The U.S. Bureau of Labor Statistics (BLS) caused quite a stir yesterday with the release of their 2017 Contingent and Alternative Employment Arrangement (CWS) survey results.
Specifically, the report shows that the share of U.S. gig/contract 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. For example, a recent Federal Reserve study found 31% of adult Americans engage in alternative (independent) work.
So what’s going on?
As we’ve mentioned before when reviewing gig economy studies, different studies use different gig economy definitions. This leads to very different results. This is true for this study.
The BLS has a narrow definition of contingent and alternative work.
For example:
- The CWS only includes people whose sole or main 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 independent contractor definition only 3 in 5 of those who are self-employed (solopreneurs) 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.
There are other differences that result in the CWS having lower numbers than most other surveys. But these two reasons explain most of the differences.
We ran the BLS's definitions against the dataset from the 2017 MBO Partners State of Independence (SOI) survey (which was done the month before the CWS survey). Adjusted for the BLS’s definitions, we came up with roughly similar numbers as the BLS.
So again, this shows the differences are more about differing definitions than anything else.
We've long held that independent work is not going to replace traditional jobs as most people's primary source of income anytime in the foreseeable future. So, in that sense, we agree with the BLS.
But because of their narrow definition, in our view 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. For example, we've already had people tell us there's no need for new gig work related legislation because the CWS says the sector is small and isn't growing.
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.
Economist Robert Solow once said "you can see the computer age everywhere but in the productivity statistics". Eventually, government statistics showed computers add to productivity. And eventually statistics will catch up to the reality of independent work.
We'll have more on CWS in the near future.