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October 1996, Vol. 119, No. 10
Workers in alternative employment arrangements
Sharon R. Cohany
M ost workers are employees of the same organization for which they carry out their assignments. Most also have an established schedule for reporting to work. There always have been exceptions, however. In recent years, a perception has emerged that the number of exceptions is growing, that employment is more frequently being arranged by intermediaries, and that work schedules are becoming less standardized. In order to obtain information on workers employment arrangements, a special survey was conducted for the Bureau of Labor Statistics as a supplement to the February 1995 Current Population Survey (CPS).1 This article discusses the survey findings on four groups of workers considered to be in "alternative" arrangements: independent contractors, temporary help agency workers, employees of contract companies, and on-call workers.
Approximately 12 million persons, or 10 percent of the work force, fell into at least one of the four categories.2 (See exhibit 1.) The largest was independent contractors, with 8.3 million, followed by on-call workers (2 million), temporary help agency workers (1.2 million), and contract company employees (650,000). As this article will detail, workers in these arrangements differed sharply from one another. For example, temporary help agency workers tended to be young women who were dissatisfied with their work arrangement, while independent contractors were likely to be middle-aged and older men who were very satisfied with their work.
Another major focus of the 1995 survey was the measurement of contingent workers, defined as workers who have no implicit or explicit contract for ongoing employment.3 Other articles in this issue discuss aspects of contingent workers in detail. It is important to note that the classification of workers in alternative arrangements was made separately from that of contingent workers. Workers in alternative arrangements were contingent only if they met the criteria for contingency. For instance, some contract company employees may have perceived their job as temporary and consequently were classified as contingent workers; on the other hand, many of the workers in contract companies had an expectation of ongoing employment and were not classified as contingent. Moreover, some contingent workers jobs fell into one of the alternative arrangements, but in fact, most contingent workers were in regularly scheduled jobs that did not involve intermediaries.
In the next four sections, each alternative work arrangement will be discussed in some detail, including the 1995 demographics of the workers, the characteristics of the jobs they held, and the extent to which their jobs were contingent. Companion articles in this issue by Anne E. Polivka, Steven Hipple, and Jay Stewart discuss data from the CPS concerning earnings and benefits of workers in alternative arrangements, as well as employment and earnings characteristics of contingent workers; Donna Rothstein uses data from the National Longitudinal Survey to examine aspects of workers in nonstandard employment arrangements.
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1 The CPS, the major source of information on employment and unemployment, is a sample survey conducted monthly for the Bureau of Labor Statistics by the Bureau of the Census. The sample consisted of 56,000 households in February 1995. A combination of in-person and telephone interviews is used; the respondent can be any knowledgeable member of the household aged 15 or older. Periodically, supplementary questions are added to the basic CPS questionnaire to elicit information on selected characteristics of workers. In February 1995, the first supplement on contingent and alternative work arrangements was conducted. All employed persons, except unpaid family workers (a very small group numerically), were included in the supplement. For persons holding more than one job, the questions referred to the characteristics of their main job (the one at which they worked the most hours). Because this was a one-time survey, it was not possible to assess the effect of seasonal variation on the estimates of alternative arrangements or to determine whether such arrangements have become more common.
2 Information from the 1995 survey was released initially as Contingent and Alternative Work Arrangements, Report 900 (Bureau of Labor Statistics, August 1995). An additional analysis of these and other data on job security appeared in Report on the American Workforce (U.S. Department of Labor, 1995), chapter 1.
3 See Anne E. Polivkas article on pages 39, this issue, which presents three estimates of contingency based in part on actual and expected job tenure. For the theoretical underpinnings of the concept of contingency, see Anne E. Polivka and Thomas Nardone, "On the definition of contingent work, " Monthly Labor Review, December 1989, pp. 916.
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