The ‘Gig’ economy, alternative work arrangements and contingent work Washington Economic Forum Olympia, WA October 27, 2016

Outline What is the ‘Gig’ economy and how big is it? 1995, 1997, 1999, 2001, and 2005 BLS Contingent Worker Surveys 2017 BLS Contingent Worker Survey Data Gaps

What is the Gig economy? Larry Katz and Alan Kreuger 2016 Jobs arranged through on-line intermediaries like UBER, Task Rabbit, and Mechanical Turk 0.5% of workers General Accounting Office Study Agency temps, direct hire temps, on-call workers, day laborers, contract company workers PLUS Independent contractors, self-employed workers, part-time workers 2005 BLS data – 30.6%, 2006 GSS data – 35.3%, 2010 GSS – 40.4%

The ‘gig’ economy is hard to measure No agreed upon definition Analytically there are many components – not just the use of on-line platforms to arrange work or to do work Establishment based data are focused on wage and salary workers

The ‘gig’ economy is hard to measure The business model of how businesses arrange to produce their products or provide services is evolving The use of independent contractors, on-call workers, temporary help agency workers, contract company employees Shifts to the use of domestic and foreign outsourcing in an increasingly globalized economy

The ‘gig’ economy is hard to measure Household surveys like the monthly Current Population Survey (CPS) capture larger aggregates – namely, self employment The monthly CPS does not measure a ‘gig’ concept such as workers who arrange their work through or do their work using on-line platforms

Measuring the ‘Gig’ labor experience Gig workers may prefer working when they want and for how long Flexibility allows layering of contract work on top of other forms of work, including traditional employment Freedom of not having a boss Some gig workers may prefer traditional employment but have a hard time finding such jobs What is the likelihood of having pension coverage, health benefits, etc? What is the demographic profile – age, education, etc?

2005 BLS Contingent Worker Survey

2005 BLS Contingent Worker Survey Supplement to the monthly Current Population Survey Measurement objective: To obtain information on workers with contingent jobs To obtain information on four alternative employment arrangements: independent contractors, on-call workers, temporary help workers, and contract company workers.

2005 BLS Contingent Worker Survey Similar supplements were conducted in February of 1995, 1997, 1999, and 2001. All employed persons, except unpaid family workers, are included in the supplement.

What is a contingent worker? Contingent workers are those who do not have an explicit or implicit contract for long-term employment.

What kinds of information does the CWS collect to determine if a worker is a contingent worker? Whether the job is temporary or not expected to continue How long the worker expects to be able to hold the job The main reason people expect to be in their jobs a short time How long the worker has held the job

What kinds of information does the CWS collect to determine if a worker is a contingent worker? Persons who do not expect to continue in their current jobs for personal reasons, such as retirement or returning to school, are not considered contingent workers

Alternative estimates of contingent workers Percent of total employed Table 1. Defining and estimating the contingent workforce, February 2005 Alternative estimates of contingent workers Total Percent of total employed 1. Wage and salary workers, who have worked at their jobs for a year or less, and expect their jobs to last less than another year 2.5 million 1.8 2. Add self employed and independent contractors to the scope of estimate (1) 3.2 million 2.3 3. Workers who do not expect their jobs to last 5.7 million 4.1 Source: February 2005 Contingent Work Supplement, Current Population Survey, Bureau of Labor Statistics

Defining alternative employment arrangements Independent contractors are all those who are identified as independent contractors, consultants, and freelance workers in the supplement, regardless of whether they are wage and salary workers or self-employed On-call workers are persons who are called into work only when they are needed, although they can be scheduled to work for several days or weeks in a row

Defining alternative employment arrangements Temporary help agency workers are workers who are paid by a temporary help agency, whether or not their job was temporary Workers provided by contract firms are 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 that customer’s worksite

Chart 1. Contingent workers as a percent of the total employed, February 1995-2005 Source: February 1995-2005 Contingent Work Supplements, Current Population Survey, Bureau of Labor Statistics

Chart 2. Employed persons by contingent work status and age, February 2005 Source: February 2005 Contingent Work Supplement, Current Population Survey, Bureau of Labor Statistics

Chart 3. Educational attainment of contingent and noncontingent workers, February 2005 Percent Source: February 2005 Contingent Work Supplement, Current Population Survey, Bureau of Labor Statistics

Chart 4. Employed contingent and noncontingent workers by full- or part-time status, February 2005 Source: February 2005 Contingent Work Supplement, Current Population Survey, Bureau of Labor Statistics

Chart 5. Employed contingent workers by their preference for contingent or noncontingent work arrangements, February 2005 Not available 3.5% Source: February 2005 Contingent Work Supplement, Current Population Survey, Bureau of Labor Statistics

Chart 6. Employed contingent and noncontingent workers by health insurance coverage and eligibility for employer-provided pension plans, February 2005 Percent Source: February 2005 Contingent Work Supplement, Current Population Survey, Bureau of Labor Statistics

Chart 7. Workers with alternative arrangements as a percent of the total employed, February 1995-2005 Percent Source: February 1995-2005 Contingent Work Supplements, Current Population Survey, Bureau of Labor Statistics

Chart 8. Employed persons in alternative and traditional work arrangements by age, February 2005 16 to 24 years 25 years and over Reading the top bars left to right: 4.3 19.9 19.3 11.6 13.9 Source: February 2005 Contingent Work Supplement, Current Population Survey, Bureau of Labor Statistics

