May 01, 2013

DCR National Temp Wage Index - May 2013

DCR National Temp Wage Index

Over the first quarter of 2013 the temporary workforce population continued to increase at a rate of approximately 18.4k per month. On a year over year basis (from Q1 of 2012 to Q1 of 2013), the national temp workforce has increased by 158.8k. This shows a clear upward trend with a consistent demand for temporary workers. As per our wage prediction, the DCR National Temp Wage Index, temp wages will continue to rise throughout the current quarter as well.

The Conceivable Impact of New Immigration Regulations

Pending new immigration regulations would help to alleviate gaps in current law by giving employers a method to bring in foreign workers for year-round jobs. The new W-visa program would admit 20,000 low-skilled foreign workers into the country starting in 2015 and could gradually reach a cap of 200,000 in five years. Depending on unemployment rates, job openings, employer demand and other data, the numbers of visas could fluctuate. The current H-1B visa program for low-wage workers is capped at 66,000 per year and only applies to temporary or seasonal jobs. The instillation of this program would increase the flexibility for employers to bring workers on board as and when required, and also keep the employment interests of U.S. workers intact.

Experts anticipate that most of the foreign workers taking advantage of this new program will come from the nearby countries of Mexico, Jamaica and Guatemala. Predictions are that the construction industry, which is more seasonal in nature, has a higher chance of employing such workers. The majority of the opportunities created through the proposed W-visa program would be in areas such as long-term care, the hotel and restaurant industry and other low-wage service sectors. Temporary foreign workers are expected to obtain a higher preference over local workers due the versatile nature of their acceptance of job duties and wages.

A Nation of Temporary Workers

Recently, spurred by Yahoo, the debate over telecommuting has unearthed an interesting issue, related not to workplace flexibility but to the essential nature of work itself. Permanent freelancing and temporary work is a rapidly growing sector of the American workforce. In 2006 there were 42.6 million independent and contingent workers, accounting for 30% of the entire American workforce. Over the last three years (2009 to 2012), the number of temporary employees rose by 29% and a survey of 200 large companies found that, on average, temp workers accounted for 22% of each company’s workforce (historically comprised almost 100% of permanent employees).

Small Businesses’ Substantial Contributions

In March 2013, companies with 49 or fewer employees added 74,000 jobs (seasonally adjusted), accounting for 47% of employment gains across all payroll size groups. Of this, the majority (44,000 jobs) was added by service providing businesses with 1-19 employees. It is predicted that over the next decade small business numbers will increase with the greatest growth in personal and micro-businesses, and that such small businesses will be smaller in workforce size to meet agility requirements, increasing the use of contingent workers. 

Changes in Small Business Employment by Sector

DCR National Temp Wage Index may 2013

Source: ADP, Inc: Moody’s Analytics

“The number of contingent employees will increase worldwide. In the U.S. alone, contingent workers will exceed 40 percent of the workforce by 2020. Traditional full-time, full-benefit jobs will be harder to find.” ~Intuit 2020 Report