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The Expendables: How the Temps Who Power Corporate Giants Are Getting Crushed

By hiring temporary workers, big companies can shield themselves from complaints about poor working conditions.

| Mon Jul. 1, 2013 6:00 AM EDT

By the time she arrived in Cullman, Rosa recalled, her shoes were so full of holes that her first mission was to go to a strip mall and dig through a clothing donation bin for a new pair.

"I worked in a poultry plant and a restaurant at the same time so I could get enough money to send back to Mexico," she said. Like Rosa, many undocumented immigrants who spoke for this story landed full-time jobs when they first arrived in the 1990s. But many of them lost their jobs when factories closed during the recent recession and have since found only temp work.

Another temp worker, Judith Iturralde, traced the shift back even earlier, to the immigration crackdowns after 9/11. She said that after she returned to work from surgery in 2002, the compact-disc warehouse she worked at told her it could no longer employ her because she didn't have papers. They directed her to a temp firm, she said, and a few years later, she returned to the same warehouse, still undocumented.

After raising enough money, Rosa returned to Mexico and brought her two teenage sons across the desert and back to Alabama, where they worked full-time at a lumberyard. After her son got hurt on the job, they moved to Chicago, hoping for a better life.

But the only work Rosa was able to find was at temp agencies.

It is now 5:03 a.m. at Staffing Network, and the first batch of workers waits outside to board the school bus for Norelco. The agency said it offers complimentary transportation for its employees' benefit. But worker advocates say vans help the temp agencies by ensuring they provide their corporate clients with the right number of workers at the right time.

Many metro areas don't have adequate transportation from the working-class neighborhoods to the former farmland where warehouses have sprouted over the past 15 years. So a system of temp vans has popped up, often contracted by the agencies. Workers in several cities said they feel pressured to get on the vans or lose the job. They usually pay $7 to $8 a day for the round trip.

Workers describe the vans as dangerously overcrowded with as many as 22 people stuffed into a 15-passenger van. In New Jersey, one worker drew a diagram of how his temp agency fit 17 people into a minivan, using wooden benches and baby seats and having three workers crouch in the trunk space.

"They push and push us in until we get like cigarettes in a box," said one Illinois worker. "Sometimes I say, 'Hey, you are not driving goats!'"

Several workers said the temp agency had left them stranded at times. Vicente Ramos, a father of six who lives in New Jersey, recalled how several years ago he and other workers walked for three hours one night after the van failed to show up.

"We were getting hungry and thirsty, and we could barely walk, and our feet were hurting," Ramos said. "They still charged us for the ride."
 

A New Temp Ecosystem

It is now 5:20 a.m., and a second batch of workers has been called for Norelco. Dispatchers are starting to tap workers for Start Sampling, which provides free samples of items like shampoos, coffee and cat food on behalf of retailers and consumer product companies.

The dispatchers have called several other workers named Rosa. Each time, her ears perk up, but it is always another last name. She goes to the counter and asks the dispatchers if they think there will be work today. They tell her there's not much but to wait a little longer in case a company calls to say they need more bodies.

Two months before, in November, Rosa walked into the temp agency with something to say. She had been attending meetings of the Chicago Workers' Collaborative, a nonprofit that advocates for temp workers and is funded by various religious and anti-poverty foundations. Though Rosa became increasingly active, her only source of income is temp jobs.

"My name is Rosa Ramirez," she said, flanked by leaders of the workers collaborative, who recorded the speech on a cellphone. "We wanted to read some points that we want to change here in this office."

"Stop forcing workers to wait without pay before the work shift," Rosa said, standing in the center of the room and reading from a paper she had brought.

"Allow workers to go directly to the worksite, because some people have children, and they can't find care that early."

The workers sitting in the bucket chairs looked down nervously, not sure what would happen next.

Rosa read on. "Don't force employees to wait outside of the office until transportation arrives during the winter months."

"We don't want to be loaded into trucks or vans," Rosa said. "Because they carry us like sardines."

Looking back on that day, Rosa said she feels empowered at times but at other times defeated.

"I no longer could stand the abuses," Rosa said. "I see people accepting them, and so I thought by standing up and speaking, I was hoping that people would join me and would agree and would stand up for themselves. But unfortunately, the majority of the people did not."

