Economists Debate Impact Of Temporary Hiring

Detroit job seekers attend an employment fair. i i

Sharon Phillips, William Wright and Tim Paliwoda fill out applications while attending a job fair in Detroit. Some economists predict that private employers will be slow to hire more full-time workers because productivity increased a lot in the past year. Paul Sancya/AP hide caption

itoggle caption Paul Sancya/AP
Detroit job seekers attend an employment fair.

Sharon Phillips, William Wright and Tim Paliwoda fill out applications while attending a job fair in Detroit. Some economists predict that private employers will be slow to hire more full-time workers because productivity increased a lot in the past year.

Paul Sancya/AP

The U.S. economy has been growing for eight months and people everywhere are wondering when employers will start hiring again.

Some economists are betting that March is the month that things turn around. Temporary hiring is one cause for this optimism. It's up, and has been on a steady climb since September. An increase in temporary hiring is usually a sign that businesses are gearing up to hire full-time workers.

John Hazelwood recently landed a temporary job and he says he's deeply grateful. He's been searching for full-time work for a year and a half, after giving up a well-paid technology job in San Diego to move to Austin to be with his wife. But just after the move, companies stopped hiring.

"I went back to waiting tables after being off of that for a decade," Hazelwood says. "I sat on the couch a lot; I sent out resume after resume after resume after resume and didn't hear anything back from anyone."

A Temporary Job Search

The same pattern continued for a year. Then, he started bidding for jobs on Elance, an online site for freelance workers.

In January, he landed a three-month video editing assignment and is now pretty confident he'll be able to parlay his part-time work into a full-time gig.

"I feel like I have more options than I did five months ago, when I felt like I had no options and the TV was my best friend," Hazelwood says.

There are thousands, if not millions, of people like Hazelwood hoping to use a temporary job as a stepping stone to something more stable. But economists right now are divided over whether the bump in temporary hiring means a surge in full-time employment is around the corner.

An Economic Debate

"Everybody is so negative today," says Brian Wesbury, chief economist with First Trust Portfolios, a financial services firm based in Wheaton, Ill. "I call it the economic Stockholm syndrome. It's like we've gotten so used to bad news that we can't imagine that there's going to be good news."

Wesbury says the good news is that consumers are starting to spend money on things like cars and retail. And he expects the economy to add 200,000 to 300,000 jobs next month.

"If consumption continues to grow, you need more employees," Wesbury says. "And I think that's where we are. Consumption is growing and therefore we're going to need more employees in the months ahead."

But other economists have dissenting opinions.

"The general forecast is for a lot of pain in the future," says Lawrence Mishel, president of the Economic Policy Institute, a think tank in Washington, D.C.

He says he believes private employers will be slower to hire. One reason is productivity increased a lot in the last year, which is good because businesses became more efficient.

"But when business can produce 5 percent more things with the same workers, it means growth has to exceed that amount in order for us to add jobs," Mishel says.

And for Mishel there's another important measure: the number of hours people are working on average in a week. That number, he says, is down since the beginning of the recession.

"So, it's not clear that these projections take into account the fact that the first response of employers will be to increase hours of work rather than add jobs," he says.

Easy Access To Freelance Workers

It's also easier than ever to look for freelance workers. Companies such as Elance and Guru.com match freelance talent with prospective employers online. Elance Chief Executive Officer Fabio Rosati says the recession was a bonanza for his business. He says businesses love the flexibility of temporary work.

"It's a fundamental shift in how people think about work," Rosati says.

Even if businesses do begin hiring soon, there will be some hangover effect for workers.

Protracted unemployment generally makes people reset their expectations about work. They expect less pay, maybe lower job quality. They might even take jobs that aren't a good match with their skills because they want a regular paycheck.

Hazelwood, the freelancer, says his protracted unemployment reset his sense of self.

"It humbled me and made me put priorities back to where they should be," Hazelwood says.

He's focused less on salary and more on appreciating what it means to have a steady job, benefits and a career he enjoys.

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