Grabell wins the July Sidney Award for his portrait of our “permatemp” nation
Michael Grabell wins the July Sidney Award for “The Expendables: How the Temps Who Power Corporate Giants are Getting Crushed.” Grabell documents how corporate America eliminated countless full-time jobs and replaced them with a shifting cast of exploitable “permatemps.”
Every morning, countless Americans rise before dawn to check in at labor agencies, but they are not day laborers. These people waiting in hard-backed blue chairs under fluorescent lights are officially employees of staffing agencies. If they are lucky, they will pile into overcrowded vans to spend the day working for big companies like Walmart, Macy’s, Nike, and Frito-Lay. These particular workers may not be asked back tomorrow, but others will replace them. Temps have become a permanent part of doing business.
There are 2.7 million temporary workers in the United States, more than ever before. Temp jobs account for nearly one-fifth of all job growth since the end of the Great Recession, and one out of ten Americans will take a temp job in any given year. Blue collar jobs have been especially hard-hit by the temp trend.
Temps earn 25% less than permanent workers doing the same job. They are more likely to be injured at work and less likely to collect employment benefits.
Companies hire temps to insulate themselves from their responsibilities to the people who work for them. José Miguel Rojo packed frozen pizzas for the same Walmart supplier for eight years—as a temp—before an injury cost him his job last summer. Big companies can shrug off poor working conditions or immigration violations in their own factories because the workers officially work for the temp agency.
Temp Nation didn’t spring up overnight. In the 1960s the temporary labor industry set out to change the conventional wisdom that employees are a company’s greatest asset and convince employers that full-time workers are a burden to be minimized. To corporate America, it was a compelling proposition: Temps don’t ask for raises, they can’t organize unions, and they rarely complain about bad working conditions. They can be laid off in large numbers without generating bad publicity.
“Grabell shows that the tempification of America was no accident,” said Sidney judge Lindsay Beyerstein. “His reporting demonstrates that the shift from perm to temp was a systematic bid to undermine the employer-employee relationship and shift the balance of power in favor of the employer.”
Michael Grabell is a reporter for ProPublica covering economic and labor issues. He is the author of Money Well Spent?: The Truth Behind the Trillion-Dollar Stimulus, the Biggest Economic Recovery Plan in History. Before coming to ProPublica, he was a reporter at the Dallas Morning News.
- Your story opens with a powerful description of temp workers piling into vans at 4:30a.m. How did you go about reporting that scene?
I spent several early mornings in the Chicago area and New Jersey this winter watching temp workers pile into vans. I tagged along with Rosa waiting alongside the other workers inside the agency. Some of the other anecdotes came from interviews with more than 100 temp workers in the Chicago area, New Jersey, eastern Massachusetts and elsewhere.
- “The Expendables” is a very richly reported piece that draws on many types of information: data analysis, on-the-ground reporting, historical research, etc. Can you give us a 30,000-foot view of the various components of the story and how they fit together?
The different types of reporting happened somewhat simultaneously. But to give a chronology to it, my interest in this topic was sparked in 2009 and 2010 when I was reporting on the economic stimulus package and encountering worker after worker who had lost a well-paid manufacturing or construction job and returned to work in one of these unconventional employment arrangements.
As I worked on other stories, I began gathering string starting last summer, reading the academic research and talking to worker centers and advocates who were willing to show me the problem. In the meantime, I began pulling all the available data I could from BLS, OSHA, the Census, etc., to see what trends I could draw.
However, I didn’t really begin working on this series full-time until January. After gathering data and meeting workers, I began several months of shoe-leather reporting to document the problems. This was the second in the series. The first story about labor brokers known as raiteros in immigrant Chicago neighborhoods was published in April.
- The temp sector has played an outsized role in post-recession job growth. How does the temp boom contribute to rising income inequality?
Temp workers are often paid the minimum wage (sometimes minus fees) with no benefits, little opportunity to advance within a company and little power to push for a raise. Since the host company is not the legal employer, the worker has no direct outlet to the person controlling the wage or work environment. This is what the host company will pay for the service and if the worker isn’t willing to accept it, another worker at his temp agency or another temp agency will. In some temp contracts, even though they are regular employees for weeks, months or years, they are legally hired and let go every day. Regardless of the regularity, many temps say it’s difficult to get car loans and rental leases (let alone mortgages) because the work is considered unstable.
- You found that temporary workers have become an integral, and permanent, part of the supply chain for some of the country’s largest corporations. How did this come about?
There are many reasons, starting in the 1960s and ’70s with efforts by temp agencies to market permanent workers as an illogical burden for companies. The move to just-in-time manufacturing further drove just-in-time labor as warehouses and assembly plants no longer had steady orders. And with each passing recession, more and more companies have turned to temp agencies to ride out what has become unending uncertainty and to avoid workers compensation and unemployment insurance costs/headaches to gain an advantage over their competitors.
- A senior official at the Department of Labor told you that more and more employers are seeking to change or obscure the employer/employee relationship. What did she mean by that, and what implications does that change have for our economy?
She meant the growth in temp work, subcontracting and employee misclassification. The implication for the economy is a growing sector of the workforce with low pay and no health insurance or retirement savings. In reality, the taxpayers pick up the costs in the form of food stamps, Medicaid and emergency-room care and Social Security later in life.
- You found that even before the word “outsourcing” became core vocabulary in the business press, the temporary labor industry was hard at work convincing managers that their workforce was a burden rather than an asset, how did they go about this?
I researched in Lexis-Nexis and the Oxford English Dictionary looking for the earliest references to the word “outsourcing” and similar terms. The first reference I could find was in 1979 in the Journal of the Royal Society of Arts. “Outsourcing” didn’t appear in the New York Times or Business Week until 1981. But decades before this, big temp firms were running ads in management magazines promoting the negatives of full-time employees even in good times. And they were positioning their own managers as cost-cutting and HR experts. Sociologist Erin Hatton found a lot of these ads for her book, The Temp Economy.
- You found that temporary workers are more likely to be injured on the job and less likely to receive unemployment benefits. Are temp agencies exempt from paying into workers’ compensation programs?
In a temp arrangements, the agencies—not the host companies—provide workers’ compensation coverage. Studies over the years have shown the daily pressure that workers’ comp costs have on employers to improve safety at the worksite. Shifting the responsibility to the temp agency, which does not control or often see the worksite, divorces the host company from that market pressure to improve safety.
With regard to unemployment benefits, temp firms have successfully lobbied to change laws or regulatory interpretations in 31 states, so that workers who lose their assignments and are out of work cannot get unemployment benefits unless they check back in with the temp firm for another assignment.
- Temp agencies are supposed to verify that their workers are eligible to work in the United States. You found that many temps are undocumented and therefore vulnerable to exploitation because they are less likely to complain about exploitative working conditions. How do temp agencies get away with ignoring the immigration status of their workforce?
Agencies like all employers are indeed supposed to verify that their workers are eligible to work in the US. But walk into many low-wage employers and you’ll find undocumented immigrants. Large companies have more rigorous verification processes or use E-Verify and so can say they don’t hire undocumented workers. But many use contractors and temp agencies that simply ask for the required forms and don’t really look at the IDs. When problems are discovered, the brand-name company can simply claim it didn’t know and move to the next low-rate temp agency. I’ve heard stories and seen evidence of workers who were paid under different names they never gave the agency.