Staffing Network said in a statement that workers weren't required to come to the branch office. Many workers, it said, get hired by calling about job opportunities and then go directly to their worksites.

"Our track record of being a fair and lawful employer is evidenced by the fact that more than 65 percent of the temporary employees we hire and place have worked with Staffing Network for one year or more," the company wrote. "We provide all employees opportunities to voice any questions or concerns about any aspects of their jobs 2014 without any retaliation."

Unions, on the ropes nationwide, have historically done little for temp workers. The temp industry initially won union backing by promising never to cross picket lines. But in 1985, the Federal Trade Commission ruled that the trade association could not force its members to honor that pledge; so they didn't.

"Unions have had two souls when it comes to temp workers," said Harley Shaiken, a longtime labor economist at the University of California, Berkeley. One is to try to include them, he said, but "the other is circle the wagons, protect the full-time workers that are there."

Will Collette, who led an AFL-CIO campaign against the temp firm Labor Ready in the early 2000s, said it was nearly impossible to organize workers with such a high turnover.

And recent rulings have tied union hands. A 2004 order by the National Labor Relations Board barred temp workers from joining with permanent workers for collective bargaining unless both the temp agency and the host company agree to the arrangement.

Some temp firms have even promoted themselves as experts at maintaining a union-free workplace. In a proposal for the off-road vehicle maker Polaris, the temp agency Westaff, a division of the Select Family of Staffing Companies, said its team was specially trained to spot early warning signs of union activity, such as "groups of workers huddling, then quieting when managers appear."

Meanwhile, a whole ecosystem of contractors and subcontractors benefits from the flexibility of just-in-time labor. For example, Walmart's two largest warehouse complexes are southwest of Chicago and in the Inland Empire east of Los Angeles. Both are managed by Schneider Logistics, which in turn subcontracts to an ever-changing cast of third-party logistics firms and staffing companies.

Such layers of temp agencies have helped Walmart avoid responsibility when regulators have uncovered problems or when workers have tried to sue, accusing the company of wage or safety violations. For example, when California inspected Walmart's Inland Empire warehouse in 2011 and found that workers were being paid piece-rate according to how many shipping containers they unloaded, rather than by the hour, regulators issued more than $1 million in fines against the subcontractors for failing to show how the pay was calculated. Neither Walmart nor Schneider faced penalties.

Asked if the layers of subcontracting allow Walmart to escape blame, spokeswoman Brooke Buchanan said, "Absolutely not."

"We work very hard to abide by the law," she said, "and we expect all the businesses that we do business with and that they do business with to comply with the law."

Schneider treats its associates with "dignity and respect," spokeswoman Janet Bonkowski wrote in an email. "Our suppliers are independent," she said. "When we utilize third-party vendors, we contractually require full compliance with all required laws and that all parties conduct business ethically."

As work is downsourced through a cascade of subcontractors, some workers have been paid wages below the legal minimum or seen their incomes decline over the years.

Berto Gutierrez, who has worked several stints at the Walmart warehouse in Elwood, Illinois, provided ProPublica with a copy of a 2011 paycheck from subcontractor Eclipse Advantage. The check shows he was paid only $57.81 for 12.5 hours of work, or $4.62 an hour. Neither Eclipse, Schneider, nor Walmart provided an explanation for Gutierrez's paycheck.

In 2007, Leticia Rodriguez was hired directly by Simos, the logistics contractor running the online part of Walmart's Elwood warehouse. She said she worked as a supervisor on an annual contract for $49,500 a year, with health insurance. In 2009, when she declined to come in on what she described as a long-awaited day off, she was fired.

Rodriguez returned to the warehouse six months later, this time starting at the bottom, loading trucks for one of Schneider's staffing companies. She said she was paid $15 an hour, but within a year the staffing company lost the contract.

Eclipse Advantage took over, and Rodriguez went to work for that company. There, she said, she got paid piece-rate, averaging about $9.50 an hour. But six months later, Eclipse left, and she and all the other workers lost their jobs. Rodriguez has since interned at the union-backed campaign Warehouse Workers for Justice, earning $12,000.

Eclipse's president, David Simono, declined to comment. Simos didn't return calls. Walmart said it couldn't comment on the specifics of a subcontractor's employee but said it provides all its workers opportunities for growth.


