Another Day, Another 73 Cents? Nonstandard Jobs Offer More of Less
About 35 million Americans now hold “nonstandard” jobs--part-timers, independent contractors, temp workers, the self-employed--and represent a distinct, and disadvantaged, class within the U.S. work force, according to a new wage and benefit analysis.
Not surprisingly, these workers earn lower wages than full-time employees holding regular jobs, and they are less likely to have health insurance and pension coverage, the Washington-based Economic Policy Institute concludes in a pair of reports issued today for the Labor Day weekend.
But more remarkably, the study found that the economic penalties also apply among managers and professionals, the most highly educated workers with the most prestigious jobs. Members of this elite group who work part time also experience lower wages and lesser benefits.
“Typically all types of nonstandard jobs are inferior to regular full-time work,” said the EPI, a liberal research group whose founders include former Clinton administration Labor Secretary Robert B. Reich.
Although previous studies have documented the growth of the part-time work force, the EPI review is perhaps the most detailed analysis to date of wages and benefits received by different categories of nonstandard workers in comparison to traditional, full-time employees.
Growing Share of Labor Force
There has been a gradual increase in the share of the labor force operating outside the traditional pattern of work: 40-hour weeks in year-round jobs, complete with health insurance and pension plans.
Arguments continue to rage among economists, executives and employees about whether this trend harms workers or instead represents for many a voluntary trade-off of security for freedom and flexibility.
The question was hotly debated during the recent Teamsters strike against United Parcel Service, where part-timers earned $9 an hour, compared with $20 for full-time workers. Under the settlement, UPS has agreed to raise part-time wage rates and promote 20,000 part-timers to full-time status.
Throughout the economy, the vast majority of part-timers, typically defined as those who work less than 35 hours a week, have chosen that status voluntarily, according to regular surveys by the federal Bureau of Labor Statistics.
Last year, 77% of part-timers said they voluntarily chose that type of work for “noneconomic” reasons, such as students combining work with school, parents who want to spend more time at home with their children, and retirees who want to make some extra money.
“The reasons can change for an individual over the course of time,” said Tom Nardone, chief of labor force statistics at the BLS.
The changing nature of the U.S. work force tends to reflect the personal choices of individuals more than the dictates of business, said Patrick J. Cleary, vice president for human resources at the National Assn. of Manufacturers.
“People have found all sorts of different work arrangements,” he said. “They work at home, they work through computers and the Internet, they have flex-time and job sharing. They want more time off with their families.”
‘Leave People Alone’ to Work Out Work
In an economy with unemployment below 5%, the lowest jobless rate in more than two decades, “it is hard to make the case that people cannot find full-time work,” Cleary said. His recommendation is to “leave people alone” to work out their own work arrangements.
But the EPI study views the world very differently, emphasizing the economic difficulties of workers without a steady job.
Many of those working part time or for temporary-help agencies “are women who have family responsibilities. They can’t take a full-time job,” said Edith Rasell, an economist and co-author of the EPI study.
“The question is, because I am a mother and want to spend time with my kids, should I be penalized if I go into the work force?” Rasell asked. “Should I get paid less than someone with the same skills?”
The study calls for federal policies to “improve job quality and provide greater workplace protection for these workers.” They include making it illegal to have pay differentials based on full-time versus part-time status, assuring benefits for part-time workers, making child care more affordable and available, and expanding medical- and family-leave policies.
The EPI study analyzes government data from a special 1995 survey of workers in nonstandard jobs. The categories include part-timers, temps, the self-employed, day laborers, on-call workers (such as substitute teachers), independent contractors and workers for contract companies (such as building janitorial services).
The kinds of business employing large numbers of workers in nonstandard arrangements include construction, retail trade, entertainment, recreation and agriculture.
Typical nonstandard job titles include cashier, bookkeeper, elementary school teacher, nurse’s aide, food manager, guard, janitor, child care worker, house cleaner, truck driver, real estate sales agent, systems analyst, sales supervisor and manager-administrator.
Part-Time Wages Less Than Full-Time Pay
The average hourly wage for all American workers in 1995, the period of the study, was $13.41, or $15.05 an hour for men and $11.52 for women, according to the EPI study.
Part-timers received an average of $9.74 an hour, or $9.52 for women and $10.38 for men. That is about 73% of the average full-time wage. The lowest-paid category of nonstandard workers was day laborers, with an average wage of $6.24 an hour, or $4.99 for women and $6.96 for men.
Best-paid among workers in nonstandard jobs were independent contractors, who enjoyed wages of $16.40 an hour, with $14.53 for women and $17.28 for men.
“As for fringe benefits, a much smaller share of men and women nonstandard workers of all types receive health insurance or pensions,” the study said.
Among full-time workers, about 80% of both men and women receive either health insurance or pension plan coverage, it said. Among nonstandard workers, only 23% of women and 16% of men have either benefit.
The reports document a general trend of modest growth in nonstandard work as the economy has changed in recent decades, most notably with the large increase of women participating in the labor force.
The percentage of part-timers among all U.S. workers has risen from 16.6% in 1973 to 18.4% in 1995. (It actually declined from a peak of 18.8% in 1993, reflecting the robust economy. In good times, more people are able to get full-time jobs.)
The share of the work force supplied by temporary help agencies was 0.5% in 1979, when the government began keeping records. It had grown to 1.9% in 1995.
More Self-Employed Workers Now
The number of entrepreneurs also has expanded: The self-employed accounted for 6.7% of the American work force in 1973, rising to 7.3% in 1995.
The EPI study, conducted in conjunction with the Women’s Research and Education Institute, uses statistical analysis to identify the specific economic losses associated with nonstandard work.
It compares wages received by full-timers with those paid to nonstandard workers within the same industry and occupation. The average wage gap is 5% for women and 10% for men, the study concludes.
One of two companion reports reviews part-time and nonstandard work among professionals such as teachers, registered nurses, accountants, auditors, computer system analysts “and various types of managers.”
Business use of nonstandard workers “is no longer limited to the stereotypical clerical temp, but now encompasses highly skilled occupations such as engineering, computer programming, accounting, law and other white-collar professions,” the study said.
Just as with workers of lesser education and job skills, part-time managers fall behind in wages compared with their colleagues who work 40 hours a week. The average wage for all managers is $17.75 an hour, or $20.14 for men and $14.66 for women. Among part-timers, it drops to $13.68 an hour, with $12.36 for men and $13.98 for women.
Professionals earn an average of $18.45 an hour, or $20.41 for men and $16.72 for women. When professionals work part-time, average wages drop to $16.97 an hour, or $17.58 for men and $16.76 for women, the study said.
Nearly 90% of full-time professionals and managers enjoy either health insurance or pension programs. The figure drops to less than 50% for workers in nonstandard jobs.
The study concludes on a discouraging note: Nonstandard jobs, “while helpful for expanding the options of some workers, rarely offer effective strategies for most of those hoping to resolve the competing demands of work and family.”
