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Economists Debate Impact Of Temporary Hiring

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Economists Debate Impact Of Temporary Hiring


Economists Debate Impact Of Temporary Hiring

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And, of course, the reason for all those plans being considered is to prevent another financial crash. Most of the Americans that the recession put out of work are still out of work, even though the U.S. economy has been growing for eight months.

Some economists think that's finally about to change. Temporary hiring is up. In fact, it's been climbing since September. And as NPR's Yuki Noguchi reports, that's usually a sign that businesses are gearing up to hire permanent workers.

YUKI NOGUCHI: John Hazelwood recently landed a temporary job and is 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 for his wife. Just after the move, companies stopped hiring.

Mr. JOHN HAZELWOOD: I went back to waiting tables after being off of that for a decade.

(Soundbite of laughter)

Mr. HAZELWOOD: You know, 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.

NOGUCHI: After a year of that, he started bidding for jobs on Elance, an online site for freelance workers. And 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.

Mr. HAZELWOOD: I feel like I have more options than I did even five months ago, when I felt like I had no options and the TV was my best friend.

NOGUCHI: There are thousands, if not millions, of people like Hazelwood hoping to use a temporary gig 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.

Brian Wesbury with First Trust Portfolios is an optimist.

Mr. BRIAN WESBURY (First Trust Portfolios): Everybody is so negative today. 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.

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

Mr. WESBURY: If consumption continues to grow, then you need more employees. And I think that's where we are. I think consumption is growing, and therefore we're going to need more employees in the months ahead.

Mr. LAWRENCE MISHEL (President, Economic Policy Institute): The general forecast is for a lot of pain in the future.

NOGUCHI: That's the dissenting voice of Lawrence Mishel, president of the Economic Policy Institute, a Washington think tank. He says he believes private employers will be slow to hire. One reason is productivity increased a lot in the last year, which is good, because businesses became more efficient.

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

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

Mr. MISHEL: So it's not clear that these projections take into account the fact that the first response of employers is going to be to increase hours of work rather than add jobs.

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

Mr. FABIO ROSATI (Chief Executive Officer, Elance): It's a fundamental shift in how people think about work.

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

Protracted unemployment generally makes people reset their expectations. 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 stint without a job changed his sense of self, and that that was good.

Mr. HAZELWOOD: It humbled me, and it made me put priorities back to where they should be.

NOGUCHI: For Hazelwood, that meant a greater appreciation for what it means to have a steady job and benefits.

Yuki Noguchi, NPR News, Washington.

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