Aug 01, 2018

The Latest Contingent Workforce Data from the BLS

In June 2018, the Bureau of Labor Statistics (BLS) released the 2017 Contingent Workforce Supplement, it’s first since 2005. This report, which focuses on contingent and alternative arrangements, revealed that 3.8% of workers (or approximately 5.9 million people) held contingent jobs in May 2017. The BLS defines contingent workers as those who “do not have an implicit or explicit contract for ongoing employment.”

In addition to contingent workers, the survey also identified workers who have various alternative work arrangements. There were 10.6 million independent contractors (6.9% of total employment), 2.6 million on-call workers (1.7% of total employment), 1.4 million temporary help agency workers (0.9% of total employment) and 933,000 workers provided by contract firms (0.6% of total employment). The report did not include online workers.

Overall, this marks a decline from the last report on this subject by BLS in 2005, where about 11% of workers were defined as contingent under this definition.

Doubts on Gig Economy

These latest figures by the BLS cast some doubt on the prevalent predictions of gig work replacing traditional employment. However, separate data released by the Federal Reserve in June 2018 found that nearly a third of adults are engaged in some form of gig work, either as a primary job or to supplement other sources of income. This is supported by a 2017 Upwork/Freelancers Union study which found that 36% of the US workforce is freelancing. Additionally, the number of 1099-MISCs, which is used to record payments to individuals who are not employees, has jumped approximately 22% since 2000, according to the Mercatus Center at George Mason University. In comparison, the number of W2s fell during the same period by 3.5%.

Economists have long argued that the most visible kids of gig work are a relatively small part of the total labor market, and that nonstandard work arrangements have existed prior to the emergence of app-based platforms such as Uber and TaskRabbit. Of note, Uber’s impact was visible in the data with the number of independent contractors in the transportation and utilities industry increasing by approximately 200,000 from 2005 to 2017.

According to an economist employed by LinkedIn, Guy Berger, the BLS report does not preclude an increase in side jobs. “Because the new BLS data focused on ‘primary’ work, it’s not clear what the trend is when looking at people taking on supplemental part-time work as a secondary source of income,” says Berger. “This could skew the results if you are thinking of the gig economy as a supplement to the traditional 9-5 job structure.”

Additional Report Highlights

Below are some highlights from the BLS report:

  • Contingent workers were more than twice as likely as noncontingent workers to be under the age of 25.
  • Young contingent workers (16- to 24- year-olds) were much more likely than their noncontingent counterparts to be enrolled in school.
  • Contingent workers were more likely to work in professional and related occupations and in construction and extraction occupations that noncontingent workers.
  • 55% of contingent workers would have preferred a permanent job.
  • While 79% of independent contractors preferred their arrangement over a traditional job, only 44% of on-call workers and 39% of temporary help agency workers preferred their work arrangement.
  • 47% of both contingent and noncontingent workers were women.
  • Among full-time workers, median weekly earnings for contingent workers ($685) were 77% of those of noncontingent workers ($886).

 

“I think everybody’s narrative got blown up” ~Michael R. Strain, director of economic policy studies at American Enterprise Institute

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