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Counting Temporary Workers Would Give Manufacturing a Boost

May 11, 2015
Temporary workers aren't counted in manufacturing labor numbers, but they are a substantial portion of the workforce.

Temporary employees are not counted as part of the manufacturing workforce by the U.S. Department of Labor, so economists and statisticians are left to give their best guesses based on the data that is available. But the consensus is that temporary workers would add significantly more jobs in manufacturing to the U.S. total. And productivity totals for U.S. workers in manufacturing would be somewhat lower than current official estimates.

A 2012 study by Matthew Dey, research economist at the U.S. Bureau of Labor Statistics, and colleagues, estimated that in 2009, contingent employees—temps, independent contractors, and Professional Service Organization employees—amounted to 7.5% of the manufacturing workforce.

Following up on those numbers, an April 2015 brief Jessica R. Nicholson, an economist for the U.S. Department of Commerce’s Economics and Statistics Administration, hypothesized that temporary workers “fill somewhere in the range of 8 to 10 percent of all jobs in production occupations in the manufacturing sector.”

To arrive at that figure, Nicholson looked at the Occupational Employment Statistics’ total of temporary workers in production occupations—672,500. But only 75.6% of production workers are employed in manufacturing, so she applied that percentage to the total and arrived at 508,400 temp jobs in manufacturing—or about 8% more manufacturing jobs added to the 6.2 million permanent employees in manufacturing production.

Nicholson also crunched the numbers another way, with data from the Census Bureau’s Annual Survey of Manufacturers and Economic Census, which asks manufacturers how much they spend on temporary and leased employees. In 2013, manufacturers spent $32 billion on these employees, or 5% of the total payroll for manufacturers and 8.6% of payroll for production workers.

However, both Nicholson and Susan Helper, chief economist for the ESA, stress that the data is inconclusive because official statistics fall short in measuring temporary workers. The Department of Labor used to do a contingent worker survey--counting independent countractors, on-call workers, contract firm workers, and temporary help agency workers--"but hasn't had the funding to do that in many years," says Helper.

"And the second issue is, as the economy gets more complicated, this allocation of each [business] establishment to one industry is problematic for a bunch of reasons. It's something that statistical agencies are trying to do, to make sure we report in a way that keeps up with the economy. But right now it's tough because of the way this data is set up."

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