LBO News from Doug Henwood

Contingency: a follow-up

My post on contingent and “alternative” work (and the demographic follow-up) annoyed some people who think the Bureau of Labor Statistics, the source of the data, is missing the point through bad definitions and bad techniques. (As am I, for using it.) According to these critics, asking people whether they expect their jobs to last the year is using the wrong definition of contingency—though it’s not clear what the right one is, since most employed people in the U.S. can be fired for no reason at all at any time. Or the BLS was wrong to focus only on the primary job; plenty of people do gig work on the side to supplement their incomes, so the Bureau is—perhaps intentionally!—lowballing the numbers. Yes, though we don’t know how many such people there are (though we’ll know more when the BLS releases its data on “individuals who found short tasks or jobs through a mobile app or website and were paid through the same app or website” on September 30). But the side hustle is a different story from the canonical gig economy line, which is that we’re all day laborers now. Or, best criticism of all, the numbers are just wrong because they don’t comport with my correspondents’ experience. But you don’t know how representative your experience is, do you?

Here are some stats to address these counterclaims.

job tenure

The gig economy story is closely related to idea that the permanent job is a thing of the past—we all bounce from job to job now. That perception is not confirmed by the BLS’s job tenure numbers, which report the median number of years people have been in their current position. Here’s what it those look like like broken down by sex.

Job tenure

Median tenure has bounced around some but the lines are surprisingly trendless, given the chatter about increased volatility. Tenure overall barely changed between 1998 and 2016; it fell by about a year through 1980s and 1990s and rose since; it was about one month longer in 2016 than it was in 1983. That average does obscure some gender differences. Tenure for men fell by a year between 1983 and 1998, rose by half a year through 2014, and then fell a bit between then and 2016, to a level about eight months shorter than 1983. Tenure for women, however, has been rising fairly steadily; it rose about ten months between 1983 and 2016.

There’s not all that much change in tenure by age or industry either. For younger workers, those between 25 and 34, tenure fell by three to four months between 1983 and 2016, with not much variation in the intervening years. By industry, tenure rose by two years between 1983 and 2016 in construction, fell by a month or two in manufacturing, and has risen across most intervals in retail trade and finance. Tenure in government was up by nearly two years between 1983 and 2016. Of course 1983 was not 1963, the Golden Age before everything reportedly went haywire in the 1970s. But 1983 was very early in the neoliberal era, so we should expect to see more of a change than we have.

churn

Another counter to the job-churning story: turnover now is lower now than it was in the early 1990s. The monthly employment numbers—like “employers added 223,000 jobs in May”—are net figures, and are the difference between many gross job gains and losses. At current rates, that 223,000 figure probably results from something like 2.5 million gross gains, from new and existing employers, and 2.3 million losses, from shrinking firms or ones that go under. (We won’t know the actual numbers for many months yet—these are just guesses from recent trends.) Add the gross gains and losses together and you get figures on gross turnover—almost 5 million jobs come and go in a typical month lately.

Here’s what those gross numbers look like (translated into percentages of employment to make them comparable over time). All are down considerably from the 1990s. The trendline in the turnover graph heads steadily down; the r2 figure of 0.92 means that the trend alone explains 92% of the movement in the series. That’s not to say time is causing the downtrend; it is to say it’s very well-established.

BED gains, losses, turnover

part-time work

Another claim: we’re all juggling multiple part-time jobs, or working short hours because full-time employment isn’t available. There has been little change in the share of part-time employment in the total since the early 1980s. It was around 17% of the total in 1980, and is around 17% today. Part-time employment comes in two measures: noneconomic or voluntary (people who prefer part-time work), and economic or involuntary (people who want full-time work but can’t find it). Noneconomic is essentially trendless since 1975. Economic is highly cyclical, rising in recessions, and falling in expansions. It’s now at or below the lows of the late 1970s and late 1980s. It’s slightly above where it was in 2000, a serious boom year. (There were definitional and technical changes in the survey on which these numbers are based in 1994; they took the economic share down by 1.1. Instead of inferring whether part-time workers wanted full-time, as had been the case earlier, surveyors began explicitly asking if respondents want full-time work, a not-unfair question but one that yields smaller numbers. There have been no significant changes in the survey since then.)

part time

multiple jobs

Ok, maybe gig work isn’t the norm, but lots of people are doing it on the side, right? Maybe, but you’d have to find some fresh numbers to support that case. Here’s the share of multiple jobholders. It declined from 1998 through 2011 and has been flat since. Lately less than 5% of the employed have been working more than one job. We’ve only got 24 years of this data, so it’s hard to make generalizations about it, but it looks like multiple jobholding rises early in an expansion and falls later as the labor market tightens.