Chart 9. Employed persons with alternative and traditional arrangements by select educational attainment groups, Feb 2005 Source: February 2005 Contingent Work Supplement, Current Population Survey, Bureau of Labor Statistics

Chart 10. Employed persons in alternative arrangements by their preference for a traditional work arrangement, February 2005 Percent Note: Workers provided by contract firms were not asked about their preference for a traditional arrangement. Source: February 2005 Contingent Work Supplement, Current Population Survey, Bureau of Labor Statistics

Chart 11. Employed persons with traditional and select alternative arrangements by health insurance coverage and eligibility for employer-provided pension plans, February 2005 Percent the yellow bar to the left is temporary help agency workers, the one to the right of the blue bar is workers with traditional arrangements. Source: February 2005 Contingent Work Supplement, Current Population Survey, Bureau of Labor Statistics

Chart 12. Median usual weekly earnings of full-time workers with alternative work arrangements, February 2005 Source: February 2005 Contingent Work Supplement, Current Population Survey, Bureau of Labor Statistics

May 2017 Contingent Worker Supplement

May 2017 CWS - Timeline 2 distinct types of changes to the survey are being considered Minor changes to the 2005 survey question wording Adding a limited number of new questions (4) to the end of the survey

May 2017 CWS – consultation process Additional questions have been developed, BLS has consulted with a variety of known experts and interested parties We realize that there is a lot of interest in this survey The temptation to make lots of changes to the 2005 CWS is strong Across time comparability is extremely important Identifying areas of significant research that we can undertake to plan for possible fielding after 2017 is also very important

May 2017 CWS- changes to 2005 wording Modifications to the wording to reflect changes in institutions such as the passage of the ACA need to be made by March The software language used for the 2005 and earlier versions of the questionnaire is no longer supported by the Census Bureau The entire instrument, which has been termed the most complex supplement we have ever undertaken, has to be completely reprogrammed in a new software language. Work on the reprogramming was started in June 2016 to ensure a May 2017 fielding

May 2017 CWS- new questions Do individuals obtain customers or in-person tasks through companies that electronic match them, often through apps Main job, Second job (if identified previously as a multiple job holder), Additional work for pay Do workers complete short, online only tasks posted on electronic lists for pay

May 2017 CWS- new questions Prior to being asked, the new questions were: Fully specified Are we asking what we think we are asking? Cognitively tested Do respondents understand what we are asking? Submitted to the Office of Management and Budget in June 2016 A ‘Federal Register Notice’ was published on Sep 30, 2016 with a deadline of November 29, 2016 for comments

Introduction I now have a few questions related to how the Internet and mobile apps have led to new types of work arrangements. I will ask first about tasks that are done in-person and then about tasks that are done entirely online.

Question 1 Some people find short, IN-PERSON tasks or jobs through companies that connect them directly with customers using a website or mobile app. These companies also coordinate payment for the service through the app or website. For example, using your own car to drive people from one place to another, delivering something, or doing someone’s household tasks or errands.   Does this describe ANY work (you/NAME) did LAST WEEK? Yes No

Question 2 Was that for (your/NAME’s) (main) job, (your/NAME’s second job), or (other) additional work for pay? Main job Second job Additional work for pay

Question 3 Some people select short, ONLINE tasks or projects through companies that maintain lists that are accessed through an app or a website. These tasks are done entirely online and the companies coordinate payment for the work.   For example, data entry, translating text, web or software development, or graphic design. Does this describe ANY work (you/NAME) did LAST WEEK? Yes No

Question 4 Was that for (your/NAME’s) (main) job, (your/NAME’s second job), or (other) additional work for pay? Main job Second job Additional work for pay

What to expect from the May 2017 CWS? Katz-Kreuger 2016 study

Alternative Work Arrangements 1995 CPS 2005 CPS 2016 Katz-Krueger study Alternative work arrangements 9.3 10.1 15.8 Independent Contractors 6.4 6.9 8.4 On-Call Workers 1.6 1.7 2.6 Temporary Help Agency Workers 1.0 0.9 Workers provided by Contract Firms 0.5 0.6 3.1

DATA GAPS

Data Gaps The May 2017 Contingent Worker Survey (and the Katz/Kreuger study) are from the individual worker perspective There is a need for an establishment based survey

Data Gaps What kinds of workers are used to produce goods or provide services? What other margins of adjustment are used such as domestic and foreign outsourcing? Industry of placement of temporary help agency workers

Employment in temporary help services is considered a leading indicator for total nonfarm employment. However, one of the largest gaps in our data is not knowing the industry placement for workers in this industry.

BLS ‘quick’ response surveys 1993 and 1995 Surveys of Employer Provided Training (SEPT) Update to SEPT Quarterly Refiling Survey Add a small number of questions

High Priority Data Gaps Globalization, Value added chains, and Factoryless goods production Service sector output, quality adjustment, productivity and prices Innovation / R&D The changing nature of work, Gig – Contingent - Alternative work The demand for skills and educational attainment Industry classification and business function Local area detail (regional, state, MSA, county)

Associate Commissioner Office of Employment & Unemployment Statistics Michael W. Horrigan Associate Commissioner Office of Employment & Unemployment Statistics www.bls.gov 202-691-5735 Horrigan.Michael@bls.gov