Understanding the Changing Nature of Work

Nov212016

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U.S. Census Bureau Graphic on Number of Employer and Nonemployer Business Establishments:  2005--2014
U.S. Census Bureau Graphic on Number of Employer and Nonemployer Business Establishments: 2005--2014

Guest blog post by Jim Spletzer, Principal Economist, Center for Economic Studies, U.S. Census Bureau

Recent advances in technology have changed how workers and employers interact in the 21st century labor market.  Companies such as Uber, TaskRabbit, Airbnb, and others are cited as examples of new non-traditional modes of employment and income generation. 

Although the press has been full of stories premised on the idea that the share of U.S. jobs without a formal employer-employee relationship is large and growing, available survey data seem at odds with this perception.  Individuals engaged in these non-traditional forms of work should be classified as self-employed, yet the percentage of the workforce that is self-employed as reported in household surveys (such as the Current Population Survey) has instead been drifting downwards since at least the mid-1990s.  In contrast, administrative data derived from tax filings, such as the nonemployer statistics published by the Census Bureau, provide stronger support for the popular perception that self-employment is a growing phenomenon over the last several decades.

The Census Bureau continually strives for the best measurement of our dynamic economy, and is actively engaged in new survey efforts and research projects intended to increase the accuracy and relevance of how we measure employment and earnings.  One strength of the Census Bureau, above and beyond the surveys we conduct, is our use of administrative records.  Administrative records are defined as person-level or firm-level data collected for non-statistical purposes such as tax collection.  The Census Bureau is committed to handling data responsibly and protecting the confidentiality of the data we hold.  The Census Bureau is developing linked survey and administrative data that contains information on the characteristics of individual workers together with information on the sources of their earnings.  Research using these linked data sets will provide a more complete picture of individuals’ work activities, including both wage and salary employment and self-employment, than would be possible using a single source.

The Census Bureau is starting research to understand what are commonly referred to as “1099 workers.”  IRS form 1099 records nonemployee compensation, which is payment for services performed by independent contractors who are not employees of the business.  The goals of this research are to answer questions about whether 1099 workers are exclusively self employed, whether they use this self-employment income to supplement earnings from traditional employer jobs, and how many nontraditional “gig” jobs these individuals hold in a given year.  The Census Bureau has recently obtained authorization from the IRS to receive 1099 data for the purpose of improving surveys with administrative data.

Finally, the Federal Statistical system has two exciting initiatives to measure nontraditional types of employment.  First, the Census Bureau has recently started to conduct the Annual Survey of Entrepreneurs (ASE), which is a survey of approximately 290,000 employer firms (and roughly 47% of these firms are less than 10 years old).  The 2015 Annual Survey of Entrepreneurs includes questions on types of workers, such as full time, part time, and contractors, independent contractors, or outside consultants, as well as questions regarding the types of tasks performed by each type of worker. 

Second, the Bureau of Labor Statistics will include the Contingent Worker Supplement (CWS) in the May 2017 CPS.  This supplement was last fielded in 2005.  The questions it contains will provide information on the characteristics of workers in contingent jobs, which are defined as jobs that are structured to last only a limited period of time. The Contingent Worker Supplement will also provide information about workers in several alternative employment arrangements, including independent contractors, on-call workers, temporary help agency workers, and workers provided by contract companies.  The Bureau of Labor Statistics is proposing to add four new questions to the end of the Contingent Worker Supplement, which will explore whether individuals obtain customers or online tasks through companies that electronically match them, often through mobile apps, and examine whether work obtained through electronic matching platforms is a source of secondary earnings. 

Both the Census Bureau’s Annual Survey of Entrepreneurs and the Bureau of Labor Statistics’ Contingent Worker Supplement will expand our understanding of the changing nature of work.

This blog is a part of a monthly series highlighting the contributions of the Commerce Department’s agencies to the Open for Business Agenda. This month’s focus is on Skills for Business.

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Last updated: 2016-12-09 11:08

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