Government Will Try To Figure Out How Many Americans Are Now Part Of The “On-Demand” Workforce

How many Americans are making money from “on-demand” jobs — like being an Uber driver, selling stuff on Etsy, or renting out a room on Airbnb — that either didn’t exist until a few years ago or have exploded in popularity thanks to technological innovations? No one really knows, with various reports putting it at anywhere from 5% of the workforce to more than a third. So, for the first time in more than a decade, the U.S. Department of Labor will try to get a more accurate headcount on so-called “contingent” workers.

Yesterday, Labor Secretary Tom Perez announced that the Bureau of Labor Statistics will be working with the Census Bureau to produce a “Contingent Worker Supplement” to an upcoming Current Population Survey.

The last time that the federal government collected this sort of data was 2005, when the contingent workforce was still comprised largely of self-employed independent contractors.

At the time, you’d see freelance copywriters and designers using agencies to get work, or hairstylists renting out chairs in salons, but these people didn’t work for those agencies or those salons.

With the rise of the tech-powered gig economy, that line between employer and freelancer has become even blurrier. Your Uber or Lyft driver is not an employee (though some are trying to change that) of either company, but is just a person with a car who uses these ridesharing platforms to make a living. Likewise, homesharing services like Airbnb have allowed people to become semi-pro hoteliers/landlords (though they don’t always follow the rules for those traditional businesses).

As a result of these innovations and cultural changes, many more Americans are at least supplementing their income through contingent work.

“This is an exciting, entrepreneurial development that is tapping into powerful consumer demand while giving workers flexibility and enabling them to monetize existing assets,” writes Perez. “At the same time, the on-demand economy raises important questions about how to continue upholding time-honored labor standards and how to promote economic security for American workers in a changing labor market.”

In addition to the technological changes that have enabled new gig-based economies, many large businesses have tried to cut staffing costs by labeling certain workers as contractors, meaning they receive fewer benefits but may face the same requirements as employees.

For example, a number of delivery drivers for Amazon’s Prime Now service say that they are being treated like employees — told when to work, what to wear, which deliveries to make in which order — but are being miscategorized as contingent workers. A growing number of exotic dancers from around the country have made similar claims about their dubious “independent contractor” status.

Last July, the Dept. of Labor issued guidance to U.S. businesses in the hopes of preventing them from misclassifying workers as “contractors” when they should be considered employees.

Between a worker-side shift toward more flexible contingent work, and the push by companies to unburden themselves of hefty staffing costs, Secretary Perez says there’s a need to get a bead on how large this workforce is.

“It’s important that my team and I understand these trends so we can make good decisions going forward,” he explains, adding that “understanding emerging trends is only possible if we can systematically measure them.”

The announcement was applauded by Sara Horowitz, founder and executive director of the Freelancers Union.

“It’s great to see that the Department of Labor is going to take a real look at the growing independent labor force,” says Horowitz. “These Americans are pioneering a new approach to work and life, one that doesn’t neatly fit into our current 2-category system, and now is the perfect time to explore all the ways they are making a living through the gig economy.”

The new workforce data will be include in the May 2017 Current Population Survey, so mark your calendars now!

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.