Contingent and Alternative Employment Arrangements, February 2005
Technical information: (202) 691-6378 USDL 05-1433 http://www.bls.gov/cps/ For release: 10:00 A.M. EDT Media contact: 691-5902 Wednesday, July 27, 2005 CONTINGENT AND ALTERNATIVE EMPLOYMENT ARRANGEMENTS, FEBRUARY 2005 The proportion of U.S. workers holding contingent jobs was little different in February 2005 than in February 2001, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Contingent workers are persons who do not expect their jobs to last or who reported that their jobs are temporary. Using three alternative measures, contin- gent workers accounted for 1.8 to 4.1 percent of total employment in February 2005. (See table A.) In February 2001, the last time the survey was conducted, they ranged from 1.7 to 4.0 percent. The first time the survey was conducted, in February 1995, the estimates ranged from 2.2 to 4.9 percent. The analysis in this release focuses on the broadest estimate of con- tingent workers--all those who do not expect their current job to last. In addition to contingent workers, the survey also identified those workers who have alternative work arrangements. In February 2005, there were 10.3 million independent contractors (7.4 percent of total employment), 2.5 million on-call workers (1.8 percent of total employment), 1.2 million temporary help agency workers (0.9 percent of total employment), and 813,000 workers provided by contract firms (0.6 percent of total employment). (See table 8.) The proportion of the total employed who were independent contrac- tors increased from 6.4 percent in February 2001. The proportions for the other three alternative work arrangements showed little or no change from February 2001. An employment arrangement may be defined as both contingent and alterna- tive, but this is not automatically the case because contingency is defined separately from the four alternative work arrangements. In February 2005, the proportion of workers employed in alternative arrangements who also were classified as contingent workers ranged from 3 percent of independent con- tractors to 61 percent of temporary help agency workers. (See table 12.) Data on contingent and alternative employment arrangements have been collected periodically in supplements to the Current Population Survey (CPS) since February 1995. The CPS is a monthly nationwide survey of about 60,000 households that obtains information on employment, unemployment, earnings, demographics, and other characteristics of the civilian noninstitutionalized population age 16 and over. A description of the concepts and definitions used in the supplement is included in the Technical Note that follows this analysis. Some highlights from the February 2005 survey follow: - 2 - Table A. Contingent workers and workers in alternative arrangements as a percent of total employment, February 2005 ---------------------------------------------------------------------------- | Percent Definition and alternative estimates of contingent workers | of total | employed -----------------------------------------------------------------|---------- Contingent workers are those who do not have an implicit or | explicit contract for ongoing employment. Persons who do not | expect to continue in their jobs for personal reasons such as | retirement or returning to school are not considered contingent | workers, provided that they would have the option of continuing | in the job were it not for these reasons. | | Estimate 1 | Wage and salary workers who expect their jobs will last for an | additional year or less and who had worked at their jobs for 1 | year or less. Self-employed workers and independent contractors | are excluded from the estimates. For temporary help and contract| workers, contingency is based on the expected duration and tenure| of their employment with the temporary help or contract firm, not| with the specific client to whom they were assigned. | 1.8 | Estimate 2 | Workers including the self-employed and independent contractors | who expect their employment to last for an additional year or | less and who had worked at their jobs (or been self-employed) | for 1 year or less. For temporary help and contract workers, | contingency is determined on the basis of the expected duration | and tenure with the client to whom they have been assigned, | instead of their tenure with the temporary help or contract firm.| 2.3 | Estimate 3 | Workers who do not expect their jobs to last. Wage and salary | workers are included even if they already have held the job for | more than 1 year and expect to hold the job for at least an addi-| tional year. The self-employed and independent contractors are | included if they expect their employment to last for an addi- | tional year or less and they had been self-employed or independ- | ent contractors for 1 year or less. | 4.1 -----------------------------------------------------------------|------------- Type of alternative arrangement | -----------------------------------------------------------------|------------- Independent contractors | Workers who were identified as independent contractors, independ-| ent consultants, or freelance workers, whether they were self- | employed or wage and salary workers. | 7.4 | On-call workers | Workers who are called to work only as needed, although they can | be scheduled to work for several days or weeks in a row. | 1.8 | Temporary help agency workers | Workers who were paid by a temporary help agency, whether or not | their job was temporary. | .9 | Workers provided by contract firms | Workers who are employed by a company that provides them or | their services to others under contract and who are usually | assigned to only one customer and usually work at the customer's | worksite. | .6 ------------------------------------------------------------------------------- - 3 - --Under the broadest measure of contingency, there were 5.7 million contingent workers in February 2005, accounting for about 4 percent of total employment. --Contingent workers were twice as likely as noncontingent workers to be under age 25. Contingent workers were less likely to be white than noncontingent workers. --Young contingent workers (16- to 24-year olds) were more likely than their noncontingent counterparts to be enrolled in school. --More than half of contingent workers (55 percent) would have preferred a permanent job. --The demographic characteristics of workers in alternative employment arrangements varied widely