadwinners in need of full-time hours or family-sustaining wages. “That’s how [temp agencies] gained entry into the labor market,” says Hatton, “but once they gained legitimacy, they were able to spread out.” She says that from the beginning, temp agencies had a toehold in manual labor and manufacturing, but they deliberately played up the “girls,” in part to avoid conflicts with then-powerful unions. By the 1970s, though, they began openly targeting men. One ad campaign from Kelly read, “Obviously, we can’t call ourselves Kelly Girl Service any more,” as it touted its stable of “big, strapping” male workers.
Kelly Girl Service became Kelly Services in 1966, and today its work placements range from offices to universities to banks to factories — including another Nissan plant, in Canton, Miss. The temp business has ballooned, comprising some 17,000 staffing firms in the United States with a combined 2012 revenue of $117 billion.
A 2010 report from the Bureau of Labor Statistics (BLS) found that “while manufacturing’s share of total national employment fell from 16.2 percent in 1990 to 9.8 percent in 2008, manu- facturing’s use of temporary workers greatly intensified.” Because the BLS categorizes temp workers as service employees regardless of the kind of work they do, the agency has no good data on how many of those “lost” manufacturing jobs simply migrated over to staffing agencies. But according to a 2004 report from the Council of Economic Advisers, a third of all temp service employees work in the manufacturing sector. “If the official manufacturing employment statistics are adjusted by this amount,” the authors found, “the decline in the level of manufacturing employment in the 1990s is eliminated.” In other words, a good number of jobs were simply outsourced right here at home, offloaded from company payrolls onto staffing agencies.
For manufacturers, says Hatton, the logic is simple: “They have none of the costs of outsourcing with all of the benefits of outsourcing and all of the benefits of a native-English-speaking local workforce.”
In many cases, that workforce is highly skilled, comprised of workers like McCray who have years of manufacturing experience under their belts. While temp agencies once emphasized unskilled labor, these days some openly recruit skilled labor on the cheap. A job application obtained this fall from the Smyrna, Ga., facility of gun manufacturer Glock lists six separate staffing agencies through which one can apply for a manufacturing or warehouse job. One of the agencies, Automation, recently posted a skilled machinist position on its website for an (unnamed) gun manufacturing company in Smyrna. The listing called for an array of skills:
Applicants must have experience operating the robotic machine, must be mechanically inclined, must have metal working experience. Applicants must also be able to read specs and be technically skilled.
Applicants would also have to be extremely flexible: “This position rotates weekly between 1st and 2nd shift (this is a requirement),” meaning day and evening shifts. And the wages on offer for all those skills and flexibility? “$10 hour to start, but depending on experience, may go up to $13.” According to the BLS, the mean hourly wage for a machinist last year was $19.65.
So much for the value of skilled labor.
Automation did not respond to repeated requests for comment.
This should remind us that manufacturing jobs weren’t good jobs because of the inherent value of the job, says Amy Traub, a senior policy analyst at the non-partisan think tank Demos. “They were terrible jobs until people organized.”
From the employers’ perspective, the temp revolution is driven more by a desire for a flexible, contingent workforce than by a desire to save money on worker wages. According to Steve Berchem, COO of the temp-industry trade group the American Staffing Association (ASA), once the staffing agency’s fees are factored in, the hourly cost of a temp employee to a client firm is about the same as a direct hire. “Where the cost savings come in,” he says,“is being able to size the business’s workforce to the demand of the day, so they’re not paying for idle labor that’s not productive. It just makes for a more efficient business operation.”
But data indicate that firms also save on benefits. While according to the BLS, 55 percent of private-sector workers get health insurance from their employers (and 79 percent of manufacturing workers do), the most recent survey data from the ASA indicates that just 17 percent of temps get healthcare coverage from their agencies. Berchem says that whether a temp agency offers benefits depends on whether the work is “higher skilled.” A computer programmer might get a 401(k), paid sick days and vacation that “would not be available” to a carpenter. Berchem says many temp agencies are gearing up to provide health plans to their hires through the Affordable Care Act, but according to a 2013 ASA report authored by Berchem, most agencies plan to pass the costs on to employees or client companies.
CWC’s Bicchieri says manufacturers may be playing a long game by building up a temp workforce to throw up obsta- cles to unionization, thus suppressing wages overall. “Some of these companies, they’ll have two, three, four different temp agencies at the same place, and some direct hires,” he says. “Now go try to organize that! It’s impossible.”
Berchem says there is little data to support this conclusion, but notes that it’s rare for one of ASA’s clients with a union workforce to use temporary workers.
Despite the many drawbacks of a temp job, anemic job growth during the economic recovery has meant that many blue-collar workers have few options beyond putting in their time as a temp in the hope that they’ll get hired full-time one day.
