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Meredith Miller

miller.meredith@bls.gov

Meredith Miller is an economist in the Office of 

Employment and Unemployment Statistics, U.S. 

Bureau of Labor Statistics.

Temp workers, permanent effects: how temps 

changed the nature of the U.S. workforce

The Temp Economy: From Kelly Girls to Permatemps in 

Postwar America. By Erin Hatton. Philadelphia: Temple 

University Press, 2011, 232 pp., $29.95 paperback.

Take a second to think about who works in your office. Do 

you have at least one temporary worker, or temp, in your 

office? Are you yourself a temp, or have you temped in the 

past? If the answer to any of these questions is yes, you’re 

not alone: temps exist in nearly every American workplace. 

Erin Hatton, an assistant professor in the Sociology 

Department at the State University of New York (SUNY) at 

Buffalo, provides a short, but info-packed, history of the rise 

of the temp industry in postwar America and how it 

fundamentally changed the way corporate America valued 

and treated their employees. Hatton shows that, although 

the temp industry has been remarkably successful in the 

space of 60 years, its widespread success has contributed 

to a decline in Americans’ worklives. This thesis applies not 

only to temp workers themselves, but to the American 

workforce as a whole. Hatton breaks up the book into four 

chapters, each profiling a different decade from the 1960s 

to the early 2000s.

Hatton begins in chapter 1 by arguing that temp jobs today 

are stereotypically “bad” jobs, with lower wages, no benefits 

(such as health insurance), and no job security. In many 

cases, they are full-time “permatemp,” or “permanent 

temporary,” jobs. However, she explains that, at least in the 

early days of the temp industry, these jobs were marketed 

as glamorous moneymaking opportunities for a subset of 

the population who might not have otherwise entered the 

workforce. The growth of the temp industry started in 

earnest following World War II. Created to fill a genuine 

need for businesses that required help when their permanent employees were sick, on vacation, or otherwise not 

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able to work for short periods, temp workers were generally viewed at that time as a threat to the existing 

workplace. Government officials, labor unions, and the public in general saw private employers as underhanded 

and abusive to their workers. Labor unions, in particular, fought viciously to protect workers’ rights, often 

threatening strikes. To counteract this negative portrayal, companies such as Manpower and Kelly Services 

created the “Kelly Girl” image: a White, young, middle-class woman who took a few hours out of her duties as a 

housewife to do temporary office work for “pin money” (per Merriam-Webster, “money that is used for small 

expenses”). By using Kelly Girls to justify “respectable,” but marginal, work, the temp industry largely soothed 

opposition from labor unions and skeptics of the private sector. However, by promoting temp work as largely 

“feminine” work, the industry reinforced gender, race, and class stereotypes of women being housewives first and 

working women second; even as the temp industry expanded into blue-collar sectors, its advertisements 

deliberately did not use men or non-White workers.

In chapter 2, Hatton asserts that, while the temp industry in the 1950s and 1960s was defined largely by “Kelly 

Girl” services, in the 1970s the industry began to aggressively market a new way of looking at employees. The 

effort involved pushing American companies away from an asset model of work, in which workers were seen as a 

key element of profits and therefore needed to be treated well, to a liability model of work, in which any labor costs 

were viewed as taking away from the bottom line. As a result of this shift in view, a company could be seen to save 

money in wages, benefits, and training costs by replacing permanent employees with temps. The expansion of 

temp workers in the 1970s and 1980s coincided with a movement in corporate America that economists Bennett 

Harrison and Barry Bluestone coined “the Great U-Turn”: companies had to become “lean and mean” to survive 

globalization abroad, as well as deindustrialization and economic recessions at home. High-paying, “good” servicesector jobs slowly started to be replaced by “McJobs”: unskilled, low-wage nonunion jobs. Temp jobs fit that bill: 

only the product of labor had value, while workers themselves were expendable. Hatton points out that, not only 

did the temp industry push the cultural shift toward the liability model of work, but also, in selling its vision of the 

liability model of work, the industry pushed the idea of using temps in every industry imaginable, not just for 

administrative jobs.

By the 1980s (chapter 3), the temp industry had permeated corporate America, promoting the profit-boosting 

powers of the liability model of work. The industry achieved this outcome in four main ways: “downstaffing,” which 

called for a small core staff of permanent employees who added or subtracted temps as needed; “permanent 

temporaries,” or “permatemps,” replacing permanent employees with temps hired on a regular, long-term basis; 

the transfer of payroll, or “payrolling,” according to which permanent employees were turned into temps so that 

their salary would be paid by the temp agency, not by the company they worked for; and “outsourcing,” which 

replaced whole departments, such as accounting, with a staff of temps, who were managed by the temp agency, 

thereby relieving the company owner of management responsibilities. In the midst of corporate layoffs, foreign 

competition, and deindustrialization, many corporations replaced their permanent employees with temps as the 

temps’ lower labor costs prevailed over the permanent employees’ skills, loyalty, and ability.

