America’s Nonstandard Workforce Faces Wage, Benefit Penalties, According to U.S. Data

Black and Latinx Workers Overrepresented in Nonstandard Work with Lowest Job Quality—Temporary Help Agency Work

“Nonstandard” workers typically are paid less and receive fewer benefits than their counterparts in “standard” jobs, according to topline survey results released today by the U.S. Bureau of Labor Statistics. Results from the 2017 Contingent Worker Supplement (CWS) to the Current Population Survey reveal that 1 in 10 U.S. workers (15.5 million) finds her primary job in a “nonstandard”—i.e., subcontracted, temporary, on-call, on-demand, or freelance—work arrangement.

Survey results show a shift in the occupational distribution—toward more dangerous occupations—within certain nonstandard arrangements, since 2005. Wage and benefit penalties, overrepresentation of people of color and women, and preference for a different work arrangement are particularly striking for temporary help agency workers.

“Improving conditions for nonstandard workers is key to combatting the erosion of labor standards, rising income and wealth inequality, structural racism and occupational segregation, and the shift of power away from workers and toward corporations,” said Maya Pinto, senior researcher and policy analyst with the National Employment Law Project.

“The use and misuse of nonstandard work arrangements—the subcontracting and ‘temping out’ of work, the practice of just-in-time scheduling, and the reliance on independent contractors, some of whom are misclassified as such—shifts economic risk away from employers and onto workers, whose livelihoods become more acutely subject to the vagaries of markets,” added Pinto.

“Too often today, people are in jobs that do not pay them enough to live on, and nonstandard work arrangements have only exacerbated this issue—most strikingly for workers of color, who are overrepresented in low-paying, dead-end jobs,” said Congresswoman Rosa DeLauro (CT). “Our nation’s worker protection laws have not kept up with structural changes to direct employment that often result in the excessive use of temporary workers and contracting out, often in dangerous occupations. Congress needs to step up to ensure workers have adequate protections, increased wages, and the right to collectively bargain. We cannot bend to corporate powers trying to evade labor laws to pay workers less and skimp on benefits that provide people with healthcare and a secure retirement.”

“The continuing shift of contracted workers outsourced through temporary help agencies into production and materials moving jobs has far-reaching implications for all of America’s workers,” said Dennis Williams, president of the United Auto Workers. “These sorts of nonstandard work arrangements create even higher barriers for workers to organize, negotiate good contracts, and share in the wealth they help create. They threaten to drive down standards across the board, even in industries that once enjoyed high wages.”

Key findings from the 2017 CWS include the following:

  • 10.1 percent of workers are engaged in nonstandard work. There are approximately 15.5 million nonstandard workers in the U.S., up from 14.8 million in 2005.
  • Occupational distribution within nonstandard arrangements has shifted since 2005. The share of independent contractors in service occupations rose from 13.7 percent in 2005 to 18.1 percent in 2017. The share of independent contractors in transportation and material moving occupations rose from 3.9 percent to 5.0 percent. For temporary help agency workers, the data show a shift from office and clerical work to much more dangerous production and transportation occupations (with higher than average workplace injury and fatality rates).
  • Many nonstandard workers experience wage penalties relative to their counterparts in standard work arrangements. Full-time median weekly wages of independent contractors, on-call workers, and temporary help agency workers are lower than those of their counterparts in standard work arrangements. Full-time temporary help agency workers earn 41 percent less than do workers in standard work arrangements. According to the Bureau of Labor Statistics, earnings differences between workers in nonstandard and standard work are partly reflective of occupational distribution. Forthcoming CWS microdata will allow for a side-by-side comparison of wages and benefits of standard and nonstandard workers within occupations and industries.
  • Nonstandard workers experience large benefit penalties relative to their counterparts in standard work arrangements. 53.4 percent of workers in standard arrangements receive an employer-provided health insurance benefit, compared to only 12.8 percent of temporary help agency worker, 28.2 percent of on-call workers, and 41.3 percent of workers provided by contract firms. And while 46.3 percent of workers in standard arrangements are covered by an employer-provided pension plan, only 6.6 percent of temporary help agency workers, 30.1 percent of on-call workers, and 38.3 percent of workers provided by contract firms enjoy the same coverage.
  • Black and Latinx workers are overrepresented in nonstandard work with the lowest job quality—temporary help agency work. While black workers comprise 12.1 percent of the overall workforce, they comprise 25.9 percent of temporary help agency workers; Latinx workers are 16.6 percent of all workers, but 25.4 percent of temporary help agency workers. The share of temporary help agency workers identifying as non-white increased by 10 percent between 2005 and 2017.
  • Almost half—46 percent—of temporary help agency workers would prefer a traditional work arrangement.
  • 9 million workers—3.8 percent of workers—do not expect their jobs to last beyond a year.

