Contingent Workforce: Size, Characteristics, Earnings, and Benefits

What GAO Found

The size of the contingent workforce as a proportion of the total U.S. employed labor force can range widely, depending on how it is defined. Narrower definitions generally focus on employment that is temporary, and can result in estimates of less than 5 percent. Broader definitions include various employment arrangements, such as on-call, part-time, and self-employment, among others, and can result in estimates of more than a third of the labor force. Analyzing a defined core contingent workforce, including agency temps and on-call workers, GAO estimated that this group comprised about 7.9 percent of the employed labor force in 2010.

The characteristics and employment experiences of contingent workers differ from those of standard full-time workers in a number of ways. GAO’s analysis found that core contingent workers are more likely to have no high school degree and have low family income. 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. For example, GAO estimated that core contingent workers were more than three times as likely as standard full-time workers to report being laid off in the previous year. Evaluating workplace safety for contingent workers is challenging due to a lack of worker injury data that track injuries by job type. However, other research has found that some contingent workers, particularly agency temps, may be at increased risk of injury. According to Department of Labor officials, this increased risk occurs for a variety of reasons, including because agency temps often are not provided adequate safety training or equipment.

Earnings, benefits, and measures of poverty of contingent workers also differ from those of standard full-time workers. Contingent work can be unstable, or may afford fewer worker protections than standard work, depending on a worker’s particular employment arrangement. As a result, contingent work tends to lead to lower earnings, fewer benefits (such as retirement plans and health insurance), and a greater reliance on public assistance. Accounting for other factors that affect earnings, contingent workers earn less than standard workers on an hourly, weekly, and annual basis. GAO found that contingent workers earn about 10.6 percent less per hour than standard workers. Differences in earnings vary by industry and occupation. For example, contingent workers in the education industry earned significantly less annually, weekly, and hourly than similar standard workers, while in the construction industry only the difference in annual earnings was statistically significant. GAO also found that contingent workers are about two-thirds less likely than standard workers to have a work-provided retirement plan and less than half as likely to have work-provided health insurance.

Millions of workers do not have standard work arrangements—permanent jobs with a traditional employer-employee relationship. Rather, they are in temporary or other non-standard employment arrangements where they may not receive retirement and health benefits, or safeguards such as job-protected leave under the Family Medical Leave Act, even if they have a traditional employer-employee relationship. These non-standard arrangements are sometimes referred to as “contingent” work. To collect information about contingent workers, the Department of Labor’s Bureau of Labor Statistics has previously augmented the labor force data included in its monthly Current Population Survey with the Contingent Work Supplement. While a comprehensive source of data on contingent workers, the bureau has not conducted this supplement since 2005.

In the aftermath of the recent recession (2007-2009), more workers may have become contingent workers with potentially limited access to work-provided benefits as well as coverage under key workforce protection laws. In light of these developments, GAO was asked to examine issues related to the contingent workforce. This report examines what is known about (1) the size of the contingent workforce, (2) the characteristics and employment experiences of contingent versus standard workers, and (3) any differences in earnings, benefits, and measures of poverty between contingent and standard workers.

GAO analyzed data on contingent workers identified in various national survey data sources, including, among others, the Contingent Work Supplement and the General Social Survey administered by NORC at the University of Chicago. GAO compared population counts both over time and based on differing definitions, and examined distributions of self-reported worker and job characteristics, including demographics, family income, job security, benefits, and safety. GAO conducted regression analyses using Current Population Survey data to determine how contingent workers differ from others across various measures, including earnings and retirement plan participation. GAO also analyzed health insurance coverage and measures of poverty. GAO researched relevant laws; reviewed studies on contingent work; and interviewed agency officials from the Department of Labor, the Census Bureau, officials from organizations representing workers and employers, and other subject matter experts.

For more information, contact Charles Jeszeck at 202-512-7215 or jeszeckc@gao.gov.