about 30 percent of total compensation costs. And, the tem-
porary wages shown indicate only what temporary workers
earn per hour; clients pay an additional fee to the tempo-
rary help supply firm for providing workers. It is unknown
what the average fee costs clients per hour. What is known
is that, in general, the real wages of temporary help work-
ers have not increased in recent years, and firms are in-
creasingly choosing temporary help workers to fill their
human resource needs.

Table 3. Average wage rates of comparable permanent and
temporary occupations’

Temporary | Permanent
Ovoupation wage | wage
$28.54 $26.89
21.98 18.05
25.40 18,37
14.30 11.35
13.96 19.27
8.30 10.29
10.63 12.52
7A5 8.92
6.78 10.01
659 Cail
9.49 12.70
Typists and word processors 9.85 11.50
Janitors and cleaners ........ 5.67 7.74

‘ Based on data from the 1994 Occupational Compensation
Survey, National Summary and the 1994 Temporary Help Supply
‘Survey.

—Endnotes—

"The temporary help supply industry has experienced marked growth in
‘annual receipts, payroll, and daily employment since 1990. National Asso-
ciation of Temporary and Staffing Services, News Release, March 17, 1995,

dria, Viggini

? Between 1991 and 1994, office and clerical work has declined from
47.6 to 40.2 percent of ii ‘demand; industrial work increased from 27.4
to 34.1 percent; and professional work increased from 2.4 10.4.8 percent. See
National Association of Temporary and Staffing Services,

3 See Occupational Compensation Survey: Temporary Help Supply

Services, United States and Selected Metropolitan Areas, November 1994,
Bulletin 2482, Bureau of Labor Statistics, August 1996.

« See Industry Wage Survey: Temporary Help Supply, September 1987,
Bureau of Labor Statistics, September 1988, Bulletin 2313.

5 The index used was the Consumer Price Index—All Urban Consumers
(CPI-U), U.S. City Average, All Items, 1982-84=100. In September 1987 the
index was 115.0, and in November 1994, it was 149.7

6 See Occ Compensation Survey, National Summary, 1994,
Bulletin 2479, Bureau of Labor Statistics, June 1996.

Compensation and Working Conditions September 1996 50



over time. However, the greatest wage increases were seen
in occupations with relatively few workers. Highly popu-
lated occupations registered fairly unchanging wage rates
or, in some cases, losses over the 1987-94 period.

White-collar workers. Computer occupations fared best.
Nominal wage rates of temporary computer systems ana-
lysts increased from $18.17 per hour to $28.75 per hour;
after taking inflation into account, they netted a greater than
21 percent increase from 1987 to 1994. During the same
period, the real wages of temporary computer programmers
increased over 22 percent, and those of temporary com-
puter equipment operators and printer operators, 4 percent.
While these increases are impressive, these computer-re-
lated occupations have continued to be a small portion of
temporary white-collar workers.

The average wage of temporary registered nurses in-
creased from $14.99 per hour to $21.98 per hour. Taking
inflation into account, this was a real increase of more than
12 percent. Licensed practical nurses’ real wages increased
almost 10 percent from 1987 to 1994. The number of tem-
porary registered and licensed practical nurses was up over
100 percent during this period, but in 1994, they comprised
a combined total of only 2 percent of all temporary white-
collar workers.

Average pay for temporary bookkeepers, accounting
clerks, and auditing clerks lost ground, with almost a 4-
percent decline in real wages. The proportion of workers in
these occupations stayed about the same from 1987 to 1994,
at about 3 percent of all temporary white-collar workers.

The number of temporary cashiers increased more than
470 percent; product promoters, more than 250 percent;
and telemarketing sales workers, over 230 percent during
the 1987-94 period. These marketing occupations are a
small but growing segment of the temporary help industry,
accounting for about 6 percent of all temporary white-col-
lar workers in 1994. Cashiers, product promoters, and
telemarketing sales workers registered moderate wage
changes over the period.

Secretaries, general office clerks, data entry operators,
and typists and word processors were the most numerous of
temporary help workers. Their combined numbers repre-
sent almost half of all temporary white-collar workers. Real
wages of general office clerks increased only about 2 per-
cent, while the real wages of secretaries, typists and word
processors, and data entry operators declined about 5, 4,
and 10 percent, respectively.

Blue-collar workers. The real wages of blue-collar occu-
pations showed mixed results during the 1987-94 period.
Precision production, craft, and repair workers experienced
a 32-percent decline in real wages. Transportation and
material movement workers lost 31 percent in real wages
as well. The wages of machine operators, assemblers, and

49 Compensation and Working Conditions September 1996

inspectors kept pace with rising prices, while the real wages
of handlers, equipment cleaners, helpers, and laborers’
wages remained fairly constant.

