There are probably more gig workers than counted in U.S. survey: observers

The share of American workers in the “gig economy” has shrunk since 2005, according to a government report that some data-watchers cautioned omits key parts of the picture.

The Labor Department this week said that 10.1 per cent of American employees in May 2017 were on alternative work arrangements — which includes independent contractors, on-call workers and people working for third-party contractors — down from the 10.7 per cent in the last report in 2005. That decline resulted mainly from a drop in the share of people identifying as independent contractors, which fell to 6.9 per cent from 7.4 per cent in 2005.

The decline surprised some economists who expected a greater share for alternative work arrangements given the growth of ridesharing services such as Uber and freelance labour connectors like TaskRabbit. The 2005 survey was taken before widespread use of smartphones, and before many of these startups were founded. The Labor Department asked similar questions as in 2005 in order to have comparable data.

One explanation is that the government survey excluded those working one or more alternative jobs in addition to their main position. The count also potentially overlooked independent contractors who use a phone application or an intermediary website to find work: The survey asked if the respondent worked in a job where they “obtain customers on their own to provide a product or service” — a question that might exclude those who use an app like Uber.

“It’s about the definition — the definition here is a bit myopic, it’s a bit old,” said Michael Affronti, vice-president of product at Fuze, a provider of communications services that ran its own survey of about 6,600 people on the marketplace for alternative labour. Affronti said a gig worker should be defined as anyone who works outside of a large company and who uses their skills and services — encompassing freelancers, those with a gig on the side in addition to full-time work, and those using apps to find customers.

Another estimate of alternative workers as a share of employment came in at 15.8 per cent in late 2015, according to a 2016 paper by Harvard University ’s Lawrence Katz and Alan Krueger of Princeton University, based on their own survey. Those using online intermediaries made up only 0.5 per cent of workers.

Katz said he was “surprised by the lack of any growth — and actual decline in the share of independent contractors.”

“Some of this is just a stronger economy,” he said by phone. “When an economy is strong, people are choosing to move into more traditional work arrangements. ”

The government’s data did show some revealing shifts. Americans age 55 and older constituted bigger shares of independent contractors in 2017 than in 2005. That suggests that aging baby boomers are accepting such positions, whether it be to supplement incomes or because they may be easier to take than traditional jobs. The labourforce participation rate among people 65 and older stood at 19.8 per cent last month, compared with 15.2 per cent in May 2005.

More than one-third of independent contractors were age 55 or older in May 2017, while the age group accounted for less than a quarter of workers in traditional arrangements, according to the report. “This reflects the fact that the likelihood of employed persons being independent contractors increases with age,” the Labor Department said.

One more caveat surrounding the figures: Previous versions of the survey were conducted in February, rather than in May, which could influence the types of jobs available at different times of the year.