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Why Agencies That Turn Full-Time Jobs into Temp Work Are Suddenly Facing Huge Obstacles

It all starts with a little solidarity.


The following article first appeared at Working In These Times , the labor blog of In These Times magazine. For more news and analysis like this, sign up to receive In These Times ' weekly updates .

Do you know who your boss is? Wherever you are in the world, it’s getting harder to tell who’s responsible for making your workday miserable.

When Walmart warehouse workers in California and Illinois  went on strike last month, they weren’t just challenging the world’s retail hegemon, they were rising up against a broader global traffic in manpower. Many of the protesting workers had been hired indirectly through staffing agencies.

Working through agencies has become the new normal. Instead of the traditional way of connecting people to work--employing them directly--corporations rely on agencies to supply workers in various industries, from shipping to electronics, while minimizing obligations to offer job security or decent working conditions. It’s a perfect tool for displacing regular workers and doing end-runs around unions and workers’ rights.

A new global union coalition, the Geneva-based  IndustriALL, has pioneered a movement to confront this emerging regime of “precarious labor.”  The group's new report calls out these agencies, the unscrupulous firms who use them, and the government policies that abet the downward spiral of deteriorating rights and labor conditions.

The report, drawing from data in several countries, shows exactly why agency labor is so appealing to capital. Fluid workforces are structurally designed to be unstable, allow industry more latitude to marginalize workers through outside agencies.

According to the report, “the industry’s global annual sales revenue increased from €83 billion [$103.4 billion] in 1996 to €203 billion [$265.1 billion] in 2009 and the number of agency workers has more than doubled over the same period.” The organization says this system effectively  the different players involved--the contractor, the “user” company, and workers--to keep employees isolated and thus more vulnerable.

It’s a win-win for firms, which get the labor of a regular workforce without taking on the responsibilities. Workers, meanwhile, are typically deprived of adequate union representation or other leverage to hold the contractor or the firm responsible on issues like leave benefits and workplace safety. That leaves them vulnerable to discrimination and unfair treatment.

The proportion of the workforce employed through agencies varies by country, and statistical data can be murky, but agency-based employment pervades both rich and poor countries, prompting outcry among labor activists from  Colombia to India to Indonesia.

IndustriALL reports that “Approximately 60% of the 400,000 workers in Mexico’s electronics industry work for temporary agencies, with some companies employing as much as 90% of their workforce through agencies.” The system has captured tens of thousands of workers in Russia’s chaotic economy, with agencies serving “nearly 75% of foreign companies and 35-50% of Russian companies.” In Spain, where austerity budgets and neoliberal policies are  driving massive unemployment and social unrest, “temporary work constitutes 30.9% of all employment, and agency work accounts for 1 in 6 of all temporary contracts.”

One study on Indian workers “found that 30% of all workers in the private sector are employed via contractors, with levels in manufacturing up to 50%.” In China, manpower agencies have become a pillar of the labor market, offering "an estimated 60 million labour dispatch temporary workers.” Nokia and Apple, as well as government-run companies, are known to  stock their assembly lines with a dense second tier of contract labor, which tends to lack the rights and benefits of direct hires.

But for people who need work, a temp job is better than no job, right? Actually, what the labor agencies euphemistically describe as “flexible” labor is a dead end for countless workers. One study on workers in the Philippines shows, according to the report, “only 11% of agency workers move to regular, permanent or full-time work, 36% are not rehired and less than 1% of employers intend to convert agency jobs into regular positions.” In the U.S., just a fraction of temporary agency workers land a permanent position--maybe one reason why the chronic insecurity of the  legions of underemployed workers persists despite the so-called economic “recovery.”