Service workers. The wages of temporary service workers
almost kept pace with rising prices. Temporary janitors
and cleaners, who earned close to minimum wage in 1987,
did see a 30-percent increase in nominal wages by 1994,
from $4.36 to $5.67. However, in real terms, they stayed
about even with increases in the CPI. Temporary nursing
aides, orderlies, and attendants’ real wages decreased about
2 percent from 1987 to 1994.

Comparing wages In temporary and permanent
positions

How do the wages of temporary workers compare to those
of permanent workers? Caution must be exercised when
making comparisons. Permanent workers have more firm-
specific knowledge and may have more on-the-job experi-
ence because of their longer tenure with the firm, and their
wage rates often reflect this difference. Also, wages are
only one component of compensation; the benefits earned
by permanent and temporary workers should be examined
as part of a more in-depth comparison.

‘Wage data on permanent workers from the 1994 Occu-
pational Compensation Survey were used to compare wage
data from the 1994 Temporary Help Supply survey.’ The
differing scope and methodology between the two surveys
introduce factors complicating the comparison. The tem-
porary job descriptions were broader than the permanent
job descriptions, and in some cases included job duties not
found under permanent job descriptions. The temporary
help jobs included full-time, part-time, and seasonal work-
ers, whereas the permanent jobs included only full-time,
year-round workers. Finally, only a few occupations were
similar enough to compare. However, the two surveys had
some features in common, which helped reinforce the com-
parisons: the same areas were selected in both surveys, and
the reference periods (September versus November) were
fairly close. With these differences and similarities taken
into account, some comparisons can be made.

Among the occupations where comparisons were pos-
sible, permanent workers generally earned more per hour
than their temporary counterparts. Of the 13 comparable
occupations in the two surveys, engineers, registered nurses,
licensed practical nurses, and computer programmers were
exceptions to this pattern.

Because of these findings, can it be said that temporary
workers are cheaper for firms to hire? Unfortunately, there
hasn’t been enough analysis of the industry to make that
statement. The permanent wages shown in table 3 do not
include the total cost of compensation to the employer.
Across the economy as a whole, benefits tend to account for



Occupational Compensation

A Look at
Temporary Help
Wage Rates

BY ELIZABETH DIETZ

In recent years, the temporary help supply industry has
enjoyed a surge of growth that may be attributed to a grow-
ing economy, increased governmental regulations of em-
ployers, and the increased use of technology. Businesses
can respond to increases in demand, avoid many of the le-
gal and regulatory concems of hiring new staff, and locate
skilled workers through the use of temporary help agen-
cies. Furthermore, temporary help agencies are providing
more variety in the services they offer. Management ser-
vices, professional services, long-term staffing, and tempo-
Tary-to-full-time placement are some of the services the tem-
porary help industry has offered and businesses have
employed.' Furthermore, businesses are demanding more
variety in temporary help services. Although clerical work
traditionally dominated industry demand, in recent years
the demand for temporary workers in industrial and pro-
fessional segments has been gaining in proportion to the
clerical segment.”

What are the wage rates of these temporary occupations?
Have temporary help wages and industry composition
changed over time? If so, how do wages of temporary work-
ers compare to wages of workers in comparable permanent
positions? BLS surveyed the temporary help industry in
1994 and found some interesting results.>

Findings from the 1994 survey

Temporary help supply workers earned an average of
$7.74 per hour, according to the November 1994 survey.
(See table 1.) However, because of the variety of occupa-
tions available in the industry, wages vary considerably
among occupations. Generally, white-collar jobs paid the
most, blue-collar jobs paid in the middle range, and service

Elizabeth Dietz is an economist in the Division of Compensation Data
Analysis and Planning, Bureau of Labor Statistics. Telephone (202) 606-
6287.

jobs paid the least. But there was a great deal of variation
in wages among occupations within these categories. The
higher paying occupations tended to have the fewest work-
ers, while the greatest number of workers generally were
concentrated in lower paying occupations.

White-collar workers. White-collar workers comprised al-
most half of all temporary help supply workers. This group
averaged $9.37 per hour, but the occupations within this
category were as diverse as the wages paid to these work-
ers. The 1994 survey grouped white-collar occupations into
four categories:

* Professional specialty and technical occupations;
© Executive, administrative, and managerial occupations;
* Marketing and sales occupations; and

© Clerical and administrative support.

Within these categories, the survey reported the wages
of several specific occupations.

