By Sara Horowitz
The opinions expressed are her own.
The national employment figures are an economic bellwether. They profoundly affect U.S. markets, consumer spending, and even the fate of national elections. With so much at stake, you’d think we would be counting the workforce accurately. Unfortunately, we’re not.
The United States treats jobs as something turned on or off—employed or unemployed—but that binary view no longer reflects how Americans really work. Whereas in the middle of the 20th century industrial employees worked one job for one company, today, there are 42 million consultants, independent contractors, entrepreneurs and freelancers working multiple gigs for multiple clients.
Although independent workers were a full one-third of the U.S. workforce at last count (which was 6 years ago), they aren’t counted by the Bureau of Labor Statistics in a consistent and ongoing way. Current statistics tend to lump workers into one of three classes: private wage and salary workers, government workers, and the self-employed. But these groupings don’t account for the nuances in how people work now and the overlap between groups. For example, on-call or contract workers might be lumped in with wage and salary workers, when really they’re independent workers. As a result, our outdated numbers have led to outdated policies that no longer meet the needs of America’s 21st century workforce.
Take, for example, the issue of nonpayment. W-2 employees know that their paycheck will be directly deposited into their checking account every two weeks, and don’t have to worry about chasing down their employer for payment. In fact, the Department of Labor could fine your employer—or send them to jail—if they don’t pay you. Independent workers, however, have no such protection from nonpayment, late payment, or partial payment, leaving freelancers with only two options: sue or walk away. According to Freelancers Union member survey data, that’s a gamble many companies are willing to make: 77% of freelancers report having trouble collecting payment at some point in their career.
In a way, we’re going back to the future. When the U.S. economy began to shift from farms to factories in the mid- to late-nineteenth century, the state of the nascent workforce was largely unknown: there was no national unemployment rate, consumer price index, or average household income. In 1884, President Chester Arthur signed a bill creating the Bureau of Labor Statistics. The BLS produced numbers, and policies soon followed, including many we take for granted today: the eight-hour workday, child labor bans, and unpaid wage claims.