"We've Seen Just Ghastly Situations"

The growing temporary sector does little to sustain workers' standard of living. Temp agencies consistently rank among the worst large industries for the rate of wage and hour violations, according a ProPublica analysis of federal enforcement data. A 2005 Labor Department survey, the most recent available, found that only 4 percent of temps have pensions or retirement plans from their employers. Only 8 percent get health insurance from their employers, compared with 56 percent of permanent workers. What employers don't provide, workers get from the social safety net, i.e., taxpayers.

And don't look for Obamacare to fix it. Under the law, employers must provide health coverage only to employees who average 30 hours a week or more. After pressure from the temp industry and others, the IRS ruled that companies have up to a year to determine if workers qualify.

With the major provisions of health care reform set to take effect in 2014, there's growing evidence that 2013 is becoming a boom year for temping out. TempWorks, which sells software that keeps track of payroll and worker orders, says sales to staffing agencies have been going through the roof and that temp firms tell them the uptick is because of Obamacare.

Unlike the way it monitors nearly every other industry, the government does not keep statistics on injuries among temp workers. But a study of workers compensation data in Washington state found that temp workers in construction and manufacturing were twice as likely to be injured as regular staff doing the same work.

In April, the federal Occupational Safety and Health Administration announced an initiative to get better information on temp-worker safety. "Employers, we think, do not have the same commitment to providing a safe workplace, to providing the proper training, to a worker who they may only be paying for a few weeks." OSHA director David Michaels said in an interview. "I mean, we've seen just ghastly situations."

In December 2011, a Chicago temp worker died after he was scalded by a citric acid solution. The skin cream and shampoo factory he was assigned to failed to call 911 even as his skin was peeling from his body. In August 2012, a Jacksonville temp was crushed to death on his first day of work at a bottling plant when a supervisor told him to clean glass from underneath a machine that stacks goods onto pallets 2014 a job that OSHA said he wasn't trained to do. And in January, a temp was killed at a paper mill outside Charlotte, North Carolina, when he was overcome by toxic fumes while cleaning the inside of a chemical tank.

"There's something going on here that needs direct intervention," Michaels said.


A Temp Worker Bill of Rights

Members of Congress have introduced a handful of bills protecting temp workers in the past two decades. None have made it out of committee. Efforts on the state level have met similar resistance.

But worker advocates and some temp agencies say the Massachusetts Temporary Workers Right-to-Know Law, which took effect in January, provides a model for other states.

That law requires temp agencies to give workers written notice of the basics: whom they will work for, how much they'll be paid, and what safety equipment they'll need. The law limits transportation costs and prohibits fees that would push workers' pay below minimum wage. Agencies must also reimburse the worker if they are sent to a worksite only to find out there is no job for them there.

Similar state bills have passed in New Jersey and Illinois in the past few years. But while the American Staffing Association has a code of ethics containing similar guidelines, it has fought against such laws and blocked them in California and New York. "All laws that apply to every other employee apply to temporary workers," said Stephen Dwyer, the group's general counsel. "We thought that heaping new laws on top of existing laws would not be effective."

Even in states that have them, the laws are honored mostly in the breach. For example, Illinois prohibits temp agencies from charging for transportation. But many have gotten around the law by using so-called raiteros, who act as neighborhood labor brokers for the agencies and charge for transportation. The law also requires an employment notice stating the name of the host company, the hourly wage and any equipment needed. Out of more than 50 Chicago-area workers interviewed for this story, only a handful had ever received one.

Passing through Chicago's working-class suburbs recently, Rosa pointed out the car window to a row of small redbrick homes.

"I've always dreamed of having a little house, a really small, little house," she said.

Asked if she thought she'd ever be able to buy one, Rosa laughed.

"Earning $8.25 an hour?" she said. "I don't think I'll ever be able to do that."

Back at the temp agency, Rosa continues to wait with about 50 other people.

Around 6 a.m., she again inquires if there will be any work. The dispatcher tells her to give it 15 more minutes.

Then he breaks the news: There is no work today.

Get Involved: Is this happening in your community? What should be done about it? Join our discussion by tweeting us your questions and comments with #TempLand, or send us a tip.

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