46 Monthly Labor Review October 1996

Alternative ArrangementsCompensation Alternative ArrangementsCompensation

Earnings and benefits of workers

in alternative work arrangements

Workers in alternative work arrangements

were generally less likely to receive health insurance

or pension coverage from their employers, but many earned

higher wages than workers in traditional arrangements

Steven Hipple

and

Jay Stewart

Steven Hipple is an

economist in the

Office of Employment

and Unemployment

Statistics and Jay

Stewart is a research

economist in the

Office of Employment

Research and Program

Development, both in

the Bureau of Labor

Statistics.

Approximately 1 of 10 workers was employed in an alternative work arrangement, according to data from the February

1995 Contingent Worker/Alternative Work Arrangement Supplement to the Current Population

Survey (CPS). Alternative work arrangements

include working through a temporary help agency,

working for a contract company, working on-call,

and working as an independent contractor.

It has been argued that some alternative work

arrangements have come about through companies’ efforts to reduce costs. Firms often find it

cheaper to contract out for services such as security and payroll than to perform these functions inhouse. In addition, the use of temporary help agencies can reduce costs by allowing firms to expand

production during periods of increased demand

without having to hire permanent workers or incur

the costs of firing unneeded workers. Having a pool

of on-call workers available serves the same purpose. By hiring independent contractors, firms can

gain access to workers with highly specialized skills

on an as-needed basis.

Have these developments been detrimental to

workers? Not necessarily, if these arrangements allow workers to better direct their talents to where

they are most highly valued, they may actually be

better off. This article compares the earnings and

benefits of workers in these alternative work arrangements with those of workers in traditional arrangements.

Earnings

The earnings of workers in alternative work

arrangements relative to those in traditional

arrangements vary significantly. Workers employed by temporary help agencies and those

who are on call earned less than workers in

traditional arrangements, while contract company workers and independent contractors

earned more. (See table 1.) Some of the dif-ference

between the various alternative ar-rangements

can be attributed to the occupational make-up of

each arrangement. For instance, people

employed by temporary help agencies were more

likely to work in administrative support or laborer

occupations which tend to pay lower wages. In

contrast, independent con-tractors were more

likely to work in higher paying managerial and

professional specialty occupations.

Of the four alternative work arrangements, persons employed by temporary help agencies

earned the least. Overall, full-time temporary help

workers earned 60 percent of the traditional worker

wage. Men who worked for temporary help agencies earned 51 percent as much as men in traditional work arrangements, while women earned

72 percent as much. Younger temporary help

workers earned a larger percentage of traditional

worker earnings than did their older counterparts.

Interestingly, among temporary help workers,

women out-earned men.

Although earnings of temporary help workers

generally increased with educational attainment,

temporary help workers earned more, relative to traditional workers, at lower education levels. Temporary help workers tend to work in lower paying occupations; about three-fifths of them hold administrative support and operator, fabricator, and laborer

jobs.
Monthly Labor Review October 1996 47

Median weekly earnings of full-time wage and salary workers with alternative and traditional work arrangements

by selected characteristics, February 1995

Temporar y Workers Workers with

help agency provided by traditional

workers contract firms arrangements

Total, 16 years and older ................................... $290 $512 $386 $518 $480

16 to 19 years ....................................................... (1) (1) (1) (1) 236

20 to 24 years ....................................................... 276 (1) 259 327 305

25 years and older ................................................ 299 557 424 524 507

25 to 34 years ................................................... 287 508 389 497 453

35 to 44 years ................................................... 319 607 457 536 522

45 to 54 years ................................................... 323 (1) 505 592 595

55 to 64 years ................................................... 258 (1) (1) 583 506

65 years and older ............................................ (1) (1) (1) 493 381

Men ...................................................................... 277 562 433 590 543

Women ................................................................. 297 399 267 361 410

Race and Hispanic origin

White .................................................................... 298 530 416 527 498

Black ..................................................................... 261 476 280 375 364

Hispanic origin ...................................................... 237 268 281 370

Educational attainment

Less than a high school diploma .......................... 246 (1) 290 360 299

High school graduates, no college ....................... 261 384 376 482 405

Some college, no degree ..................................... 297 519 349 499 450

Associate degree .................................................. (1) (1) 672 473 564

College graduates ................................................ 414 715 411 668 733

Table 1.

