Woman delivering a package
Every month we anticipate and react to the U.S. Jobs Report, which purports to measure job growth and unemployment in the United States. Yet, we rarely question the report's relevance in a labor market that has changed significantly in the 100-plus years since its inception.
In fact, the most interesting thing about the latest government Jobs Report, released on May 6 is not the 3.6% unemployment rate or the 428,000 jobs added in April, but rather the millions of workers not represented in these figures that contribute greatly to the health of our economy.
I’m talking specifically about independent or “flexible” workers. It is past time for this growing segment of the labor force to be represented in the regularly reported job figures that businesses and government agencies rely on to make key employment decisions.
The absence of freelancers, gig workers and shift workers
The Bureau of Labor Statistics’ Establishment Survey, which captures payroll data for hourly and salaried workers across approximately 140,000 businesses, is the primary source of data for estimating total jobs and job growth. Missing from the survey’s numbers are a growing number of independent freelancers, gig workers and flexible shift workers (i.e.1099 contractors vs W2 full time personnel).
So just how large is that population of workers? One survey estimates that 67 million people - nearly one-third of the total labor force - worked as freelancers in 2021. Another survey by the Pew Research Institute estimates 9% of the total U.S. adult population have “earned money through an online gig platform in the past 12 months.”
In his recent State of the Union Address on March 1, President Biden even addressed the unionization rights of gig workers, a historic nod to this growing segment of workers. In short: these people are a major part of the labor force and can no longer be ignored in U.S. Jobs Report statistics.
Flexible work fulfills a variety of economic needs
Job reports are meant to provide greater insight into worker needs and preferences; therefore, the absence of flexible workers means there’s a big gap in the story. What limited data we have on flexible workers shows that there is a lot of variance in the types of people that choose gig work and in the reasons they have for doing so.
One survey found that 31% of current or recent gig workers said it was their primary job, while two-thirds reported gig work as a side job. Thirty-nine percent reported that the income they earned from gig work was “nice to have,” while roughly 60% describe their gig income as “essential” or “important.” Outside of income, a significant portion of workers cited greater “control over their schedules” and “wanting to be their own boss” as key reasons for joining the flexible workforce, while others did it simply “for fun.”
There is still much to be learned about these workers, but it is clear that many of the nuances and employment-related challenges they face are not being measured in existing labor statistics.
Employer solutions to labor shortages not recognized
Regardless, one trend has become evident from the last several Jobs Reports: a record number of hourly jobs remain vacant with a reported 11.5 million unfilled positions as of March. To address this labor gap, employers will be challenged to rethink job design and training outside of part- or full-time employment. Jobs may need to become more narrow and flexible to attract some workers, and more predictable to entice others. Employers will also need to revamp their scheduling practices, and learn to incorporate the large number of workers currently available on virtual marketplaces for flexible work.
While employers continue to weigh the pros and cons of employing flexible workers, there is no denying this labor market trend is here to stay. The rapid proliferation of new technology is continuing to make shift work easier for both employers and workers. Capturing this growing segment of the workforce in recurring labor reports is an important first step to understanding their impact and optimizing employment around the needs of both workers and job creators.
