Low-Income and Low-Skilled Workers Involvement in Nonstandard Employment. How many workers are in alternative work arrangements, and who are they?

10/01/2001

The Contingent Work supplement to the CPS in 1995, 1997, and 1999 splits employment into eight mutually exclusive groups--Independent contractors, on-call workers, temporary help agency workers, contract company workers, direct-hire temporary workers, regular self-employed (excluding independent contractors), regular part-time workers, and regular full-time workers. The first four categories of these are alternative work arrangements. As is clear from Table 2.5, the proportion of workers in temporary help services is approximately one percent, and has not changed substantially in the past five years. Although the proportion of workers in alternative work arrangements is higher if the definition is broadened--particularly if on-call workers are included--there is no discernable trend from these data. This stands in marked contrast to estimates derived from using establishment-based data (Table 2.6), which suggest that temporary help employment grew from 1.4 percent of total employment in 1991 to almost 3 percent of total employment by 1999. The reasons for this discrepancy are not fully understood by the Bureau of Labor Statistics, which publishes both series, so here we are unable to do more than simply note the difference.(29)

Table 2.5
Workers by Employment Arrangement, February 1995, 1997, 1999 (In thousands)
  1995 1997 1999
Type of Employment Arrangement Number Percent Number Percent Number Percent
Independent contractors
Workers who were identified as independent contractors, independent consultants, or freelance workers, whether they were self-employed or wage and salary workers.
8,309 6.7 8,456 6.7 8,247 6.3
On-call workers
Workers who are hired directly by an organization, but work only on an as-needed basis when they are called to do so, for example, substitute teachers, construction workers, and some types of hospital workers.
2,078 1.7 2,023 1.6 2,032 1.7
Temporary help agency workers
Workers who said their job was temporary and answered affirmatively to the question, Are you pad by a temporary help agency? Also, workers who said their job was not temporary and answered affirmatively to the question, Even though you told me your job was temporary, are you pad by a temporary help agency? Thus, these estimates may include the small number of permanent staff of these agencies.
1,181 1.0 1,300 1.0 1,188 0.9
Contract company workers
Workers who are employed by a company that contracted out their services, if they were usually assigned to only one customer, and if they generally worked at the customerme types of hospital workers.
588 0.5 763 0.6 769 0.5
Direct-hire temporaries
Workers in a job temporarily for an economic reason and who are hired directly by a company rather than through a staffing intermediary.
3,393 2.8 3,263 2.6 3,227 2.5
Regular self-employed
Workers who identified themselves as self-employed (incorporated and unincorporated) who were not independent contractors.
7,256 5.9 6,510 5.1 6,280 4.8

Regular part-time
Individuals not in one of the other categories above who usually work less than 35 hours per week.

16,810 13.7 17,290 13.6 17,380 13.2
Regular full-time
Individuals not in one of the other categories above who usually work 35 hours or more per week.
83,600 67.9 87,140 68.8 92,222 70.1
Total 123,215 100 126,745 100 131,345 100
Source:  Bureau of Labor Statistics.
Table 2.6
Number and Percentage of the Workforce Employed by Temporary Help Service Firms
Year Employment in Temporary Help Services
(in thousands)
Total Private NonFarm Employment
(in thousands)
Temporary Help as Percent
of All Employment
1991 1,268 89,847 1.41%
1992 1,411 89,956 1.57
1993 1,669 91,872 1.82
1994 2,017 95,036 2.12
1995 2,189 97,885 2.24
1996 2,352 100,189 2.35
1997 2,656 103,133 2.58
1998 2,926 106,042 2.76
1999 3,228 108,616 2.97

Source: Current Employment Statistics, Bureau of Labor Statistics

Not surprisingly, there is as much heterogeneity in the workers in alternative work arrangements as in the types of these arrangements and the reasons for firms using them. As Table 2.7 shows, according to 1999 BLS data, independent contractors are the most prevalent of the alternative work arrangements at 6.3 percent of all workers. Independent contractors are more likely to be white (91 percent) and male (66 percent) than traditional workers, who are 84 percent white and 52 percent male. On average, independent contractors are more often part-timers and are marginally more educated than workers in traditional work arrangements. Over half of independent contractors are in two industries--construction (20 percent) and services (42 percent).