Full-time employees of contract companies earned more

($512—median weekly earnings), in general, than workers in

traditional arrangements ($480—median weekly earnings).

Women who work for contract companies earned slightly less

than women in traditional arrangements, while men earned

more. (Unfortunately, it is not possible to say much more than

this, because the sample sizes in many of the cells are too

small for analysis.)

On-call workers who worked full time as well as those who

worked part time earned about 80 percent of what similar workers in traditional arrangements earned. On-call workers were

much more likely than those in traditional arrangements to

work part time, however. Men working on-call earned more

relative to traditional workers than did women. By age, on-call

workers earned about 25 percent of what traditional workers

earned. This reflects the higher proportion of on-call workers

who are younger.

Among full-time on-call workers, those with an associate

degree fared the best, and even out-earned those with college

degrees (a large share of whom are substitute teachers). As one

might expect, weekly earnings of high school dropouts who

work on-call were the lowest, although their earnings were very

close to the earnings of high school dropouts in traditional

arrangements.

Overall, independent contractors earned more than workers

in traditional arrangements. However, female independent contractors earned less than workers in traditional arrangements;

for men (who dominate the group numerically), the reverse was

true. In nearly every age group, independent contractors earned

more than traditional workers, with older workers having the

greatest difference. Independent contractors without a postsecondary degree earned more than their traditional counterparts, while those with a degree earned less.

Health insurance coverage

Overall, workers in traditional arrangements were more likely

than those in alternative arrangements to have health insurance, although there was wide variation in coverage among

alternative work arrangements.1 Workers employed by temporary help companies had the lowest rate of health insurAge and sex

1Data not shown where base is less than 75,000.

NOTE: Workers with traditional arrangements are those who do not fall

343

Independent

contractors

On-call

Characteristic workers

ance coverage from all sources (45 percent), while indepeninto any of the “alternative arrangement” categories.
48 Monthly Labor Review October 1996

Alternative ArrangementsCompensation

Percent of employed temporary help agency workers with health insurance and pension coverage, by selected

characteristics, February 1995

With health insurance coverage With pension coverage

Eligible for

employerprovided

health

Age and sex

Total, 16 years and older ....... 1,181 44.9 5.7 0.8 22.6 2.5 7.0

16 to 24 years ........................... 295 36.6 5.1 .3 23.7 2.4 9.5

25 years and older .................... 886 47.6 5.9 1.0 22.2 2.6 6.1

25 to 34 years ....................... 403 41.2 6.9 18.9 2.0 4.7

35 to 44 years ....................... 251 46.6 3.6 2.0 25.1 2.0 7.2

45 to 54 years ....................... 143 60.8 7.7 2.8 29.4 4.2 8.4

55 years and older ................ 89 58.4 16.9 4.5 5.6

Men .......................................... 557 38.8 3.6 .4 19.7 3.1 6.1

Women ..................................... 624 50.3 7.5 1.3 25.2 2.1 7.7

Race and Hispanic origin

White ........................................ 859 50.8 6.6 .7 26.0 3.3 9.4

Black ......................................... 257 30.7 3.5 1.6 12.5 .4 .4

Hispanic origin .......................... 134 17.9 (1) (1) 9.0 3.7 3.7

Full- and part-time status

Full-time workers ...................... 927 45.3 7.1 1.1 26.0 2.9 7.8

Part-time workers ..................... 254 43.7 .4 (1) 10.2 1.2 3.9

Educational attainment

Less than a high school

diploma ................................. 173 15.6 1.2 (1) 16.2 1.1 1.1

High school graduates,

no college ............................. 384 42.4 3.1 .3 20.3 1.6 4.9

Some college, no degree ......... 270 46.7 6.7 1.5 20.0 2.9 7.7

Associate degree ...................... 77 61.0 7.8 (1) 28.6 3.9 13.0

College graduates .................... 216 61.1 13.4 2.3 29.2 4.9 12.1

Selected occupation

Executive, administrative,

and managerial ..................... 77 59.7 3.9 5.2 27.3 (1) 9.1

Professional specialty ............... 98 69.4 15.3 1.0 41.8 8.2 18.4

Administrative support,

including clerical ................... 355 50.7 3.4 1.1 22.5 2.3 8.5

Service occupations ................. 106 44.3 4.7 (1) 10.4 (1) (1)

Operators, fabricators,

and laborers .......................... 392 30.1 2.0 .3 18.6 2.0 2.6

Selected industry

Manufacturing ........................... 230 43.5 2.6 1.7 20.4 3.0 10.9

Services .................................... 789 47.3 6.3 .6 22.9 1.8 5.7

Total

(1)

Table 2.

