Low-Income and Low-Skilled Workers Involvement in Nonstandard Employment. Earnings


Earnings in this sector tend to be lower than for traditional work (although this depends on the type of arrangement). As Table 2.7 indicates, in 1999, the median of earnings for workers in traditional arrangements was $540 per week. This was significantly higher than the median earnings of agency temporaries at $342 per week--nearly $200 per week lower than traditional workers--and on-call workers at $472 per week. Contract workers earned more than workers in any other arrangement with $756 in median weekly earnings in 1999. Independent contractors earned $100 more than workers in traditional arrangements, with $640 in median weekly earnings.

It is possible that differences in educational attainment or in the total hours worked per week contribute to these aggregate discrepancies in earnings. On-call workers and agency temporaries have the lowest educational attainment while independent contractor and contract workers are most highly educated, indicating a strong correlation between earnings and education. In addition, contract workers are more likely than any other group to be working full-time. Full- or part-time status cannot explain all the gaps in earnings, however, since agency temporaries are the second most likely to be working full-time and they have the lowest median weekly earnings.

In a study that controlled for some of these differences, Segal and Sullivan (1998)(30) find that a 15 to 20 percent wage differential exists between wages earned in temporary work and the wages that would be expected from traditional work based on the work history of the individuals in the sample. This differential dropped to about 10 percent when wages were compared to those earned at the types of jobs that the individuals would probably find if not involved in temporary work.