Wednesday, July 9, 2014

Proof: Slow Job Growth a result of new Business Model adopted after the Bush Great Recession.

Republicans are wrong about the “sluggish” jobs recovery under Obama.

While they “blame Obama” for the slow job and economic growth nationally, Republicans governors facing the same problem in their states are asking voters to be patient and celebrate any forward movement.

But the Great Recession is really to blame for the change in hiring. Look, I’m not an economist, but I have been watching how businesses have shifted their employment model in the wake of the recession.

The Milwaukee Biz Journal finally explained why employment has slowed, and part time workers are brought in during peak selling seasons to save money on labor and benefits.

The problem is reflected by temporary staffing increases. It’s a troubling development:
Temporary agencies service employment is at an all-time high for the eighth consecutive month, said Mark Marcon, senior research analyst with Robert W. Baird & Co. Inc. The staffing industry in the U.S. has grown from $55 billion in 1995 to $120 billion in 2013.

In June, temporary help services added 10,100 jobs in June in the U.S., an 8.1 percent increase year over year, according to Baird. “Having a job through a temporary agency was viewed as a sub-optimal type of work, but broadly speaking… it’s increasing in recognition as a social good rather than social negative and it’s a good way to get people from a state of unemployment to employment,” Marcon said.
No, the growth in “sub-optimal type of work” doesn’t suddenly make it into something “good.”

Here’s how the business model changed after the Great Recession, a point no one brings up nationally when they’re talking about slowing jobs and business growth. And while some partially blame the Affordable Care Act, health care benefits alone have always been a problem for business:
Companies prefer hiring through temporary agencies because it gives them more flexibility, and helps them deal with “uncertain times and uncertain regulations,” Marcon said. “Part of the drive behind this increased usage is that companies are facing more regulatory burdens, like the Affordable Care Act … By hiring through temporary agencies, they are offloading that responsibility and putting it onto the temp agency.”
But temp agencies don’t provide health benefits. This might be a little unsettling:
There is a temporary staffing agency service from doctors and lawyers to assembly workers.
Here are a few companies leading the way with their stripped down labor force. I only noticed this trend because many of these companies were from Wisconsin:
Amazon uses temporary workers to fill its seasonal surge at Christmas time. Milwaukee-based Harley-Davidson Inc. uses a flexible workforce in its plants to get motorcycles made faster and just in time to the consumer. Quad/Graphics Inc. in Sussex uses temporary workers to fill their production level jobs. Marcon said, “Most companies are trying to become as lean as possible, so they are bringing in workers on as they need them.”
Skilled labor Shortage? Nope, Temp Labor Model:
Case in point, several former Harley-Davidson Inc. employees have filed a discrimination lawsuit in federal court against Infosys, a staffing firm Harley contracted with … Employees allege that the firm discriminated against American workers by replacing them with temporary workers from South Asia, who had H-1B visas. Infosys, which is based out of India, has disputed the claims saying that the company faced a talent shortage in the U.S..
But that’s a big decades old industry created lie.

Check out this old but shocking CNN report from around 2005 that proved, even then, the skilled labor shortage was a scam. Note: job shortages increase wages, yet wages haven't increased:

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