Mark Van Scyoc/Shutterstock.com
The latest compensation data from the US Labor Department’s Bureau of Labor Statistics show that total compensation for US employees has increased modestly over the past year, from $35.28 per hour worked in June 2017 to $36.22 per hour worked in June 2018. Wages and salaries averaged $24.72 per hour worked and accounted for 68.3 percent of these costs, while benefits averaged $11.50 and accounted for 31.7 percent. For private sector employees, compensation has increased from $33.26 per hour worked to $34.19. Wages made up $23.78 or 69.6 percent of that figure, while the remaining $10.41 (30.4 percent) consisted of benefit costs, in which the BLS includes supplemental pay.
While the percentage ratio of wages to benefits was unchanged from June 2017, benefit costs grew at a slightly higher rate than wages year-over-year, nearly 3 percent compared to 2.7 percent. This reflects a nearly 12 percent increase in bonuses and other forms of supplemental pay, from $1.18 per hour to $1.32; supplemental pay made up 3.8 percent of the total compensation mix in June 2018, compared to 3.5 percent a year earlier. Paid leave, including vacation time, also increased slightly.
Taking a longer-term view, over the past five years, benefit costs for private-sector employees have increased by over 20 percent, from $8.64 per hour worked in June 2013; whereas wages and salaries have increased 16 percent, from $20.47 that month. Supplemental pay, by comparison, has increased 65 percent from 80¢ per hour worked in June 2013. This trajectory reflects the increasing tendency we’ve observed among employers in recent years toward variable pay schemes that reward employees for high performance with one-time bonuses rather than standard annual raises.
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.