Multiple jobholders

temp work

There has been no uptrend in temp employment in almost 20 years. There was a sustained rise from when the stats on temporary help firms (then called “help supply” in BLS argot) begin 1982 through 1998, but the trend has been flat since. Temp employment fell sharply in the Great Recession, and somewhat less in the early-2000s downturn, and rose after both to the 2% neighborhood. Temp firms accounted for 2% of employment in May 2018, exactly what they did in October 1999.

Temp employment

self-employment

If a growing horde of us were 1099ers (disclosure alert: I’m one), then you might think the count of the self-employed would reflect it. But they’re not showing up in the BLS’s monthly employment numbers (which they compile by asking 60,000 people lots of questions every month). Self-employment has been declining as a share of the total for almost 70 years, with the exception of a mild rise in the 1970s and 1980s. Yes, this is also about people’s main job; there may be more freelancing to pick up extra cash. But these numbers offer no support for claims that the traditional job is disappearing.

Self-employment

As I said at the end of the first contingency post, none of this is to say that the world of work is pleasant or secure. Much of the population works hard and still can’t make ends meet. Except at the top, wages have been stagnant for decades and benefits are disappearing. But the stories of a new precarity are grossly overdone. You have to wonder that they gain salience because they’re written by academics and journalists, two fields where contingent employment seems more prominent than in other fields. But precarity has been the condition of the working class since the beginning of capitalism. That’s a major reason why it’s a bad system and should be replaced.

Contingency: almost every demographic is down

Someone on Twitter, reacting to my last post on contingent employment, wrote this:

“Contingent workers were more than twice as likely as noncontingent workers to be under age 25.” Profitable corporations are putting lots of young people in incredibly exploitative jobs and making it normal. For the young work is a new hell, and it’s not temporary.

Workers under the age of 25 are less likely to be contingent than they were 22 years ago. Here’s the detail by demographic group.

Contingent workers by demo

The share for workers in the 20–25 age group declined more than the average—especially women. The only groups to see an increase in share were teenage males and, barely, women aged 55–64.

This is not to say that young workers—or any workers except the professional/managerial elite—have a great thing going. But our critique should be about wages, benefits, working conditions, and our savage lack of a basic welfare state, not about “precarity.”

No it’s not a gig economy

Despite the voluble testimony of pundits and bar companions, the world of work is not one of Uber drivers and temp workers. In fact, the share of U.S. employment accounted for by contingent and “alternative” arrangements is lower now than it was in 2005 and 1995.

That testimony is derived from several original sources. For example, a much ballyhooed 2014 study commissioned by the Freelancers Union—which is not a materially disinterested party—reported that a third of workers are freelancers. The claim of a 2016 paper by Lawrence Katz and Alan Krueger that “all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements” was widely quoted and quickly became folk wisdom. That paper was based on an online survey conducted by the RAND Corporation The survey was small—fewer than 4,000 respondents—and its sample wasn’t very representative of the overall population, a flaw the authors corrected through vigorous statistical handiwork.

Data released this morning by the Bureau of Labor Statistics should put an end to this chatter. According to a special edition of their Current Population Survey, a monthly poll of 60,000 households conducted jointly with the Census Bureau, just 3.8% of workers were classed as contingent in May 2017, meaning they don’t expect their job to last a year. That’s down from 4.1% in 2005 and 4.9% in 1995. (Reports from the years before 2017 are here.) Tighter definitions show smaller shares, but also down from earlier years. In 2017, 96.2% of workers were noncontingent, compared with 95.1% 22 years earlier.

The share of workers in “alternative” arrangements was 10.1%. Of those, 6.9% were independent contractors, 1.7% were on-call, and 1.5% were employed by either temp or contract firms. That means that 89.9% of the workforce has a “traditional” job, down 0.2 point from 1995.

There’s less of a racial pattern to contingency than one might guess: 3.7% of white workers don’t expect their jobs to last, compared to 4.0% of black workers; 4.9% of Asian, and 5.1% of “Hispanic/Latino.” All these shares are down from 1995. Nor is there a vast gender disparity: 3.9% of women, vs. 3.8% of men are contingent.