Total

(in

thousands)

Total

Through

other

job or union

(1)

(1)

1Less than 0.05 percent.

NOTE: Workers with traditional arrangements are those who do not fall into

any of the “alternative arrangement” categories. Detail for the above race and

Hispanic-origin groups will not sum to totals because data for the “other races”

group are not presented and Hispanics are included in both the white and black

population groups. Data for full- and part-time workers will not sum to totals

because usual status on the principal job is not identifiable for a small number

of multiple jobholders.

insurance

Eligible for

employerprovided

pension

Through

current

employer

at main job

Characteristic
Monthly Labor Review October 1996 49

 Of workers employed by temporary help companies, 6

percent received their health insurance from their employer,

while 23 percent said they were eligible for coverage. Although workers employed by temporary help companies were

not likely to have employee-provided health insurance, more

than two-fifths had coverage from any source, implying that

many of these workers were receiving coverage from a family

member or some other nonemployment-related source. (See

table 2.)

Compared with temporary help workers, contract workers

were more likely to receive or be eligible for health insurance

from their employer. They also were more likely to accept coverage from their employer, when it was offered. Slightly more

than two-fifths of contract workers received health insurance

from their employer, while nearly three-fifths were offered coverage. (See table 3.) Unlike temporary help workers, a relatively large fraction (7 percent) of contract workers received

health insurance through a union or other job. A large proportion of contract workers—70 percent—had health insurance

coverage from some source. Contract company workers in

service occupations were much less likely to have health insurance than were those in other occupations. In fact, excluding those employed in service occupations, the health insurance coverage rate for contract workers would be about 78

percent, which is very close to the coverage rate for traditional workers.

On-call workers were 1-1/2 times more likely than

temporary help company workers to have coverage, and were

about 3 times as likely to obtain coverage from their employer. In comparison to temporary help workers, a slightly

higher proportion of on-call workers (27 percent) were offered

employer-provided health insurance. (See table 4.) About

two-thirds of on-call workers had health insurance from some

source. Older on-call workers were more likely to be covered

overall, although they were less likely to receive coverage

from their employer. The proportion of on-call workers with

health insurance ranged from 28 percent among those in

farming, forestry, and fishing occupations to 76 percent

among those in administrative support occupations.

As stated previously, independent contractors had the

highest proportion of workers with health insurance among

workers in alternative employment arrangements. Given that

most independent contractors are self-employed, it is not

surprising that they were much more likely than workers in

traditional arrangements to receive health insurance from a

nonemployment-related source. (See tables 5 and 6.) Out of

all independent contractors, 69 percent received health insurance from a source not related to their employment. Of

this total, 31 percent said they purchased their own health

insurance, 27 percent obtained coverage through a family

member, and 11 percent received health insurance from some

other source. In contrast, 22 percent of traditional workers

received coverage through a nonemployment-related source.

Because very few independent contractors received employer-provided health insurance, most of the variation in

health insurance coverage was attributable to differences in

coverage from nonemployment sources.

In general, workers with higher levels of education were

more likely to have health insurance, and also were more likely

to be offered, or obtain, coverage from their employer. Among

workers in alternative arrangements, those arrangements that

had a disproportionate share of workers with more education

tended to have higher rates of coverage. For example, independent contractors (41 percent) and contract company workers (35 percent) had the largest proportions of workers with

an associate or college degree. Workers in these arrangements

had relatively high rates of coverage, but that coverage was

often unrelated to their own employment. For example, among

independent contractors, college graduates were most likely

to purchase their insurance on their own, while those who

had completed some college were most likely to rely on a

family member for coverage.

