Washington, We Have a Problem

Confusing new government data is leading people to believe there are only 11.9 million Americans earning income as independent contractors.

Last month, the U.S. Bureau of Labor Statistics released a bunch of data about independent contractors. The news release included this breakdown (bold emphasis mine):

“In addition to contingent workers, the survey also identified workers in four alternative work arrangements on their sole or main jobs. In July 2023, there were 11.9 million people who were independent contractors (7.4 percent of total employment), 2.8 million on-call workers (1.7 percent of total employment), 945,000 temporary help agency workers (0.6 percent of total employment), and 862,000 workers provided by contract firms (0.5 percent of total employment).”

That bold line led to people messaging me in ANGRY ALL CAPS. Some called me and yelled.

There was also a fair bit of cursing.

A significant amount of concern immediately swirled, with worries that the 11.9 million figure might be used against independent contractors when it comes to future policymaking all across the country.

The problem is that the figure 11.9 million is significantly lower than figures the government has previously stated about the number of independent contractors in the United States. Those figures, in turn, have been significantly lower than figures we’ve all seen released year after year by numerous other researchers.

Several experts were quick to point out that with this new data, the U.S. Bureau of Labor Statistics may have accurately counted what the government set out to count—by asking questions in its own wonky way—but the result is absolutely going to confuse a lot of people.

Liya Palagashvili, an economist with the Mercatus Center who has done in-depth research about independent-contractor policymaking and who is a member of the Data Users Advisory Committee for the Bureau of Labor Statistics, wrote:

“This is understating the true size of the independent workforce since it’s only reporting on workers who use independent work as their primary source of income. The size of the independent workforce likely ranges from 11.9 million on the low end to 65 million on the high end.”

After reading Palagashvili’s piece, I spoke with her to make sure I understood her take on the numbers. Her opinion was in line with what I learned after reaching out to another smart woman, Camille Olson. She’s a partner at Seyfarth who serves on the law firm's National Labor and Employment Law Steering Committee, and who fights to protect independent contractors through the Coalition for Workforce Innovation.

Olson also told me the 11.9 million figure quite simply fails to capture the true size of the independent workforce.

Even more confusing about this new data—especially given how the terms “gig work” and “Uber” tend to show up in every news article about independent-contractor policymaking—is that the data doesn’t even include app-based work at all, according to Palagashvili.

She says the U.S. Bureau of Labor Statistics intends to publish additional estimates about app-based work separately in the coming months.

Yeah. Really.

All of this can be so confusing that Palagashvili added a warning in her analysis of the new data:

“Readers should be aware that CWS data is frequently misunderstood by the media, with many mistakenly equating independent contracting or alternative work arrangements with modern app-based gig work, such as ridesharing and delivery. However, app-based gig work represents less than 10% of independent contracting…”

What an unbelievable nightmare of numbers for anyone trying to speak or write about independent-contractor policymaking.

The figures themselves may be defensible within the government’s own bureaucrat-speak for trying to define all the various ways that people earn a buck, but with this new data, the Bureau of Labor Statistics has done a bang-up job of just one thing.

Creating confusion.

This Much, We Know is True

Even despite all of those challenges, there is one figure in the Bureau of Labor Statistics data that lines up perfectly with what has been reported for years, from numerous sources:

“As in prior surveys, independent contractors overwhelmingly preferred their work arrangement (80.3 percent), whereas 8.3 percent would prefer a traditional work arrangement.”

Little has changed there, based on research going back at least a decade now. The figure about people liking self-employment tends to hover in the range of 70% to 85%, no matter which industry is involved.

In fact, yet another study came out just this week, this one specific to DoorDash drivers. More than 70% of drivers said they wanted to remain independent contractors, a figure that increased to 86% with the option of receiving certain benefits.

What’s crystal clear is that the vast majority of independent contractors in hundreds of industries wish to remain self-employed—and we say so in all kinds of studies and surveys. We routinely describe preferring the scheduling flexibility, the better physical and mental health, the ability to escape traditional workplace sexism and ageism, and a host of other reasons.

As far as the new U.S. Bureau of Labor Statistics Data is concerned, the 80.3 percent figure is arguably the most important to the whole independent-contractor policy debate. Government trying to restrict or outlaw our freedom to choose self-employment quite simply goes against the will of the people.

It would be ideal if we had similar clarity with the rest of the data about independent contractors. After all, if we’re going to have public policy that respects us and protects us, then the data about us needs to be as accurate and easy to understand as the lived reality we all keep describing.

As Olson told me:

“Sound policy is built on a bedrock of accurate data, and sound conclusions that flow from that data and other sources of information. If the data is flawed, as I believe the BLS data is, it cannot support sound policymaking.”

She’s right.

Even if the new data is technically correct based on slivers of the independent workforce that the government was trying to measure, it’s flawed in how it’s being presented, and it’s creating a whole lot of confusion.

That is no way to support sound policymaking about independent contractors, or much of anything else.