Low-Income and Low-Skilled Workers Involvement in Nonstandard Employment. What are the different types of alternative work arrangements?

10/01/2001

Alternative work arrangements are defined by the nature of the hiring arrangement between the worker and the employer.(17) The work provided by temporary help agencies is one example of these arrangements, while others include independent contractors, on-call workers and contract company workers. These are quite different types of work: for example, independent contractors might be real estate agents or freelance writers, while on-call workers include nurses, substitute teachers, and construction workers, and contract company workers include building security and cleaning workers and some computer programmers.(18)

It is worth examining the definition of temporary service work in more detail, both because it is quite complex and because it will be the focus of this report. The complexity is apparent in the conflicting estimates that come from worker-based surveys (the Current Population Survey (CPS)) and establishment-based surveys (the Current Employment Statistics survey (CES) and the Occupational Employment Statistics (OES) survey). In the CPS temporary help agency workers are those workers who said their job was temporary and answered affirmatively to the question, "Are you paid by a temporary help agency?" Workers who said their job was not temporary and answered affirmatively to the question, "Even though you told me your job was not temporary, are you paid by a temporary help agency?" are also included in the estimate of temporary help agency workers.(19) According to 1999 CPS data, approximately 1.2 million workers--about one percent of all workers--were temporary help agency workers. This estimate includes both workers placed by the temporary agency and a small amount of permanent full-time staff of these agencies--estimated to be about 3.2 percent of all workers employed by a temporary agency.(20)

In establishment-based surveys, such as the CES, the measure refers to the temporary help agency workers using the Standard Industrial Classification (SIC) code 7363--help supply services. Thus, while the CPS surveys people the CES surveys firms and, thus, counts the total number of temporary help services jobs. The help supply services code includes: "Establishments primarily engaged in supplying temporary or continuing help on a contract or fee basis. The help supplied is always on the payroll of the supplying establishments, but is under the direct or general supervision of the business to whom the help is furnished."(21) Thus, help supply services include employee leasing services workers and permanent staff at temporary help agencies as well as temporary help service workers. Because workers in employee leasing firms are not likely to resemble other agency temporaries, the presence of these firms within this classification makes comparisons using these data less reliable.(22)

Finally, it is worth noting that not all alternative work arrangements are transitory in nature. In fact, the Bureau of Labor Statistics makes a clear distinction between contingent work and alternative work arrangements, defining the former as: "Contingent work is any job in which an individual does not have an explicit or implicit contract for long-term employment or one in which the minimum hours worked can vary in a nonsystematic manner."(23) The difference is evident in an examination of Table 2.1 which indicates that although the majority of contingent workers are in alternative work arrangements, a small percentage of contingent workers are in traditional work arrangements, ranging from 3.2 to 3.6 percent from 1995 to 1999. Within the alternative work arrangement category there is substantial variation: independent contractors resemble workers in traditional arrangements and temporary help agency workers are at the other end of the spectrum.

Table 2.1
Number and Percentage of Employed Workers in Alternative and Traditional Work Arrangements by Contingent(a) and Noncontingent(b) Status, February 1995, 1997, 1999 (In thousands)
Arrangement 1995 1997 1999
Contingent Noncontingent Contingent Noncontingent Contingent Noncontingent
With alternative arrangements: Number % Number % Number % Number % Number % Number %
  • Independent contractors
316 3.8% 7,993 96.2% 296 3.5% 8,160 96.5% 239 2.9% 8,008 97.1%
  • On-call workers
792 38.1% 1,286 61.9% 533 26.7% 1,463 73.3% 569 28.0% 1,463 72.0%
  • Temporary help agency workers
785 66.5% 396 33.5% 738 56.8% 562 43.2% 664 55.9% 524 44.1%
  • Contract company workers
129 19.8% 523 80.2% 135 16.7% 674 83.3% 155 20.2% 614 79.8%
With traditional arrangements(c) 3,998 3.6% 107,054 96.4% 3,883 3.4% 110,316 96.6% 3,811 3.2% 115,298 96.8%
Total 6,020 4.9% 117,252 95.1% 5,585 4.4% 121,175 95.6% 5,439 4.1% 125,906 95.9%
Source:  Bureau of Labor Statistics.
a.  For this table we use the broadest definition of contingent work which includes workers who do not expect their jobs to last. The self-employed and independent contractors are included if they expect their emploiyment to last for an additional year or less and they had been self-employed or independent contractors for 1 year or less.
b.  Noncontingent workers are those who do not fall into any estimate of contingent workers.
c.  Workers with traditional arrangements are those who do not fall into any of the alternative arrangements categories.