Low-Income and Low-Skilled Workers Involvement in Nonstandard Employment. The Relationship Between Temporary Help and the Low-Wage Sector

10/01/2001

Given the relatively poor employment and wage outcomes described above, it is natural to question the extent of the linkage between employment in the temporary help services sector and employment in the low-wage sector. In order to address this, we identify those industries that have the most low-wage workers in each of the three years for which we have data and report the results in Table 3.15 and in more detail in Table 3.16.

Table 3.15
Major Industries of Low-Wage Workers*

Industry

% of Low-Wage Workers in 1995 % of Low-Wage Workers in 1997 % of Low-Wage Workers in 1999
Agriculture 6.0% 4.4% 4.8%
Mining 0.3 0.1 0.1
Construction 3.6 3.9 4.1
Manufacturing - Durable Goods 4.2 5.4 3.8
Mfg. - Non-Durable Goods 5.2 5.1 4.4
Transportation 2.0 3.0 2.3
Communications 0.5 0.4 0.5
Utilities And Sanitary Services 0.2 0.3 0.4
Wholesale Trade 2.9 2.7 3.1
Retail Trade 29.4 29.9 31.3
Finance, Insurance, And Real Estate 3.3 3.6 3.2
Private Households 2.6 1.8 1.9
Business, Auto And Repair Services 8.1 8.8 7.4
Personal Services, Exc. Private Hhlds 5.1 4.3 5.4
Entertainment And Recreation Services 2.5 2.9 2.4
Hospitals 1.5 1.8 1.3
Medical Services, Exc. Hospitals 4.1 5.0 4.3
Educational Services 8.0 7.3 8.7
Social Services 5.3 5.3 5.3
Other Professional Services 3.3 2.4 3.2
Forestry And Fisheries 0.1 0.1 0.1
Public Administration 1.5 1.5 1.9
Armed Forces 0.0 0.0 0.0

Source: Current Population Survey matched February to March.
* Low-wage workers are classified as those that work for less than $7.50 per hour, in 1998 dollars.

Table 3.16
Detailed Industries of Low-Wage Workers* in the Retail Trade Industry
(Top 5 Industries in which Low-Wage Retail Trade Workers are Employed)
Year Detailed Industry Census Code % of Low-Wage Retail Trade Workers
1995 Eating and Drinking Places 641 38.7%
Grocery Stores 601 12.8
Department Stores 591 10.0
Stores, Apparel and Accessories, not Shoes 623 4.1
Direct Selling Establishments 671 3.1
1997 Eating and Drinking Places 641 40.1%
Grocery Stores 601 15.5
Department Stores 591 8.8
Stores, Miscellaneous Retail 682 3.6
Stores, Apparel and Accessories, not Shoes 623 2.8
1999 Eating and Drinking Places 641 40.9%
Grocery Stores 601 12.1
Department Stores 591 9.4
Stores, Apparel and Accessories, not Shoes 623 5.6
Stores, Miscellaneous Retail 682 3.9

Source: Current Population Survey matched February to March.
* Low-wage workers are classified as those that work for less than $7.50 per hour, in 1998 dollars.

The overlap between industries with the majority of low-wage workers and the industries with the majority of temporary help workers is marked, but not overwhelmingly so.(53) As mentioned above, the biggest sector to employ temporary help workers was business, auto and repair services, accounting for half of all temporary help employment. These industries are clearly also an important employer of low-wage workers: roughly eight percent of all low-wage workers worked there in each year for which we have data, but it is not nearly the same order of magnitude as for temporary work. In a similar vein, employment in durable goods manufacturing accounted for the jobs of more than one in ten temporary help workers, but only one in twenty low-wage workers; the retail trade sector accounted for one in four low-wage jobs, but under two percent of temporary help service workers. Again, there is no evidence of any particular trends over time.

We then investigate the evidence with respect to occupational classifications, and find essentially the same picture (See Table 3.17). In particular, while temporary help occupations are primarily administrative support, machine operators, and handlers (in order of importance), low-wage occupations are primarily service occupations, sales occupations, and administrative support occupations. Even when we examine the detailed occupational categories of low-wage workers (Table 3.18), we find no overlap. In none of these is there any particular trend over time.

Table 3.17
Major Occupations of Low-Wage Workers*
Occupation % of Low-Wage Workers in 1995 % of Low-Wage Workers in 1997 % of Low-Wage Workers in 1999
Executive, Admin, & Managerial Occs 5.7% 5.9% 6.0%
Professional Specialty Occs (e.g., teachers, lawyers, engineers, architects, etc.) 7.4 6.1 6.9
Technicians And Related Support Occs 1.0 1.2 1.4
Sales Occs 17.0 16.0 16.2
Admin. Support Occs, Incl. Clerical 12.4 13.9 13.2
Private Household Occs 2.4 1.7 1.7
Protective Service Occs 1.7 1.9 1.7
Service Occs, Exc. Protective & Hhld 24.2 25.4 27.0
Precision Prod., Craft & Repair Occs 5.8 5.0 5.3
Machine Opers, Assemblers & Inspectors 7.1 7.8 6.3
Transportation And Material Moving Occs 2.9 3.5 3.5
Handlers,equip Cleaners,helpers,laborrs 6.2 7.0 5.8
Farming, Forestry And Fishing Occs 6.4 4.5 4.9
Armed Forces 0.0 0.0 0.0

Source: Current Population Survey matched February to March.
* Low-wage workers are classified as those that work for less than $7.50 per hour, in 1998 dollars.