Table 2.7
Employed Workers with Alternative and Traditional Work Arrangements by Selected Characteristics, February 1999
Characteristic Workers with Traditional Arrangements(a) Independent Contractors On-Call Workers Temporary Help Agency Workers Contract Workers
Total, 16 years and over 119,109 8,247 2,032 1,188 769
Percent 90.6% 6.3% 1.5% 0.9% 0.6%
Gender
Men, 16 years and over 52.4% 66.2% 48.8% 42.2% 70.5%
Women, 16 years and over 47.6% 33.8% 51.2% 57.8% 29.5%
Race and Hispanic Origin(b)
White 84.0% 90.6% 84.2% 74.3% 79.2%
Black 11.4% 5.8% 12.7% 21.2% 12.6%
Hispanic 10.4% 6.1% 11.6% 13.6% 6.0%
Full- and Part-time Status
Full-time workers 82.9% 75.1% 49.3% 78.5% 86.8%
Part-time workers 17.1% 27.9% 50.7% 21.5% 13.2%
Educational Attainment
Less than a high school diploma 9.2% 7.5% 13.4% 14.6% 6.4%
High school graduates, no college 31.4% 29.7% 29.6% 30.5% 22.7%
Less than a bachelor's degree 28.3% 28.5% 29.1% 33.7% 31.9%
College graduates 31.1% 34.3% 27.9% 21.2% 38.9%
Median Earnings
Median usual weekly earnings,16 years and over $540 $640 $472 $342 $756
Preference for Traditional Work Arrangement
Prefer traditional arrangement NA 8.5% 46.7% 57.0% NA
Prefer indirect or alternative arrangement NA 83.8% 44.7% 33.1% NA
It depends NA 5.2% 4.8% 5.3% NA
Not available NA 2.5% 3.8% 4.6% NA
Industry
Agriculture 2.0% 4.9% 2.2% 0.4% 0.4%
Mining 0.4% 0.2% 0.4% 0.1% 2.7%
Construction 5.1% 19.9% 9.6% 2.5% 9.0%
Manufacturing 16.5% 4.6% 4.5% 29.7% 18.0%
Transportation and public utilities 7.4% 5.7% 9.5% 6.1% 14.0%
Wholesale trade 4.0% 3.5% 1.8% 4.2% 0.8%
Retail trade 17.6% 10.2% 14.6% 3.9% 4.6%
Finance, insurance, and real estate 6.7% 8.8% 2.7% 7.0% 8.9%
Services 35.2% 42.1% 52.0% 38.7% 27.1%
Public Administration 5.1% 0.2% 2.6% (c) 10.7%
Not reported or ascertained 0.0% 0.0% 0.1% 6.3% 3.8%
Occupation
Executive, administrative, and managerial 14.6% 20.5% 5.3% 4.3% 12.0%
Professional specialty 15.5% 18.5% 24.3% 6.8% 28.8%
Technicians and related support 3.3% 1.1% 4.1% 4.1% 6.7%
Sales occupations 12.0% 17.3% 5.7% 1.8% 1.5%
Administrative support, including clerical 15.0% 3.4% 8.2% 36.1% 3.4%
Services 13.7% 8.8% 23.5% 8.1% 18.8%
Precision production, craft, and repair 10.5% 18.9% 10.1% 8.7% 16.0%
Operators, fabricators, and laborers 13.6% 7.0% 16.0% 29.2% 10.7%
Farming, forestry, and fishing 2.0% 4.4% 2.9% 0.9% 2.2%
Source:  BLS 1999.
a.  Workers with traditional arrangements are those who do not fall into any of the racteristics, February 1999.
b.  Detail for the above race and Hispanic-origin groups will not sum to totals because data for the ruary 1999.
c.  Less than 0.05 percent.
NA = Not Available.

On-call workers are second most common and have a gender and racial distribution similar to that of traditional workers. However, half of on-call workers work part time compared to 17 percent of workers in traditional arrangements. On average, on-call workers are somewhat less educated than traditional workers with 13 percent having less than a high school diploma compared to 9 percent of traditional workers. Half of on-call workers work in the service industry with the most likely occupations being professional specialty (e.g., teachers, lawyers, engineers, architects) (24 percent) and services (24 percent).

Agency temporaries, who comprise nearly one percent of all workers, are more likely than the average worker to be female (58 percent compared to 48 percent of traditional workers), black (21 percent compared to 11 percent), and Hispanic (14 percent compared to 10 percent). Agency temporaries are the least educated group of workers, on average, and 79 percent are full-time workers, compared to 83 percent of traditional workers. Not surprisingly, nearly 40 percent of agency temporaries work in the services industry, compared to 35 percent of traditional workers, with the most common occupations among agency temporaries being administrative support and clerical positions (36 percent).

The smallest group of alternative workers is contract workers--0.6 percent of all workers. Contract workers, like independent contractors, are more likely to be men (71 percent) than traditional workers (52 percent) but have a similar racial distribution to traditional workers. Contract workers are somewhat more likely than any other group to be full-time workers (87 percent) compared to traditional workers (83 percent), the next highest group. On average, contract workers are more educated than those in any other work arrangement--39 percent of contract workers are college graduates, compared to 31 percent of workers in traditional arrangements.