Question

Helter Industries, a company that produces a line of women's bathing suits, hires temporaries to help produce its summer product demand. For the current four-month rolling schedule, there are three temps on staff and 12 full-time employees. The temps can be hired when needed and can be used as needed, whereas the full-time employees must be paid whether they are needed or not. Each full-time employee can produce 205 suits, while each part-time employee can produce 165 suits per month.

Demand for bathing suits for the next four months is as follows:

Answer 1

The temporary worker industry has been instrumental in decreasing the natural rate and frictional unemployment by providing a flexible workforce and serving as a bridge to permanent employment.

Step-by-step explanation:

The growth of the temporary worker industry is significant for the labor market as it has contributed to a reduction in the natural rate of unemployment. Temp agencies present a dual benefit: not only do they offer immediate employment opportunities for those seeking work, but they also act as a conduit for individuals to secure permanent positions that may otherwise be out of reach. This dual benefit has likely led to a decrease in both frictional unemployment—the short-term unemployment associated with the process of matching workers with jobs—and structural unemployment—which is related to mismatches between the skills workers possess and the skills needed for available jobs.

Additionally, the use of temp jobs as a stepping stone has grown between the 1980s and the 2000s, indicating a shift in workforce dynamics. The expansion of this employment sector aligns with broader macroeconomic trends and labor market flexibilities that can serve to stabilize economies by providing a buffer of employable individuals while reducing the inertia in gaining employment, thus working as a labor market adjustment mechanism.