Table 3.18
Detailed Occupations of Low-Wage Workers* in Service Occupations
(Top 5 Occupations in which Low-Wage Workers in Service Occupations are Employed)
Year Detailed Occupation Census Code % of low-wage service workers
1995 Cooks 436 14.8%
Waiters and Waitresses 435 11.8
Janitors and Cleaners 453 11.2
Nursing Aides, Orderlies, and Attendants 447 9.5
Family Child Care Providers 466 9.5
1997 Cooks 436 14.0%
Nursing Aides, Orderlies, and Attendants 447 11.4
Waiters and Waitresses 435 11.0
Janitors and Cleaners 453 10.6
Family Child Care Providers 466 9.2
1999 Waiters and Waitresses 435 13.4%
Janitors and Cleaners 453 12.1
Cooks 436 11.5
Nursing Aides, Orderlies, and Attendants 447 9.8
Family Child Care Providers 466 7.5

Source: Current Population Survey matched February to March.
* Low-wage workers are classified as those that work for less than $7.50 per hour, in 1998 dollars.

The same picture holds when we examine the industries of low-wage workers in more detail, and compare this to the industries associated with temporary help services, as seen in Table 3.19. There is no overlap in detailed industry employment: the dominant low-wage employers are firms in eating and drinking places, while the dominant temporary help employer is personnel supply services. Similarly, while educational establishments are very important low-wage employers, they do not figure at all in the temporary help market.

Table 3.19
Detailed Industries of Low-Wage Workers**
(Top 5 Industries in which Low-Wage Workers are Employed)
Year Detailed Industry Census Code % of Low-Wage Workers 1998-2008 % Change in Total Employment
1995 Eating and Drinking Places 641 11.4% 17.0%
Elementary and Secondary Schools 842 4.2 15.3*
Grocery Stores 601 3.8 5.7
Construction 60 3.6 6.7
Colleges and Universities 850 3.4 15.3*
1997 Eating and Drinking Places 641 12.0% 17.0%
Grocery Stores 601 4.6 5.7
Construction 60 3.9 6.7
Colleges and Universities 850 3.5 15.3*
Elementary and Secondary Schools 842 3.5 15.3*
1999 Eating and Drinking Places 641 12.2% 17.0%
Elementary and Secondary Schools 842 4.8 15.3*
Grocery Stores 601 4.1 5.7
Construction 60 4.1 6.7
Colleges and Universities 850 3.5 15.3*

Source: CPS February matched to March. Employment growth figures are from the Bureau of Labor Statistics.
* The projections for "Elementary and Secondary Schools" and "Colleges and Universities" represent total employment growth for all occupations within the Industry: Education, Public, and Private.
** Low-wage workers are classified as those that work for less than $7.50 per hour, in 1998 dollars.

It is interesting to note that those industries that are the most important employers of low-wage workers are extraordinarily stable over the five years for which we have data: the same five industries show up in each year, albeit in slightly different ordering (See Table 3.19). This is in contrast to the dominant occupations of temporary help workers, where there appears to be a little more volatility, although this may be a function of sample size (See Table 3.20).

Table 3.20
Detailed Occupations of Low-Wage Workers*
(Top 5 Occupations in which Low-Wage Workers are Employed)
Year Detailed Occupation Census Code % of Low-Wage Workers 1998-2008 % Change in Total Employment
1995 Cashiers 276 5.5% 17.4%
Cooks 436 3.6 19.2
Waiters and Waitresses 435 2.9 15.0
Farmers, except horticultural 473 2.7 -13.2
Janitors and Cleaners 453 2.7 11.5
1997 Cashiers 276 5.7% 17.4%
Cooks 436 3.5 19.2
Supervisors and Proprietors, Sales Occupations 243 3.4 not available
Nursing Aides, Orderlies, and Attendants 447 2.9 23.8
Waiters and Waitresses 435 2.8 15.0
1999 Cashiers 276 5.3% 17.4%
Waiters and Waitresses 435 3.8 15.0
Cooks 436 3.7 19.2
Supervisors and Proprietors, Sales Occupations 243 3.3 not available
Janitors and Cleaners 453 3.1 11.5
Source:  Current Population Survey matched February to March. Employment growth figures are from the Bureau of Labor Statistics.
*  Low-wage workers are classified as those that work for less than $7.50 per hour, in 1998 dollars.

While this describes the current situation, the Bureau of Labor Statistics (BLS)(54) provides some insight into what growth to expect in these low-wage industries. While employment growth for the whole economy between 1998 and 2008 is projected to be about 14 percent, employment in eating and drinking establishments (17 percent growth), and the education sector (15 percent growth) is expected to exceed this rate, while employment in grocery stores and construction work is expected to fall far short (at between 5 and 7 percent growth). When we compare this to the growth in the industries that employ temporary help workers, there are some substantial differences. BLS expects employment growth in the temporary help industry to be 43 percent, in health services to be 65 percent, in telephone communications to be 24 percent, but in hospitals, an important temporary help employer, to be a scant 8 percent. In sum, the employment growth prospects for both low-wage and temporary workers depend very much on the industry in which they work. Since jobs in these industries are neither geographically concentrated (as were jobs in the steel and auto industries 20 years ago) nor difficult to switch into (again, unlike heavily unionized or high-skill jobs), an important policy direction might be to encourage job mobility in response to industry demand changes.

As Table 3.20 shows, the same picture is also evident in an examination of the occupations of low-wage workers, which are overwhelmingly very low-skill occupations--cashiers, cooks, janitors, waiters and waitresses. In general, employment growth in these low-wage occupations is projected to exceed employment growth in the economy at large--particularly in the only occupation which does overlap with temporary work--that of nursing aides, orderlies and attendants. Again, for policy purposes it is useful to note that these occupations are not geographically restrictive, nor are there high barriers to entry. As the demand for one occupation shrinks, workers should be able to move to a newly expanding occupation, if adequate information about job opportunities is made available.