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Contingents paid less, GAO report says; treat data with caution warns Labor Department

May 21, 2015

Contingent workers are paid 10.6% less per hour than standard workers, are more likely to be younger, Hispanic and have no high school degree, according to a report published by the US Government Accountability Office on Wednesday.

“We found that compared to standard full-time workers, ‘core contingent workers’ are more likely to be younger, Hispanic, have no high school degree and have low family income,” according to the report.

“These contingent workers are also more likely than standard workers to experience job instability, and to be less satisfied with their benefits and employment arrangements than standard full-time workers,” it said. “Because contingent work can be unstable, or may afford fewer worker protections depending on a worker’s particular employment arrangement, it tends to lead to lower earnings, fewer benefits and a greater reliance on public assistance than standard work.”

Core contingents may also be at greater risk of injury, the report said.

The US Department of Labor, in its response to a draft of the report, noted the need to be cautious with the data sources used.

“Lack of clarity in the available data and inconsistent definitions of contingent work make nuanced analysis difficult,” according to the response. “As you point out, the Contingent Worker and Alternative Work Arrangement supplement administered by the Bureau of Labor Statistics was last conducted in 2005, and many of the other data sources, such as the General Social Survey, are less suited to the purpose of tracking nonstandard work arrangements.”

In its report, the GAO estimated the “core contingents” represented 7.9% of the employed US labor force in 2010. However, the report noted definitions of the contingent labor force can vary. Contingents can represent less than 5% of the labor force under some definitions and more than a third under other definitions.

“In general, contingent work is a term associated with those individuals who have temporary employment,” according to the report. “In its broadest definitions, however, contingent work also refers to all individuals who maintain work arrangements without traditional employers or regular, full-time schedules — regardless of how long their jobs may last. Because the various definitions include different types of workers, a profile of the contingent workforce can vary.”

But the report says no clear consensus exists as to whether contingent workers should include independent contractors, self-employed workers and standard part-time workers — many of whom have long-term employment stability.

“There is more agreement that workers who lack job security and those with work schedules that are variable, unpredictable, or both — such as agency temps, direct-hire temps, on-call workers and day laborers — should be included,” according to the report. “We refer to this group as the ‘core contingent’” workforce.”