BLS Releases New Data on US ‘Gig Economy’—But Is It Reliable?

BLS Releases New Data on US ‘Gig Economy’—But Is It Reliable?

The US Bureau of Labor Statistics published new data on Thursday, for the first time since 2005, on the size of the country’s “contingent workforce”—defined as “persons who do not expect their jobs to last or who report that their jobs are temporary,” as well as those employed in “alternative work arrangements.” The data in the new report is from May 2017, at which time the bureau says 5.9 million US workers (or 3.8 percent of the overall workforce) were employed in contingent jobs:

Using three different measures, contingent workers accounted for 1.3 percent to 3.8 percent of total employment in May 2017. … In February 2005, the last time the survey was conducted, all three measures were higher, ranging from 1.8 percent to 4.1 percent of employment. In addition to contingent workers, the survey also identified workers who have various alternative work arrangements. In May 2017, there were 10.6 million independent contractors (6.9 percent of total employment), 2.6 million on-call workers (1.7 percent of total employment), 1.4 million temporary help agency workers (0.9 percent of total employment), and 933,000 workers provided by contract firms (0.6 percent of total employment).

Wednesday’s data release does not address the size of the “gig economy,” per se. The BLS added new questions to the new version of its Contingent Worker Supplement to identify individuals who found and were paid for gig work through a mobile app or website, but says it is still evaluating that data and will address it in a later release. Surveys over the past few years have produced widely divergent counts of America’s gig economy, estimating the “gig workforce” at anywhere from 600,000 to 54 million people. Much of this discrepancy has to do with how gig economy is defined: Freelancers, who Upwork and the Freelancers Union predict could be a majority of the US workforce in as little as 10 years, are sometimes included in this definition, other times not.

In any case, the BLS’s finding that the contingent workforce represented a smaller share of the workforce in 2017 than in 2005 is raising eyebrows, given that much independent research has found the gig economy to be growing.

Research published in late 2016 by economists Alan Krueger and Lawrence Katz found that from 2005 to 2015, almost all of the new jobs created in the US economy were not traditional full-time jobs but rather temporary, contract, or gig work. The business and financial software company Intuit estimated last May, when the BLS survey was conducted, that the gig economy accounted for 34 percent of the American workforce, and that this number would increase to 43 percent by 2020.

That’s why Stephane Kasriel, CEO of the freelance hiring platform Upwork, considers the BLS’s data inadequate, as he describes in a post at Fast Company:

For starters, the government’s research samples the rapidly evolving freelance workforce only at wide intervals. Aside from one study in 2001 and another in 2005, every other public report from the Bureau of Labor Statistics is from the 1980s and ’90s. Contingent workers just don’t seem to be top of mind for federal researchers. Second, the latest study’s findings are already more than a year old now. As the analyst Mary Meeker points out in her annual Internet Trends report, released last week, work is changing rapidly, with technology driving high growth in on-demand jobs. Any changes that might have occurred in roughly the past 12 to 15 months aren’t likely captured in the CWS report.

But perhaps most worrying is that its methodology probably undercounts the size of the freelance economy. In designing this year’s survey, BLS researchers used benchmarking terms like “primary job,” a concept that doesn’t always reflect how people approach and perform various kinds of independent work anymore. It’s shortsighted to use an outmoded measure just because it makes for a handy comparison with historical data; worse, it may not give researchers the insight they’ll need to design better future studies.