Temporary Employment Agencies, Privatization, and the Labor Movement


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Temporary employment agencies are often touted as a quick and easy way for low income and “unskilled” workers to find a job. This claim has some justification, as the hiring process for these temporary agencies generally only consists of filling out a few forms and providing a Social Security card. Prospective employees do not have to endure a selective hiring process and can often be assigned work the same day they apply. On the surface, this arrangement seems to be an excellent tool to fight unemployment and improve working people’s living conditions. Unfortunately, experience with temporary agencies reveals a much more negative side, one that far outweighs any potential benefits.

These agencies essentially function as a way for businesses to outsource their labor cheaply. For example, if an auto factory is looking to hire new employees, recruiting through a temp agency is much more cost effective. If the factory management chose to hire workers directly, they would be obliged, by a trade union or the law, to pay them a higher wage and provide them with certain benefits. Hiring through a temp agency, however, allows management to substantially cut overhead at the workers’ expense.

By using temp workers instead of permanent, directly hired employees, businesses can pay less for labor and terminate employment at any time. Such actions are possible because the temp workers are not employed by the site they work at; they work for the temp agency. This is analogous to an individual using a contractor to build a home. The construction workers are not the homeowner’s employees. The client pays a fee to the contractor to use their employees’ labor. Similarly, a temp agency receives a fee from the client business, in addition to garnishing some of the temp worker’s wages. Consequently, workers can be out of a job or suddenly shifted to another job site at the client company’s whim.

In addition to rocky job security, temporary workers receive considerably less pay than their colleagues in permanent positions. According to the Bureau of Labor Statistics, as of 2003, “Temporary agency workers earned on average around 24 percent less than permanent employees holding a comparable position.” This kind of disparity is made possible by nonsensical laws that place many temp workers in the same category as small business owners. As such, a number of basic worker’s rights are negated. Due to the temp worker’s status as “self-employed”, they can both be paid less and be subjected to legal action if they make a mistake on the job. Additionally, this working arrangement makes it nearly impossible to form unions, as temp workers are scattered in different industries and employed by different agencies.

There is an interesting correlation between the emergence of temporary employment agencies and the decline of unionized labor in this country. The weakness of organized American labor has allowed temp agencies to grow without resistance, further destroying once well-paid industrial and service jobs. In many sectors, these quality jobs are being cleverly phased through the use of temp agency outsourcing. Janitors at the local Middle Tennessee State University are slowly becoming outsourced temp workers. As state employees, these janitors receive decent benefits and surprisingly livable wages. However, as older cleaning staff retire, they are replaced with temp workers, who receive substantially lower pay and virtually no benefits. This is essentially a microcosm of the general trend in the American workforce; privatization and more intensive exploitation. At a Nissan factory in Smyrna, Tennessee, a temp worker even discovered that the agency he worked for was owned by the factory manager! 

Several members of the Middle Tennessee branch of WIL have experienced temporary agencies as well. One of our members, still currently employed by the agency Randstad, has been having to take pay under the table because of the “no-holiday-pay” policy Randstad holds. She has also had to make extra trips to her temp agency office to complain of over-time payments not being made. As an employee who worked anywhere from 55 to 60 hours a week, she was only being paid for the 40 hours that she was hired to work. Because her pay was withheld many weeks, she found it hard to make ends meet when trying to pay for a college education and her living needs.

Instances such as these are precisely why WIL’s program calls for the abolition of temporary employment agencies. In their place, we make the simple demand that every American be guaranteed the right to a secure, well-paying, unionized job. However, such a demand cannot be met within a capitalist economy. Only when working people democratically control their workplaces will this become a reality.


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