between the four arrangements. For example, independent contractors were more likely than workers in traditional arrangements to be older, male, and white. Temporary help agency workers were more likely to be young, female, and black or Hispanic or Latino. --The majority of independent contractors (82 percent) preferred their work arrangement to a traditional job, while only 32 percent of tem- porary help agency workers preferred their current arrangement. Demographic Characteristics of Contingent Workers Using the broadest estimate of contingency, 5.7 million workers were classified as contingent in February 2005. Contingent workers were twice as likely as noncontingent workers to be under 25 years old (27 versus 13 percent). Of these young workers, nearly three-fifths of contingent workers were enrolled in school, compared with about two-fifths of youth with noncontingent jobs. Contingent workers age 25 to 64 were found at both ends of the educational attainment spectrum. Compared with noncon- tingent workers, contingent workers were more likely to have less than a high school diploma (16 percent compared with 9 percent) and more likely to hold at least a bachelor's degree (37 percent compared with 33 percent). (See tables 1, 2, and 3.) A slightly larger proportion of contingent workers than noncontingent workers were women (49 versus 47 percent). Contingent workers were slightly less likely to be white (79 percent compared with 83 percent) and much more likely to be Hispanic or Latino (21 percent compared with 13 percent) than their noncontingent counterparts. Part-time workers--individuals who usually work less than 35 hours a week--made up two-fifths of contingent workers, compared with less than one- fifth of noncontingent workers. However, the vast majority of part- time workers (91 percent) were not employed in contingent arrangements. (See tables 1 and 2.) - 4 - Occupation and Industry of Contingent Workers As in previous surveys, contingent workers were distributed throughout the major occupational groups. Compared with noncontingent workers, con- tingent workers were more likely to work in professional and related oc- cupations and construction and extraction occupations. With regard to industries, contingent workers were more likely to hold jobs in the pro- fessional and business services, education and health services, and construction industries. (See table 4.) Job Preferences of Contingent Workers The majority of contingent workers (55 percent) would have preferred a job that was permanent. However, more than 1 in every 3 said they preferred their current arrangement. (The remainder expressed no clear preference.) (See table 10.) By comparison, the proportion was 40 percent in February 2001. Compensation of Contingent Workers Full-time contingent wage and salary workers had median weekly earnings of $488 in February 2005. (See table 13.) (Beginning with the February 2001 survey, information on the earnings of noncontingent workers is not available because it is no longer collected.) Contingent workers continued to be much less likely to have employer- provided health insurance. Less than one-fifth of contingent workers (18 percent) were covered by health insurance provided by their employer, compared with slightly more than half of noncontingent workers (52 percent). Although four-fifths of contingent workers did not receive health insurance from their employer, nearly three-fifths (59 percent) did have health in- surance from some source. (See table 9.) Contingent workers also were much less likely to be eligible for employer- provided pension plans. Half of noncontingent workers were eligible for such plans, while only about 1 in every 5 contingent workers was eligible. Among those who were eligible, contingent workers also were much less likely to parti- cipate in such plans. (See table 9.) Independent Contractors Independent contractors were the largest of the four alternative work arrangements. In February 2005, there were about 10.3 million independent contractors, accounting for 7.4 percent of the employed. These workers were more likely than workers in traditional arrangements to be age 35 and over (81 versus 64 percent), male (65 versus 52 percent), and white (89 versus 82 percent). Thirty-six percent of independent contractors had at least a bachelor's degree in February 2005, compared with 33 per- cent of workers with traditional arrangements. (See tables 5, 6, and 7.) Independent contractors were more likely than those with traditional arrangements to be in management, business, and financial operations occupations; sales and related occupations; and construction and extrac- tion occupations. In terms of industry, independent contractors were more likely than traditional workers to be employed in construction, financial activities, and professional and business services. Fewer than 1 in 10 independent contractors said they would prefer a traditional work arrange- ment. (See tables 8 and 11.) - 5- On-call Workers The second largest group of workers employed in alternative arrangements was on-call workers. Nearly 2.5 million workers (1.8 percent of total em- ployed persons) were on-call workers in February 2005. The characteristics of on-call workers were similar to workers with traditional arrangements, ex- cept that on-call workers were more likely to be young and to have less than a high school diploma. Twenty percent of on-call workers were 16- to 24-year olds, compared with 14 percent of traditional workers. Among on-call workers age 25 to 64, 14 percent did not have a high school diploma, compared with 9 percent of workers in traditional arrangements. (See tables 5, 6, and 7.) On-call workers were much more likely than traditional workers to hold jobs in professional, service, and construction and extraction occupations. By industry, on-call workers were overrepresented, compared with traditional workers, in construction and education and health services. About 44 percent of on-call workers usually worked part time, a much higher proportion than either traditional workers or workers in other alternative arrangements. On- call workers were about equally likely to prefer a traditional arrangement to their alternative arrangement. (See tables 6, 8, and 11.) Temporary Help Agency Workers In February 2005, there were about 1.2 million temporary help agency workers, accounting for 0.9 percent of all employment. These workers were more likely than traditional workers to be women and