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Are independent contractors a smaller percentage of workers? BLS data in context

June 08, 2018

Has the number of independent contractors as a percentage of total employment shrunk over the last 12 years? Some seek to put data released yesterday by the US Bureau of Labor Statistics into context.

The US Bureau of Labor Statistics’ data released yesterday showed independent contractors represented 6.9% of total employment in the US in May 2017, down from 7.4% when it last measured independent contractors in February 2005.

While that differs from other estimates — Staffing Industry Analysts says they comprise 15.5% of the workforce — Tony Gregoire, SIA’s director of research, the Americas, and others point to differences in how the BLS measures independent contractors.

For example, the BLS study included only people for whom being an independent contractor was their main job. That leaves out moonlighters and diversified workers.

In addition, the BLS study counts only those who self-identify as “independent contractor, independent consultant or freelance worker.” However, many may consider themselves business owners rather than independent contractors.

The BLS also hasn’t yet released data on those who find work through online staffing apps, and that could skew the figure. It plans to release those data in September.

Upwork CEO Stephane Kasriel also noted the finding that independent contracting as a share of the workforce has gone down since 2005 is contradictory to the majority of research today. Kasriel cited the BLS’ focus on only work that provides a primary source of income as one concern, and the fact the BLS data looks at only one point in time. He also discussed his thoughts in an article in Fast Company magazine. Upwork’s own research has found that 57 million Americans freelance.

Rob Cruz, VP of contingent workforce compliance and senior counsel at TalentWave, also said it’s difficult to believe the percentage of independent contractors has gone down since 2005 given the amount of things that have changed.

Cruz noted other reports that put the independent contractor percentage much higher. On the other hand, the BLS data agreed with some aspects of other reports, such as independent contractors being relatively satisfied with their situation. The BLS data noted 79.1% of independent contractors preferred alternative work arrangements. That compares to 43.0% for on-call workers and 46.4% for temporary help agency workers.

“We’re in a really uncertain time for independent contractors,” Cruz said, citing the recent California Supreme Court decision to adopt a tougher standard for independent contractor misclassification. And it might be a good time for companies to review their own contingent workforce programs.

Other findings on independent contractors in the BLS data include:

  • The median usual weekly earnings of full-time independent contractors was $851 compared to $797 for on-call workers, $521 for temporary agency workers and $1,077 for workers provided by contract firms. It was $884 for workers with traditional work arrangements.
  • More than one in three independent contractors were age 55 or older.
  • About two-thirds of independent contractors were men.

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