Manufacturing Looks to Freelance-Style Employment to Save Jobs

Manufacturing jobs around the country have been facing hard times lately. At the United States Steel plant in Granite City, Illinois, for example, nearly three-quarters of the workforce was laid off last year. And many of those workers have yet to find other jobs.

“These were great manufacturing jobs. They paid very well. They became the American dream for young guys with a wife, young kids,” said 53-year-old steelworker Jerry Halbrook.

But what if there was a way for steel mills to retain more employees, without increasing their production costs?

Many of these “traditional” labor sectors are increasingly looking at how the freelance and gig economy is changing the landscape of the workforce today. Factories and construction sites, for instance, can hire part-time or freelance workers on an on-demand basis as work becomes available. They can help process incoming machinery manufacturing shipments, which totaled $407.4 billion in 2012, representing 7.1% of all manufacturing shipments that year.

Hiring freelancers as-needed helps employers cut costs, but it can also leave laborers in a bind — without a reliable income, without a retirement plan, without benefits or health insurance. It’s likely that a laborer would rather jump at the chance for a full-time gig with benefits rather than waiting around for possible work.

Lana Millis, a manager of business development and client services for Transition Services, Inc., suggests an easy compromise: Supplemental Unemployment Benefits, or SUB. With this government-backed plan, employers can retain workers on furlough at lower costs, helping to make sure that employees remain loyal to the company and get paid, even when there’s no work to be done.

Of course, SUBs don’t always work perfectly. Back in Granite City, 29-year-old steelworker Casey Ballentine was laid off after three years, leaving him just shy of qualifying for SUB. Even those who currently receive SUB will see their pay run out at the end of December — and there are still no jobs at the mill.

“A lot of members are hurting, trying to make ends meet, trying to change careers,” said Jason Chism, president of Steelworkers Local 50, one of two unions at the U.S. Steel plant. Even if the mill does re-open soon, it’s likely that many workers won’t find secure employment there.

So the question remains: Can traditional manufacturing jobs survive the age of freelance?

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