The lure of that elusive job is used to keep permatemps around. One of Nissan’s direct hires, Matthew Thornberry, 51, describes morning meetings at the company’s Canton plant, where “temporary workers keep getting told, ‘Nissan’s going to hire you, Nissan’s going to hire you.’ ” The ASA claims that 43 percent of temp workers get brought on as permanent hires, but the temp workers and advocates I spoke to, such as Betty McCray in Smyrna, doubt that’s true.
“We were promised to be hired on,” she says. Yet she and her fellow workers have remained temps for years.“Lots of temp workers have lost hope.”
It’s not enough that companies are widening profit margins on the backs of low-paid temps — in some cases, taxpayers are helping them do it.
A 2013 report from the policy center Good Jobs First, commissioned by the United Auto Workers (UAW), which is seeking to unionize Nissan’s Canton, Miss., and Smyrna, Tenn., plants, calculated that Mississippi handed Nissan nearly $1.3 billion in state and local subsidies to build the Canton plant in 2001. That includes a controversial type of subsidy in which Nissan gets a rebate on part of the taxes the state withholds from workers’ paychecks — in effect, as Good Jobs First puts it, this means workers are “paying taxes to the boss.” According to the report, this portion of the package alone — a 25-year, $160 million deal — was the largest such subsidy ever awarded, anywhere. The report calculates that taxpayers are paying more than $10,000 per job per year at the Canton plant that in many cases start at $12 an hour.
Nissan spokesperson Saia declined to disclose workers’ wages, but said, “Nissan has more than met the requirements for job creation called for in the state’s incentive package. Our 5,600 team members in Canton hold some of the most secure jobs in Mississippi and enjoy competitive pay well above the state average for manufacturing jobs and strong benefits.” This seems unlikely, as, according to BLS data, the median pay for a production worker in Mississippi is $13.71 an hour.
Glock, on the other hand, doesn’t get subsidies, but it does get public sector contracts. Lots of them. Most of the Glocks made in this country go to government agents, the military or police. In just the last two years, federal contracts to Glock topped $250 million.
Either way, public money is subsidizing these jobs. And that means the government should have some leverage over employment practices. The federal Service Contract Act requires contractors to pay service workers the prevailing wage and benefits for the area where they work, and the Davis-Bacon Act requires the same for federally funded construction and repair projects. By contrast, the only federal law covering manufacturing workers at government contractors required just the federal minimum wage plus time-and-a-half for overtime, and it was invalidated by a 1963 court decision. But Scott Amey, general counsel for the nonprofit Project on Government Oversight, says that before awarding any contract, federal officials are required to look at whether a firm has “a satisfactory record of integrity in business ethics.”
“That could be questionable if they’re using [a] temp agency,” he says.
Traub, who co-authored the 2013 Demos report “Underwriting Bad Jobs,” points out that several states and municipalities have passed ordinances that require companies receiving taxpayer subsidies to pay decent wages. The White House could go further and propose a “high-road contracting initiative,” Traub says, by making it “a criteria in an award that we can pick by those who pay more, have better benefits, have a better environmental or labor compliance record.”
A way out
Meanwhile, the workers at Nissan aren’t waiting — they have reached out to the UAW and are in the midst of protracted union drives in both Canton and Smyrna. Thornberry was one of the original group of workers at the Canton plant to reach out to the union in 2002, after seven months on the job. Temps, too, have been involved in the unionization effort from the earliest stages — a refreshing contrast to a historic use of temps by employers to bust union efforts, which dates back to a 1986 ruling letting employers legally lock out permanent workers and replace them with temps.
Logan, who’s been part of the union drive in Smyrna since last winter, says that the working conditions at Nissan are the best argument for unionization — including the temp status of a substantial portion of the workforce. He was particularly upset, he says, when he asked to take a day off to preach in his church only to be told his religion was an unacceptable reason to miss work.
Solidarity between temps like Logan and direct hires like Thornberry is key to the UAW’s Nissan campaign, which calls for giving workers of all statuses a voice on the job. The long-term goal of unionization, Logan says, is to do away with the use of temp agencies entirely.
They face an uphill battle — McCray, Logan and Thornberry all told me of one-on-one and group meetings where management pressured them to stop supporting the union. Thornberry says management hinted that the plant would move to Mexico if workers voted to organize. Since he got active in the campaign, Logan says, supervisors have threatened to send him back to the assembly line. (Nissan spokesperson Justin Saia writes in an email, “Nissan does not tolerate employee intimidation. Our history reflects that we respect the right of our employees to decide who should represent them.”) Conversely, as union talk grew stronger, some workers recently got a raise.
Meanwhile, CWC has moved into the legislative arena. It helped push through the Illinois Day Laborer and Temporary Services Act, which requires, among other things, detailed notification for workers of the terms of their employment and where and for whom they will be working. The group has won several class-action suits on behalf of temps as well. And CWC helped found a national staffing workers alliance, to unify temp worker organizing across the country.
“We view it like ending child labor,” Bicchieri says, “something that’s really going to take a social movement.”
This article was reported in partnership with The Investigative Fund at The Nation Institute, with support from The Puffin Foundation.