Two men walk into a temporary staffing agency near O’Hare International Airport to inquire about a job. They are both in their 50s, with similar work histories. One is Black, the other Latino.
The Black man, who arrives first, is told the agency is not hiring at the moment. He leaves his contact information and never gets a call. The Latino man, who arrives 20 minutes later, is told about a warehouse job at an electronic assembly plant that pays $11 an hour. He is given a work order to start the following Monday and is encouraged to refer friends.
That anecdote is included in a new report, released Tuesday morning, that details an experiment designed to demonstrate what workers and activists have long alleged — that racial discrimination is rampant in the temporary staffing industry, depriving Black candidates of jobs and favoring Latino workers who can be more easily exploited.
Temp agencies, which have become major employers as companies increasingly outsource industrial jobs to cut labor costs, have faced similar accusations in numerous lawsuits filed in Illinois. But racial discrimination is difficult to prove.
“This report provides really strong evidence that confirms what workers have been saying for years,” said Tim Bell, executive director of the Chicago Workers’ Collaborative, an advocacy group that produced the report in partnership with Warehouse Workers for Justice, Partners for Dignity & Rights and the Equal Rights Center. “This changes the discourse because it is really clear what is happening.”
The experiment used matched-pair testing, a recognized methodology in discrimination studies, to isolate the effect of race on hiring decisions. Six Black job candidates were paired with five Spanish-speaking Latino applicants who were similar in gender, age, education and work experience, and over the course of three months in 2019 the pairs were sent into 60 Chicago-area temp agencies, minutes apart, to apply for jobs.
The workers were in high demand: A total of 204 job offers were made on site and in follow-up conversations. But the test found that two-thirds of the agencies did not treat the workers equally.
In the vast majority of those cases, the Latino workers were given more favorable treatment. Sometimes they alone were allowed to apply or offered a job, or they were offered more information or better positions than their Black counterparts.
Overall, for every three jobs offered to Black applicants, four were extended to Latinos.
At the 10% of agencies where Black applicants were given preference over Latinos, they were offered less desirable jobs, including those with lower pay or on the later or overnight shifts at factories.
About 15% of agencies engaged in what the report calls job segregation, offering certain jobs only to Latinos and others only to Black candidates.
In one example, a 39-year-old Black woman who sought a job at an agency was given three options: one involved heavy lifting, the other a graveyard shift and the third was as a second-shift warehouse picker that paid $12.40 an hour. She was required to pass a drug test. The 42-year-old Latina woman who inquired about a job at the same agency 8 minutes later was given totally different options: second shift at a flower company at $13 an hour, with productivity bonuses, and no drug test.
The hiring practices create a workplace environment that makes it easier to exploit people, the report said. By sow mistrusting and resentment across racial lines, it makes it difficult to organize workers for better pay and conditions, it said.
Meanwhile, the preference for Latinos, often immigrants, suggests they may be perceived as less likely to complain about poor working conditions if they are not legally authorized to work in the U.S., the report said. About 70% of temp agencies are located in neighborhoods where more than a quarter of the population is Hispanic.
“While both Black and Latinx workers are just trying to make a living, companies exploit both groups’ vulnerabilities, encouraging racial divisions that increase company profit margins at the expense of workers,” the report said.
The outsourcing of industrial jobs to temp agencies has raised concerns about low pay and little accountability for working conditions. The workers filling those jobs are overwhelmingly Black and Latino, who account for about 85% of blue-collar temp assignments in the Chicago area but just 40% of the population, according to the report.
Some lawsuits alleging hiring discrimination have resulted in settlements for workers. Last year, Personnel Staffing Group, which does business as Most Valuable Personnel, agreed to a consent decree and $568,500 settlement to resolve a race and sex discrimination suit brought by the Equal Employment Opportunity Commission involving its locations in the Chicago suburbs of Cicero, Joliet and Franklin Park.
Workers’ rights advocates want a policy solution that monitors the hiring practices of staffing firms.
The report calls for the state to issue a seal of approval to temp agencies that agree to keep demographic information on job applicants, a certification that companies could take into account when deciding which temp agency to hire to fill jobs. While reporting the demographics of temp workers is required by Illinois’ Temporary and Day Labor Services Act, considered the strongest such law in the U.S., an effort to add a seal of approval program for tracking job applicants failed in 2017.
The report also calls on companies that subcontract the jobs to stop putting pressure on their temp agencies to reduce labor costs, which leads to those agencies to engage in exploitative practices.
“The losers of that strategy are all the workers,” Bell said. “The Latinx workers whose rights are violated and the African American workers who need jobs to support their families. So something has to change at the top of the supply chain.”