Yet-to-be-released CWS microdata will enable more detailed analyses of nonstandard work characteristics and trends. In addition, still forthcoming is long-awaited data on online-platform-based on-demand work, collected for the first time via the 2017 CWS; the data will shed important new light on job quality for so-called platform gig workers.

Improving Conditions for Temporary Help Agency Workers

Dozens of countries across six continents have passed policies regulating temporary agency work. Policies include wage and benefit parity standards, bans on temporary work in dangerous industries like construction, bans on temporary workers performing certain high-safety-risk tasks, restrictions on when companies can hire temporary workers (e.g., standing in for absent workers), and caps on the share of the workforce that can be temporary and the duration for which a job can be deemed temporary.

Here in the United States, in the face of federal inaction, states and localities are leading the charge to increase protections for nonstandard workers and raise standards for temporary help agency workers.

Illinois recently, on June 1, 2018, implemented groundbreaking legislation regulating temporary help agencies. The Responsible Job Creation Act represents the most ambitious attempt to date by any state to regulate the growing temporary help agency industry. It fills critical enforcement loopholes, addressing workplace safety issues, hiring discrimination, wage theft, and “perma-temping” in the temporary help industry. “The Act won broad support from both Democrats and Republicans, who heard the voices of workers demanding the creation of good jobs, not temp ones,” said Tim Bell, executive director of the Chicago Workers Collaborative. “Lawmakers are fed up with an influx of jobs that pay poverty wages and contribute to greater economic insecurity. This new law calls on the job creators to partner with workers in bringing healthy economic growth to Illinois.”

In New Jersey, New Labor has been working to raise standards for temporary help agency workers, many of whom work in the state’s numerous warehousing and distribution facilities. “Temp workers in New Jersey may suffer wage theft, not receive health and safety training, be disrespected or verbally abused, sent to work in overcapacity vans, or sent to ‘jobs for men’ or ‘jobs for women’,” said Louis Kimmel, executive director of New Labor. “Now is the time for their voices to be heard. They are tired of finger-pointing between temp agencies and the major corporations that use them, and they demand responsibility for the conditions in the industry. If we don’t do it, who will?”

In California, where a serious workplace injury at Tesla left a contracted worker with a broken jaw, and a lawsuit has alleged that temporary employees were not paid for all the hours they worked, the United Auto Workers are organizing both staffing workers and direct-hire workers at a Tesla factory in Fremont. “Health and safety is another area where employers offload traditional responsibilities by using temp workers. Temp workers are much more likely to be injured than permanent workers because of inadequate training and supervision, and often get more dangerous work assignments than permanent employees,” said Douglas Parker, executive director of Worksafe. “Once injured, a temp worker usually lacks the benefits and job security of a permanent worker, increasing the likelihood of a serious injury leading to financial calamity for the worker’s family.”

Often, use of contingent employment structures are prevalent in large, profitable businesses, such as the supply chains of large retailers in Southern California. “We have seen an increase in the number of major goods movement companies employing a majority of their workforce through staffing agencies, and all of their truck drivers as independent contractors,” said Sheheryar Kaoosji, co-executive director of the Warehouse Worker Resource Center, a non-profit organization in Southern California.

In Tennessee, the International Brotherhood of Teamsters has mounted an organizing campaign at an XPO Logistics facility that employs hundreds of temporary agency workers. The campaign follows the death of a temporary agency worker denied medical treatment and a complaint filed with the Equal Opportunity Commission alleging widespread sexual harassment by supervisors. “XPO’s practice of employing contract workers creates an environment ripe for gender discrimination, sexual harassment, and incredibly unsafe work conditions. Low-wage and nonstandard workers are typically subjected to the most egregious forms of abusive and discriminatory workplace treatment. These corporations should be accountable to put an end to this abusive treatment,” said Elizabeth Chen, senior staff attorney with A Better Balance, who is representing an XPO worker in her sexual harassment claims.

About the CWS

The Contingent Worker Supplement to the Current Population Survey—a survey of approximately 60,000 U.S. households and the primary source of labor force statistics in the United States—has been fielded a total of six times, in 1995, 1997, 1999, 2001, 2005, and 2017. The 2017 CWS accompanied the May 2017 Current Population Survey. The CWS provides the most comprehensive and statistically robust data available on nonstandard workers in the United States.

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