Professional specialty and technical occupations gener-
ally earned the highest hourly wages. Among the occupa-
tions represented in this category were computer systems
analysts, designers, engineers, registered nurses, technical
writers, and computer programmers; these occupations also
tepresent the highest paid temporary help workers
surveyed,with national average wage rates from $21.98 to
$28.75 per hour. Within this category, engineers comprised
the most populous occupational group, at over 10,200. Com-
puter systems analysts earned the highest national average
wage of any temporary occupation surveyed, at $28.75 per
hour. Wages varied among cities, with computer program-
mers in Boston earning the highest city average wage rate

Compensation and Working Conditions September 1996 46



Table 1: Employment and average hourly wages of temporary
workers by occupation and occupational category, November

Average
hourly
wage
$ 7.74
9.37
24.11
17.63
28.75
28.54
21.98
2271
12.60
25.40
13.64
10.32
14.30
Executive, administrative, and
managerial occupations 9,124 17.22
Accountants and auditors a 4,323 13.96
Marketing and sales occupations .. 31,513 6.61
Cashiers .... - 3,397 5.72
Product promoters .. 9,082 6.43
Telemarketing sales workers .. 9,041 7A8
Clerical and administrative support. | 431,769 796
Bookkeepers, accounting, and
auditing clerks 18,392 8.30
Computer aides 249 9.44
Computer operators and
printer operators .. 4217 10.63
Customer service workers .. 18,068 781
Data entry operators 57,416 715
General office clerks. 90,182 6.78
Inventory clerks .. 4,683 6.59
Receptionists 39,733 707
Secretaries 61,353 9.49
Typists and word processors .. 57,173 9.85
Blue-collar occupations ... 444,895 6.02
7.23
6.26
7.03
5.67
5.39
5.64
6.28
5.67
5.26
7.01

at $36.68 per hour. The professional specialty and techni-
cal occupations, although well paid, comprise only 14 per-
cent of all white-collar workers.

Executive, administrative, and managerial occupations
account for only 2 percent of all temporary white-collar
workers. About half of these were accountants and audi-
tors, who earned an average of $13.96 per hour.

Marketing and sales occupations, which made up 6 per-
cent of the temporary white-collar work force, generally

47 Compensation and Working Conditions September 1996

had low wage rates. Among the occupations in this cat-
egory, telemarketing sales workers earned a national aver-
age of $7.18 per hour; product promoters, $6.43 per hour;
and cashiers, the lowest paid of the temporary white-collar
occupations, $5.72 per hour.

The largest category, clerical and administrative support
workers, comprised about 80 percent of temporary white-
collar workers. Their wage rates, although generally lower
than those of professional and technical occupations, var-
ied considerably. Computer operators and printer opera-
tors eamed the most at $10.63 per hour. Typists and word
processors had the second highest wage rate, at $9.85 per
hour, followed by secretaries and computer aides, who
earned $9.49 and $9.44 per hour, respectively. At the lower
end of the wage scale, inventory clerks and general office
clerks earned $6.59 and $6.78 per hour, respectively. Gen-
eral office clerks were the most populous of any specific
occupation, with 90,182 workers, 16 percent of all tempo-
rary white-collar workers.

Blue-collar workers. Blue-collar workers were a large oc-
cupational group in the industry, accounting for 40 percent
of the temporary help supply work force. Their wage rates
varied less than did rates for white-collar occupations. The
survey grouped blue-collar occupations into four catego-
mies:

* Precision production, craft, and repair workers;
© Machine operators, assemblers, and inspectors;

© Transportation and material movement workers; and

© Handlers, equipment cleaners, helpers, and laborers.

Precision production, craft, and repair workers had the
highest average wages among blue-collar occupations, at
$7.23. Of all cities surveyed, they earned the most in Bos-
ton at $10.06 per hour and in Baltimore at $9.19. Although
their average wage rate was the highest for blue-collar work-
ers, precision production, craft, and repair workers held
only 11 percent of all temporary blue-collar jobs.

The next highest paying category of temporary blue-col-
lar occupations was transportation and material movement,
with an average of $7.03 per hour. In several cities, these
workers earned more per hour than precision production,
craft, and repair workers. For example, in Charlotte, NC
temporary transportation workers eared $9.28 per hour,
while temporary precision production, craft, and repair
workers earned $7.05 per hour. Workers in transportation
and material movement occupations held only 2 percent of
all temporary blue-collar jobs.

At more than 111,500 workers, machine operators, as-
semblers, and inspectors accounted for 25 percent of all



temporary blue-collar workers. These workers earned a
national average of $6.26 per hour, with a high of $7.08 in
New York and a low of $5.06 in St. Louis.

