The contingent workforce in the U.S. has declined over the past 13 years, according to a new report by the U.S. Bureau of Labor Statistics (BLS), surprising labor market observers and leading to questions about the study's methodology.
In May 2017, 3.8 percent of workers—5.9 million people—held contingent jobs, BLS reported. In February 2005, the last time the survey was conducted, 4.1 percent of workers were considered contingent. BLS defined contingent workers as people who do not have a contract for ongoing employment or who are in jobs structured as temporary.
The information was obtained from the BLS survey of about 60,000 households that provides data on employment and unemployment in the U.S., used in the agency's monthly jobs reports.
The survey also identified workers in various alternative work arrangements, which were measured separately from contingent workers, even though some workers can be counted in both categories.
The survey results seem to support that traditional employment remains the principal driver of job growth in the U.S., as the share of workers in alternative employment arrangements as their primary job fell to 10.1 percent of the labor force in 2017, from 10.7 percent in 2005. The decline mainly comes from a drop in the share of people identifying as independent contractors, which fell to 6.9 percent from 7.4 percent in 2005. The study also identified that there are:
- 2.6 million on-call workers (1.7 percent of total employment), defined as those called in to work only when needed.
- 2.3 million temporary and contract workers (1.5 percent of total employment) employed through staffing or other contracting firms.
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"I was surprised," said Martha Gimbel, research director for the Hiring Lab at global job search engine Indeed. "I would have expected there to be more workers in alternative work arrangements," she said, echoing most labor market projections on the issue.
"But it is very hard to draw any firm conclusions from this report, except that many of us expecting to see a large increase in contingent work were wrong," she continued. "Looking at 2017 compared with 2005, it is impossible to figure out whether there are underlying structural changes in the economy or whether cyclical issues are playing a role, driving home the importance of providing annual data on this type of information."
It may be that the BLS focus on workers' primary employment is obscuring a broader increase in nonstandard employment, noted Jay Shambaugh, a senior fellow in economic studies at the Brookings Institution. "Other economists have found much higher rates of informal work—estimating that a third of adults are engaged in some form of nonstandard work—when they focus on both primary and secondary employment," he said.
Due to the BLS benchmarking of primary jobs, many people typically counted as gig workers were excluded from this data, including people who work gig jobs in addition to a primary job or people who work a variety of nonstandard jobs and may not consider any of them primary jobs.
Economists Lawrence Katz of Harvard University and Alan Krueger of Princeton University estimated in 2016 that alternative workers had jumped to 15.8 percent of all workers, accounting for almost all of U.S. job creation since 2005. But, unlike the BLS report, this included people who worked freelance and contract jobs in addition to their primary jobs.
Research conducted by Edelman Intelligence and commissioned by Upwork, a freelancing website, and Freelancers Union, a labor organization for independent workers, estimated that 36 percent of the U.S. workforce are freelancing, or doing project-based gigs independent of traditional jobs.
Upwork CEO Stephane Kasriel called the BLS report welcome but sorely inadequate, mainly because of the researchers' benchmarking of workers' primary jobs, "which doesn't reflect how people approach and perform various kinds of independent work," he said. "It's shortsighted to use an outmoded measure just because it makes for a handy comparison with historical data." Another concern was that the survey was framed around "a one-week snapshot of labor activity, which doesn't provide an adequate time frame to capture how freelancers are working today," he said.
The most well-known gig workers—Uber and Lyft drivers and other people who find work through mobile apps and websites—were also left out because that data isn't ready yet. BLS expects to release that data subset by Sept. 30. Uber claims to have 900,000 drivers working in the U.S., but for those people to be counted in the upcoming report, they must consider driving for Uber their primary job. Katz and Krueger concluded that only about 0.5 percent of U.S. workers are engaged in such work as a primary job.
"That type of work may not be as prevalent as those who live in metropolitan areas and use ride-sharing apps all the time think, but we will have to wait to know more," Gimbel said.
BLS Reports No Growth for Temps
The American Staffing Association expressed puzzlement about the BLS results that show only 1.5 percent of U.S. workers are counted as temporary and contract employees. "It doesn't make any sense with everything else that's out there, including their monthly employment reports and our quarterly data," which should place the measure between 2 percent and 3 percent, said Steve Berchem, the association's chief operating officer.
BLS reported in its May 2017 monthly jobs report that 2.9 million workers, or 2 percent of the total workforce, were temporary-help agency workers, more than double the 0.9 percent in its latest study on the contingent workforce.
The association's own quarterly establishment survey, with a significantly larger sample size than the BLS survey, indicates that staffing employment was 3.1 million in the second quarter of 2017, much higher than the 2.3 million counted in this latest BLS study.
"We worked with BLS on this study and expressed our concerns with its methodology," Berchem said, particularly the agency's insistence on replicating dated employment categories and definitions from 2005 and relying on a worker survey instead of polling businesses that use contingent labor. BLS surveys both workers and businesses for their monthly reports. "They are measuring in some ways the same thing, but because the methods and the participants are completely different, the results diverge," Berchem said.
"It's important to remember that the BLS study is based on the perspective of the worker," said Tony Gregoire, director of research for the Americas at Staffing Industry Analysts, a research and analysis firm focused on the staffing industry. "For instance, in the BLS study not all independent contractors are classified as contingent, because they may expect their job to last," Gregoire said. "For the same reason, once BLS releases results regarding gig workers, some gig workers may expect their gig to last. From the client's perspective, independent contractors and gig workers are typically contingent, and thus an estimate of contingent work from the client's perspective would be greater than that of the BLS study, which is based on the worker's perspective."