Last week, the U.S. Bureau of Labor Statistics (BLS) issued a survey (the 2017 Contingent and Alternative Employment Arrangement (CWS) survey) that seems to contradict everything you’ve heard about the growth of the gig economy and independent contract workers. Rather than findings like the recent Federal Reserve study that estimates 31 percent of adult Americans engage in alternative (or independent) work, the BLS reported that only ten percent do. So what gives? To find out, we turned to Steve King, a partner in Emergent Research and a regular contributor to SmallBusiness.com,
Against a mountain of research with different findings, the U.S. Bureau of Labor Statistics claims that the flexible working arrangements that go by various terms (on-demand, contingent, alternative, sharing, gig, independent, solo, etc.) Specifically, the report shows that the share of independent workers in the U.S. workforce was slightly smaller than they reported the last time the survey was done, which was 13 years ago.
They also found that only about 10.1% of Americans engage in alternative (independent) work. This, of course, is much lower than what pretty much every other survey or study done on the gig economy over the past 5 years has found.
So what’s going on?
When reviewing gig economy studies, different studies use different economy definitions. This leads to very different results. This is true for this study.
The Bureau of Labor Statistics uses a too narrow definition of alternative work arrangements
- The CWS survey only includes people whose sole or primary job is independent. This excludes the millions of people who do gig work as moonlighters or as a second job.
- The CWS also excludes, because of their definition of an independent contractor, independent workers who aren’t in the services industry. So, for example, independent workers who have an Etsy or Amazon store, or any kind of product-based business are excluded – even if it’s their primary source of income.
According to the technical note in their release, because of their definition of independent contractor, only three in five of those who are self-employed are included in their number. This means they exclude about 4-5 million people who are included in almost all other surveys on independent work.
In one way, we agree with the BLS. That’s because we’ve long held that independent work is not going to replace traditional jobs as most people’s primary source of income.
But because of their narrow definition, we believe their survey understates the size, scope and growth of independent work. And by only asking about primary jobs, the CWS fails to address a major economic issue, which is why so many Americans are turning to 2nd jobs and alternative sources of income. Our biggest concern is the CWS results will lead many to conclude work, jobs and the workforce are not changing.
The Need for BLS regular and broader research on alternative work
Like others (see this article by Aspen Institute or this article by Samaschool) we urge Congress to provide the BLS the funds to conduct regular and broader research on this topic. We also recommend those interested in the gig economy/alternative work visit Aspen’s Gig Economy Hub and review the other studies on the gig economy.
Thanks to | Steve King, SmallBizLabs.com