Handlers, equipment cleaners, helpers, and laborers ac-
counted for 62 percent (275,000) of temporary blue-collar
jobs in 1994, These workers earned a national average of
$5.67 per hour, with a high of $7.15 in Washington, DC
and a low of $4.72 in Tampa, FL. Of all temporary blue-
collar workers, the most highly populated categories, ma-
chine operators, assemblers, and inspectors and handlers,
equipment cleaners, helpers, and laborers, generally earned
the least per hour in all the cities surveyed.

Service workers. About 5 percent of temporary help supply
workers were employed in service occupations, which in-
cluded janitors and cleaners, maids and housekeepers, and
nursing aides, orderlies, and attendants. These workers
earned a national average of $5.67, $5.26, and $7.01 per
hour, respectively. As in the other categories, there was a
great deal of variation in wages across cities. For example,
janitors and cleaners earned a low of $4.85 per hour in
Orlando, and a high of $6.75 in Boston. Nursing aides,
orderlies, and attendants earned a low of $7.35 per hour in
Baltimore and a high of $8.96 in Seattle. Nursing aides,
orderlies, and attendants were the most numerous of the
temporary service occupations, with 28,400 workers in 1994,
or about half of all temporary service workers.

Changes over time

How much have temporary workers’ wages changed over
time? Some broad comparisons can be made using a Sep-
tember 1987 Industry Wage Survey of temporary workers
and the 1994 survey.* To compare wages from the two sur-
veys, the Consumer Price Index (CPI) was used to adjust
the 1994 wages to constant 1987 dollars. (See table 2.)
From September 1987 to November 1994, the CPI increased
30.2 percent.’ Adjusting the 1994 wage averages downward
30.2 percent would reflect the buying power of the 1994
wages in terms of 1987 dollars. The adjusted 1994 wages
are referred to hereafter as “real” wages. The 1987 survey
Teported that all temporary workers earned an average of
$6.42 per hour, while the 1994 survey reported average
hourly earnings of $7.74. Looking at these nominal wages,
it appears that temporary workers’ earnings increased 21
percent. But, based on the CPI, the comparable buying
power of these wages based on 1987 dollars decreased more
than 7 percent.

Changes over time, particularly for general categories
of workers, must be interpreted with caution for several rea-
sons. First, comparisons are muddied by an industry's
growth (or decline). Employment rose by over 75 percent
in this industry, from 629,000 workers in 1987 to 1.1 mil-
lion workers in 1994, and neither survey attempted to track
individual workers’ wage rates over this period. With this
growth came a dramatic shift in the composition of the tem-

Table 2: Average hourly wage rate comparisons for selected
‘occupations using the Consumer Price Index-All Urban Consumers.

1994 | Percent
1987 — In| change
wages from 1987

dollars | to 1994
$6.42 | $ 5.95 738
18.17 | 22.09 21.55
24.74 21.92 | -11.38
14.99 16.89 12.64
15.96 19.51 22.26
10.30 7.93 | -23.03
10.03 10.99 9.52
4.54 4.39 3.21
5.26 5.52 4.86
5.51 4.94 | -10.35
6.61 6.38 3.54
7.83 8.17 429
6.11 5.49 | -10.10
5.11 5.21 1,93
7.66 7.29 4.83
Typists and word Processors .. 7.89 7.57 4.10

Biue-collar occupations
Precision production, craft,

i 8.14 5.55 | -31.77

4.78 481 0.61

7.78 5.40 | -30.59
442 4.36 1.45
3.72 4.14 11.31

433 4.33 0.06

436 4,36 0.10
2.09

NOTE: Information in this table is based on the 30.2 percent change
in Consumer Price Index from September 1987 to November 1994.

Nurses aides, orderlies, and

attendants 5.50 5.39

porary help supply work force. In 1987, white-collar jobs
accounted for 61 percent of workers in the industry, and
blue-collar jobs, 27 percent; by 1994, white-collar employ-
ment comprised only 49 percent of all temporary workers,
while blue-collar employees rose to 40 percent. Thus, overall
changes in wage rates could primarily be the effect of the
changes in the industry’s occupational composition.

Another caveat is that the 1987 survey selected estab-
lishments with 50 or more employees; the 1994 survey se-
lected establishments with 20 or more employees. Since
firm size may affect wage rates, the differences in scope
may make the two surveys incompatible to some degree. It
is uncertain as to whether average wages would have been
significantly different if the 1987 survey had included es-
tablishments with as few as 20 employees.

Looking at specific occupations, temporary jobs experi-
enced mixed results in terms of wage changes from 1987 to
1994. The wage rates of some jobs increased substantially

Compensation and Working Conditions September 1996 48