Freelancers Ask Government to Count Independent Workers

Posted by: John Tozzi on August 18, 2011

This is a guest post by Bloomberg Businessweek reporter Victoria Stilwell.

The number of so-called contingent workers hasn’t been measured since 2005, when the Bureau of Labor Statistics last calculated the population. And now that the bureau has requested funding to resume the headcount, the Freelancers Union advocacy group is calling for changes in the way these workers are labeled and how their contribution to the U.S. economy is measured.

In a new policy paper, Freelancers Union argues that the government is “ignoring a crucial, and growing, segment of the economy that is transforming the U.S. workforce.”

The BLS’s contingent work supplement was discontinued six years ago due to lack of funding. That year, contingent workers, which the BLS defines as laborers who consider their jobs temporary, made up about 4 percent of total employment.

But Sara Horowitz, founder of the Brooklyn, N.Y.-based Freelancers Union, says the BLS figures don’t accurately represent the many types of workers outside of permanent, full-time employees. She says the survey should be reinstated with a broader definition of what a contingent worker is, what the Freelancers Union calls an “independent worker.” By this definition, independent workers constitute at least 30 percent of the workforce, based on a 2006 report from the Government Accountability Office. The GAO included the following categories of workers:


  • self-employed workers

  • temps

  • contract workers

  • day laborers

  • on-call workers

  • part-time workers

“What I find so profoundly unsettling is that the number one issue that human beings are having in America right now is the lack of work,” says Horowitz, whose union boasts almost 160,000 members. “And to not have a clue about how people are really working, and that this isn’t a huge focus — why isn’t the Department of Labor making this front and center?”

The debate hinges on the lack of legal protection afforded to contingent workers, such as unemployment insurance, minimum wage and overtime protections, and anti-discrimination laws, according to the GAO report. Furthermore, these workers are less likely to have access to the health insurance or pension benefits that traditional full-time workers have.

Tom Nardone, assistant commissioner for current employment analysis at the BLS, says the bureau funded the supplement for each odd numbered year beginning in 1995 until money ran out in 2005. He says there have been other proposals to have the supplement re-funded, but Congress didn’t pass them. The BLS has requested to reinstate the supplement in President Barack Obama’s 2012 budget submitted in February, though Congress has yet to act on it.

Nardone says BLS data has been interpreted in different ways to get the higher numbers that the GAO and the Freelancers Union report. He says that while the bureau doesn’t have a monopoly on the definition of contingent, some of the categories that other groups like the union are adding don’t “square” with the concept of contingency. For example, the broader measure counts all part-time workers alongside full-time business owners who work for themselves.

“Someone could have a restaurant and be self-employed,” Nardone said. “Do you want to count that person as a contingent employee because they don’t have an employer? It’s not for us to say that’s incorrect, but the onus is on them to make sure they’re being transparent in terms of what they’re doing.”

Horowitz argues that the term “contingent” is outdated and should no longer be used to describe workers. If the supplement is reinstated, she says people should be categorized as independent based on their work, not whether they think of themselves as business owners.

“It shouldn’t matter what your mental state is,” Horowitz said. “It should matter what your action is. You should be asking questions that are: What are you doing now? How are you filing your taxes? How many hours do you want to be working, and how many hours are you working?”

Reader Comments

Gary Petty

August 19, 2011 11:57 AM

The term "contingent worker" is not outdated and is outside the category of independant worker. The two should be separated not combined. Contingent workforce is a huge employment and business segment which provides workers that in large part buffer companies needs for manpower. Adecco, Manpower, Volt, Kelly Services, adn Xpeerant are just a few of the providers of contingent workforce. Contingent workforce is used in large part to buffer the peeks and valleys in manpower requirements.

To claim the term "contingent worker" is outdated is a very narrow view of the workforce.

Regards,
Gary Petty
President, Xpeerant Inc.

Saul

August 23, 2011 1:07 AM

Employment and business is constantly changing. Just as the current economy has led many businesses to cut back and consider other options to save money, such as outsourcing,it has also led many people to redefine employment and become "independent". This needs to be taken into consideration if they want an accurate reports unemployment, business, and specific markets.

http://www.slideshare.net/Marlabs

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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