Temp Workers’ Pay Rises Faster Than Permanent Workers’

America’s growing legion of temporary workers is seeing its paychecks fatten more quickly than those of their permanently employed comrades.

The average hourly pay for workers at the nation’s biggest temporary staffing company, Manpower Inc., rose nearly 5.8% in the third quarter, compared with a 3.3% gain for U.S. workers overall, the company said Wednesday.

Smaller rival Randstad Staffing Services of Atlanta said the trend has continued at its company, with hourly pay in the Southeast rising by 6.4% in October from a year earlier, compared with a national average gain of just 2.7%.

Temp workers are getting better benefits too. This year, Randstad and Olsten Corp. of Melville, N.Y., began offering the sort of perks--from health and dental care to 401(k) plans--normally associated with full-time employers.

In a separate report released Wednesday, it was revealed that U.S. job cuts soared more than 60% last month to the highest level since January, an outplacement firm said.

Chicago-based Challenger, Gray & Christmas Inc. said that layoffs in October totaled 47,911, up 62% from September’s 29,632.

The October total was the highest since 97,379 in January and was also the highest October number since 1993, when 66,801 people were thrown out of work.

The job cut total for the year to date of 410,208 is about 20% above the year-ago level of 342,824, it said.

“The October job cut number is further confirmation that the economy has cooled off since the summer and that the forces driving downsizing--technology, deregulation, cost-cutting, free trade and re-engineering--remain undiminished,” said John Challenger, executive vice president at the international outplacement firm.

The wage data on temporary workers’ improving fortunes would appear to be a warning sign: that prolonged tightness in the labor force is finally about to translate into higher wage and benefit costs for employers. That is something inflation-wary Federal Reserve Board officials and bond investors have dreaded all year.

But temp agency executives and private economists said the rising pay and benefits have more to do with the changing nature of the temp business than with labor-force pressures.

“Pay rates have gone up because the labor market has tightened, but they’ve gone up selectively because of certain markets” and because more highly skilled workers are taking temporary jobs, said Mitchell Fromstein, chief executive of Milwaukee-based Manpower.

In other words, the temporary work force is no longer the exclusive domain of moderately paid secretary or clerical workers. It has been invaded by bankers, accountants, computer experts and others who demand higher pay and better benefits.

“With the churn that’s happening in corporate America, we recognize that people are entering the labor market for different reasons,” said Randstad spokeswoman Joanne DeLavan.

At Randstad, average hourly pay rose 6.4% to $8.17 in October. That reflects a wide pay-scale range and, the company said, was not affected by the recent increase in the minimum wage to $5.15. Temporary workers in industrial jobs earned an average $7 an hour, while those in technical jobs pulled down $22. Those wages reflect action in the fast-growing Southeast.

Manpower’s Fromstein provided salary growth by percentage only and not the dollar amount. Olsten and another big agency, Kelly Services Inc. of Troy, Mich., said salary data were not available.

The data from Manpower and Randstad suggest a higher rate of wage growth than that shown in Labor Department statistics for temp workers. That category, officially known as “help supply services,” rose 4.1% in the third quarter.

Thomas Nardone, an economist at the Bureau of Labor Statistics, said the discrepancy could stem from a difference between the mix of temporary employees overall and of those employed by the agencies.