young. Fifty-three percent of temporary help agency workers were women, compared with about 48 percent of traditional workers. Nearly half of temporary help agency workers were under the age of 35 compared with only 36 percent of workers in traditional arrangements. Temporary help agency employees were much more likely than workers with traditional arrangements to be black (23 versus 11 percent) and Hispanic or Latino (21 versus 13 percent). Seven- teen percent of temporary help agency workers ages 25 to 64 years old had less than a high school diploma, compared with 9 percent of workers in tra- ditional arrangements. (See tables 5, 6, and 7.) In terms of occupation, temporary help agency workers were more likely than traditional workers to hold office and administrative support and production, transportation, and material moving jobs. Compared with traditional workers, temporary help agency workers were more frequently employed in the manufacturing and professional and business services industries. (See table 8.) Among workers employed in alternative arrangements, those employed by temporary help agencies were the least likely to prefer their current arrangement (32 percent). About 56 percent said they would prefer a traditional arrangement. (See table 11.) Workers Provided by Contract Companies The smallest of the four alternative arrangements was contract company employment, with 813,000 workers or 0.6 percent of total employment. These are individuals who were identified as working for a contract company and who usually worked at the customer's worksite. Nearly 70 percent of contract company workers were men, compared with 52 percent of traditional workers. Compared with traditional workers, employees of contract companies were more likely to be black and Hispanic or Latino. Among 25-to 64-year olds, those employed by contract companies were more likely than traditional workers to have less than a high school diploma (13 versus 9 percent); however, the group also had a higher proportion of college graduates (37 versus 33 per- cent). (See tables 5, 6, and 7.) - 6 - Contract company employees were much more likely than workers with traditional arrangements to hold jobs in professional, service, and construction and extraction occupations. Compared with traditional workers, contract company workers were more frequently employed in the construction industry and public administration. (See table 8.) Compensation of Workers in Alternative Arrangements Median usual weekly earnings varied widely among full-time wage and salary workers in the four alternative employment arrangements. Contract company workers ($756) and independent contractors ($716) earned signific- antly more than on-call workers ($519) and temporary help agency workers ($414). (See table 13.) The differences in earnings between the four alternative work arrange- ments reflect in part the demographic and occupational concentration of each arrangement. For example, independent contractors tend to be older, highly educated individuals who work in relatively high-paying management, business, and financial operations occupations. In contrast, temporary help agency workers tend to be younger, less-educated persons who hold relatively low-paying office and administrative support jobs. (See tables 5, 6, and 7.) Compared with workers in traditional arrangements, workers in alter- native arrangements (except those employed by contract companies) were much less likely to be covered by health insurance from any source than workers in traditional arrangements. Workers in all alternative work arrangements were less likely than workers in traditional arrangements to have health insurance provided by their employer. At 49 percent, workers provided by contract firms were the most likely to have health insurance coverage from their employer, while employees of temporary help agencies (8 percent) had the lowest rate of coverage. Fifty-six percent of workers with traditional arrangements had employer-provided health insurance coverage. (See table 9.) Workers in alternative arrangements were also less likely than those in traditional arrangements to be eligible for employer-provided pension plans. As with health insurance coverage, there was considerable variation between the four groups. For example, contract company employees were the most likely to be eligible at 43 percent, while only about 9 percent of workers in temporary help agencies were eligible. In contrast, 53 percent of employees with traditional work arrangements were eligible for employer- provided pension plans. (See table 9.)
- Contingent and Alternative Employment Arrangements, February 2005 Technical Note
- Table 1. Employed contingent and noncontingent workers by selected characteristics, February 2005
- Table 2. Employed contingent and noncontingent workers by selected characteristics, February 2005
- Table 3. Employed contingent and noncontingent workers by school enrollment and educational attainment, February 2005
- Table 4. Employed contingent and noncontingent workers by occupation and industry, February 2005
- Table 5. Employed workers with alternative and traditional work arrangements by selected characteristics, February 2005
- Table 6. Employed workers with alternative and traditional work arrangements by selected characteristics, February 2005
- Table 7. Employed workers with alternative and traditional work arrangements by school enrollment and educational attainment, February 2005
- Table 8. Employed workers with alternative and traditional work arrangements by occupation and industry, February 2005
- Table 9. Employed contingent and noncontingent workers and those with alternative and traditional work arrangements by health insurance coverage and eligibility for employer-provided pension plans, February 2005
- Table 10. Employed contingent workers by their preference for contingent or noncontingent work arrangements, February 2005
- Table 11. Employed workers with alternative work arrangements by their preference for a traditional work arrangement, February 2005
- Table 12. Employed workers with alternative and traditional work arrangements by contingent and noncontingent employment, February 2005
- Table 13. Median usual weekly earnings of full- and part-time contingent wage and salary workers and those with alternative work arrangements by sex, race, and Hispanic or Latino ethnicity, February 2005
- Text version of entire news release
Table of Contents
Last Modified Date: July 27, 2005