And not all independent contractors are freelancers hanging on by a thread: 39% are in managerial or professional occupations, slightly less than their share of the overall workforce. These would include self-employed doctors or consultants. Reflecting that, independent contractors are more likely to be white and male than nonwhite non-men. Other forms of alternative arrangements show surprisingly little variation by race and gender; nonwhites are more likely to be temp workers, but there’s no gender gap at all. Almost all demographic groups show little change from 1995, and most of those changes are downward.

Of course, not all contingent workers are consultants or contract programmers. Full-time contingent workers earn 77% as much as noncontingent workers; contingent part-timers earn 89% as much as noncontingent part-timers.. Almost three-quarters—73%—have some kind of employer-provided health insurance, compared to 84% of noncontingents. All in all, 55% of contingent workers would like a traditional job.

“Alternative” workers are better off. Full-time independent contractors make 96% as much as noncontingent full-timers; contract workers (heavily used in tech) make 22% more. Temp workers—0.9% of the workforce—are much worse off, however, making 41% less than the traditionally employed. About three-quarters of independent contractors have employer-provided health insurance, but only two-thirds of temp workers do.

None of this is to argue that the world of work is a delight. But we should be clear about what the problems are. Precarity isn’t the major problem in the American labor market. It’s that wages are stagnant or worse, benefits are eroding, and much labor is dull, alienating, pointless, and sometimes dangerous. Many people with normal, full-time jobs have a hard time making ends meet, and most households have little or no savings to fall back on in a crisis. Emphasizing precarity only makes workers feel even more powerless than they are.

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June 7, 2018 Adam Gaffney (see link for articles) on how to get prescription drug prices down • Barry Eichengreen, author of The Populist Temptation, on the nationalist/xenophobic turn (Trump, Brexit, etc.), and on the future of the U.S. dollar

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May 31, 2018 Kali Akuno of Cooperation Jackson on why black Americans should resist gun control • Sabri Oncu on Turkey—the currency panic, the political and economic troubles

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May 24, 2018 Richard Walker, author of Pictures of a Gone City, on what the tech boom has done to the Bay Area

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May 17, 2018 Carol Graham (papers here, here, and here) on failing health and declining prospects among poor white people • Kristen Ghodsee, co-author of this article, on the vile uses of anti-communism

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May 10, 2018 Christy Thornton on AMLO and Mexico’s July elections • Richard Florida on the spatial dimensions of inequality

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May 3, 2018 Alejandro Velasco on Venezuela • Jessica Blatt, author of Race and the Making of American Political Science, on the racist origins of the discipline

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April 26, 2018 Corey Pein, author of Live Work Work Work Die, on the dark side of the Silicon Valley • an anonymous sex worker on the legal dangers of SESTA/FOSTA

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April 19, 2018 Kate Doyle Griffiths on teachers’ strikes and the crisis in social reproduction • Thea Riofrancos and Daniel Denvir on Yascha Mounck and liberal derangement syndrome

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April 5, 2018 Sean Jacobs, founder of Africa Is A Country, on Winnie Mandela’s legacy • Forrest Hylton on Colombian politics in the run-up to May’s presidential election

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March 29, 2018 Sean Guillory, host of the Sean’s Russia Blog Podcast, on Putin and Russophobia • Alex Vitale, author of The End of Policing, on school shootings and what (not) to do about them (and why it’s bad to label school shooters as terrorists)

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March 22, 2018 Jennifer Berkshire, host of Have You Heard?, on teachers’ strikes, WV and beyond • Stan Collender on fiscal follies in DC

The wit and wisdom of Larry Kudlow

News that Larry Kudlow will become Trump’s top economic advisor reminded me of my experience with him when we were Left vs. Right guests on a WNYC-TV show in the early 1990s. WNYC’s studios were then in the Municipal Building in lower Manhattan. A producer met us in the lobby to take us upstairs, and proudly noted that the building had just been renovated. Larry’s response: “They should have just let it fall down.”

In an effort to democratize the form, WNYC had placed remote cameras in a few dwellings around the city, so citizens could ask questions and make comments to the guests. Larry had unsurprisingly spent much of the show mourning the passing of Reaganomics and prescribing it as the cure for all our ills. One of the remote questioners was a black man in East New York (a Brooklyn neighborhood that was then and still is one of the poorest in the city). He told Larry that they didn’t see any of that Reagan magic in his neighborhood. Larry dismissed his testimony, saying “the Reagan years were a Golden Age of black entrepreneurship.”

When it was all over and the cameras were turned off, Larry asked us “Where the hell is East New York?”