Once the temp industry had permeated the private sector (and, by 1985, the federal government), various temp 

agencies shifted their priorities to increasing their market share. They marketed a dichotomous idea: temping was 

a legitimate career, providing family-sustaining employment while at the same time emancipating the worker from 

the typical 9-to-5 workday—“freelancing” became a trendy career path to take. Temp agencies also touted the 

“ring-and-core” approach to corporate restructuring. This concept relied on a small core of permanent employees 

surrounded by a wide ring of contingent workers—a ring that could be adjusted to the business cycle. By arguing 
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that this approach would both boost profits and protect permanent employees from the corporate layoffs that were 

widespread in the 1981–82 recession, the temp industry used asset model rhetoric to institutionalize the liability 

model of work. Their “support” for the “protection” of permanent workers was an effort to capitalize on employers’ 

fear of a public backlash against corporate layoffs. In the eighties, the temp industry also gained a victory against 

labor unions. Previously, most temp agencies, under their own code of ethics, did not allow temps to be supplied to 

break strikes (or to be brought on to minimize work disruptions when permanent workers were on strike). However, 

following complaints from the industry in the mid-eighties, companies began to see it as acceptable to replace 

striking workers with temps, and to lock out permanent employees, as long as bargaining continued. This tactic 

ultimately undermined the negotiating power of labor unions.

But the largely unchallenged success of the temp industry could not last forever. Hatton notes in Chapter 4 that 

corporate America’s adoration of the temp industry began to wane in the 1990s. Some of it was a result of the 

industry’s own actions; for example, as the idea of outsourcing jobs abroad grew in popularity, the argument that 

temps saved American jobs that would otherwise be outsourced inadvertently legitimized the idea of outsourcing 

by having established the cultural framework that workers were expendable and interchangeable. Also, temp 

workers themselves began to push back: in one court case, Vizcaino v. Microsoft, the Supreme Court ruled that 

Microsoft had to provide benefits to “permatemps” whom the company had classified as “independent contractors” 

or “freelancers” in order to avoid paying benefits, even though many of them had worked for Microsoft for years 

and were doing the same work as permanent Microsoft employees. This legal decision sent the message out to 

companies that they could no longer treat temps as second-class employees.

Other measures aimed at decreasing the power of the temp industry in the nineties were less successful. Temps 

tried to organize, either by forming their own labor union or joining existing labor unions. This measure faced two 

major setbacks: first, temps are usually not tied to one company or career field, so the attempt to organize their 

own ranks proved challenging; second, labor unions were hesitant to welcome temps into their ranks when temps 

had been used against them to break strikes. Activists also attempted to get companies to convert their 

“permatemps” into permanent employees. The largely unsuccessful result was that, although a few temps did get 

full-time permanent jobs, most temps saw no change in their employment status. The reason was that companies 

had no incentive to provide permanent jobs to the temps who were already doing the same work as permanent 

employees for less cost.

While not being overly critical, Hatton argues against the notion that the temp industry’s success was a positive 

development for corporate America. Although the industry promoted flexibility for corporate America and for temps 

themselves, the positive aspects of the temp industry have become entangled with the exploitation of workers and 

the idea that permanent workers are expendable. Hatton concludes the book by offering four policy proposals to 

update the asset model of work and to return to treating employees as valuable assets—as important to a 

company as the bottom line is.

This book is a good introduction not only to the history of America’s temp industry and the successful tactics the 

industry used to become a sizable sector of American employment, but also to how the industry fundamentally 

changed America’s corporate culture to the point where having temps in one’s office, from the private sector to the 

government, is commonplace. Hatton does a nice job of explaining the connections between how society’s 

attitudes toward work changed and how the temp industry either adapted to those attitudes or had a large role in 

changing ideas about work—in particular, to what extent employers value their workers. While Hatton believes that 
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the temp industry shoulders some blame in changing American corporate culture from an asset model to a liability 

model of work, she also believes that the industry is not irredeemable; in fact, she makes the case that the temp 

industry should have a key role in leading the charge back toward a revised asset model of work in which both 

temps and permanent employees are valued and compensated equally.