Employment and Jobs

Hill Briefing Highlights Implications of BLS Contingent Worker Supplement

June 22, 2018  • Alastair Fitzpayne

The Future of Work Initiative hosted a briefing Wednesday on Capitol Hill to discuss the findings and implications of the 2017 Contingent Worker Supplement (CWS). Released on June 7, the supplement was the first government estimate of contingent and alternative work arrangements since 2005. The new data show that 10.1 percent of workers are in alternative arrangements as their main job, a number that’s held steady since the first CWS was conducted in 1995. The event highlighted the need for a comprehensive understanding of the labor market in order to develop effective policies for workers.

Attendees heard remarks from Senator Mark Warner of Virginia, honorary co-chair of the Future of Work Initiative, and Senator Todd Young of Indiana about how better data on work arrangements can help policymakers design policies to support contingent and alternative work. Both Senators advocated for the Department of Labor to administer the latest version of CWS. Mike Horrigan, Associate Commissioner of Employment and Unemployment Statistics for the BLS, presented the new numbers, including breakdowns by age, race, and other factors. Sarah Kessler, a reporter from Quartz who recently published a book on the gig economy, then moderated a panel of experts, including Eileen Appelbaum, Co-Director of the Center for Economic and Policy Research (CEPR), Palak Shah, Social Innovations Director at the National Domestic Workers Alliance (NDWA), and Jim Spletzer, Principal Economist at the U.S. Census Bureau, to discuss the implications and limitations of the new numbers.

By bringing together experts from a range of backgrounds and perspectives, the event was able to both dive into the meaning of the new numbers and contextualize them in a broader landscape of what we do and don’t know. Although the CWS provided important information about those in contingent and alternative work arrangements, it does not provide a complete picture of work in today’s economy. The event highlighted how these data can be a springboard for next steps for policymakers, researchers, and everyone.

Where to go from here

For policymakers

The recent CWS numbers suggest both policy needs today, and the importance of continued data collection for tomorrow. Contingent and alternative workers continue to represent a substantial portion of the American workforce–larger than the manufacturing sector, as noted by Senator Warner. These workers are less likely than those in noncontingent arrangements to have access to health insurance and retirement, and are particularly less likely to access these benefits through an employer. Both Senator Warner and Senator Young voiced support for continued exploration of portable benefits systems to address the needs of these workers. “Portable benefits and the need for a new social contract in the 21st century…could be one of the areas where there is a possibility of bipartisan compromise,” Warner told the audience.

Since 2005, health insurance coverage rates increased among alternative workers, with the largest gains among those who did not access care through their employer. The Affordable Care Act (ACA), which expanded access to health coverage for millions of workers, likely played a large role. Portable benefits systems need to be designed in a way that updates the safety net, improves security, and pools risks for all workers across arrangements.

In order to design effective policy, we need consistent, comprehensive data on how the workforce is changing. Collecting this data takes resources. Senators Warner and Young both called for funding the 2017 CWS and voiced support for continued data collection. “Together we need to take a closer look at how data is collected and what we still don’t know about the independent workforce,” said Senator Young at the event.

For researchers

While the CWS numbers fill an important gap in knowledge, they also indicate the need for further research to address particular questions. Wednesday’s panelists shared some of these questions during their discussion. One missing piece of the puzzle is information on supplemental jobs, and how people combine income sources in order to make a living. Although some private surveys have shown that half of workers engaged in independent work do so on a supplemental basis, the government lacks a consistent measure of such work. Beyond a count of participants, questions remain about why people might be pursuing side hustles, what they tell us about the state of traditional work, and what impact they have on people’s incomes. Gaining an understanding of supplemental work is “extremely important,” Spletzer told audiences. Senator Warner has written a letter encouraging BLS to field the CWS annually with an additional focus on supplemental work.

Another area in need of further examination is how companies hire workers. We most often rely on data from individual workers when thinking about the nature of work in today’s economy, which can make it difficult to understand how hiring patterns fit into business practices and broader economic trends. Many have noted, for example, firms’ increasing reliance on subcontracted labor and coinciding deterioration of job quality, but existing measures rely on narrow definitions and workers’ own understandings of the corporate relationships behind their jobs. Eileen explained that “the domestic outsourcing, the subcontracting, the fissured economy… this, in my view, is where the big changes have taken place over the last 30 years.” She went on to note that these trends do not show up in the CWS data but have likely been a significant factor in depressing wage growth in recent decades.

A third area for researchers to pursue is the segmentation of the contingent workforce and the experiences of vulnerable populations. Independent and alternative workers are not a homogenous population. The recent CWS numbers, for example, show an increase in alternative arrangements among black and Hispanic workers since 2005. When BLS releases microdata later this month, researchers will have the opportunity to more deeply examine demographic differences. In addition, those who face the greatest challenges are least likely to be captured in the data, meaning we need to consider both how to better access these workers in future studies and how to make sure they are not further excluded by our conversations or policies. “We’re going to have to figure out other ways of estimating those who are living in the margins of the economy, and figure out what solutions we would like to invent for them,” Shah told the panel.

Key lessons learned

In addition to next steps for policymakers and researchers, Wednesday’s briefing provided important takeaways for everyone interested in the future of work.

For one, definitions matter. When we talk about how work is changing and when we look at particular numbers, it is essential to clarify what trends we are talking about. This is especially true when bringing together multiple data sources, many of which use different definitions and measures. Although the “gig economy” gets a lot of attention, the term is ambiguous and rarely defined in the media.

As a consequence of the various definitions used, the CWS, while being a rigorous measure of those working in particular types of arrangements for this main job, is not a measure of the “gig economy,” as Horrigan explained on Wednesday. “We have a particular vantage point in this survey that is probably a little different than what people think about when they talk about the gig,” he told the audience. Spletzer offered a similar comment about the CWS and the gig economy. “[The CWS] is the contingent workers in their main jobs. Those are two different definitions, two different concepts. This is important to keep in mind,” he said.

The Future of Work Initiative and Cornell University’s ILR School recently launched the Gig Economy Data Hub, an online resource that clarifies the complex landscape of different work arrangements and summarizes relevant data sources.

Another widely applicable lesson from Wednesday’s discussion about contingent and alternative work arrangements is that the future of work is uncertain, and depends largely on how we respond to new developments. As we continue to gain a more comprehensive understanding of the changes impacting our jobs and our economy, it is essential to stay informed and to think creatively about solutions to new and old problems affecting workers. Whether and how we expand the safety net to include all workers, Shah said, will be “a product of collective choices…The future of work will be determined by us.”

No matter what the future holds, Wednesday’s event reflected the importance of quality data and research. We look forward to the release of the CWS microdata later this month and questions about online platform work this fall, both of which will further improve understandings of the nature of work arrangements in today’s economy.