Pension coverage

Workers in alternative arrangements were less likely than traditional workers to have pension coverage, although there

was considerable variation among the different alternative

arrangements.2 Temporary help workers had the lowest proportion with pensions (3 percent), while independent contractors had the highest (35 percent). By comparison, nearly

one-half of workers in traditional arrangements had pension

coverage.

Because most independent contractors are self-employed

and, therefore, not likely to be covered by an employer-sponsored pension plan, the tabulations for pension coverage in

table 5 include a category for tax deferred savings accounts

such as Individual Retirement Accounts (IRA’s) and Keogh

plans. Of the independent contractors who participate in pension plans, 9 of every 10 had an IRA or Keogh plan. Independent

contractors age 55 and older were the most likely to have pension coverage; slightly more than half of these workers had

coverage, compared with one-third of those ages 25 to 54. A

very small proportion of independent contractors age 16 to 24

participated in employer-sponsored pension plans, and, in fact,

dent contractors had the highest rate (73 percent). By comparison, the proportion of workers in traditional arrangements

with health insurance was 83 percent.

Workers in traditional arrangements also were more likely

than those in alternative arrangements to be eligible for, and

receive, employer-provided health insurance. Among traditional workers, women were slightly more likely than men to

have health insurance from any source, while men were likely

to receive coverage from their employer.

(Text continues on page 54.)
50 Monthly Labor Review October 1996

Alternative ArrangementsCompensation

Percent of workers employed by contract firms providing health insurance and pension coverage, by selected

characteristics, February 1995

With pension coverage

 Total, 16 years and older ...... 652 69.9 42.5 6.6 58.0 28.5 36.0

16 to 24 years. .......................... 99 57.6 49.5 (1) 60.6 23.2 34.3

25 years and older .................... 554 71.8 41.2 7.8 57.6 29.4 36.3

25 to 34 years ....................... 254 68.1 46.5 8.7 61.0 26.8 35.8

35 to 44 years ....................... 152 78.9 48.7 7.2 65.8 42.1 48.0

45 to 54 years ....................... 77 80.5 31.2 7.8 45.5 28.6 33.8

55 years and older ................ 71 (2) (2) (2) (2) (2) (2)

Men .......................................... 466 69.1 40.8 8.6 58.8 29.2 36.3

Women ..................................... 186 71.5 46.8 1.6 56.5 26.9 35.5

Race and Hispanic origin

White ........................................ 541 72.8 43.3 7.6 58.6 28.7 36.8

Black ......................................... 76 55.3 35.5 2.6 53.9 23.7 28.9

Hispanic origin .......................... 55 (2) (2) (2) (2) (2) (2)

Full- and part-time status

Full-time workers ...................... 542 74.2 48.7 6.8 64.8 32.7 41.3

Part-time workers ..................... 109 47.7 11.9 3.7 24.8 9.2 10.1

Educational attainment

Less than a high school

diploma ................................. 75 41.3 18.7 1.3 29.3 16.7 23.1

High school graduates,

no college ............................. 187 63.6 34.2 8.0 53.5 17.4 23.7

Some college, no degree ......... 143 74.1 37.1 11.9 58.7 24.5 31.6

Associate degree ...................... 44 (2) (2) (2) (2) (2) (2)

College graduates .................... 185 80.0 60.5 3.2 68.6 44.9 53.5

Selected occupation

Professional specialty ............... 167 78.4 63.5 2.4 77.2 42.5 54.5

Technical, sales, and

administrative support ........... 97 84.5 48.5 (1) 67.0 29.9 42.3

Service occupations ................. 181 48.1 19.3 1.7 42.0 6.1 11.0

Precision production, craft,

and repair .............................. 95 70.5 31.6 25.3 44.2 46.3 46.3

Selected industry

Construction ............................. 109 72.5 36.7 27.5 45.0 33.9 37.6

Services .................................... 403 67.2 44.4 1.0 64.3 26.6 36.2

T

e 3.

Eligible for

employerprovided

pension

Total Total

Eligible for

employerprovided

health

insurance

Through other

 job or union

Through current

employer

at main job

Total

(in

thousands)

Table 3.

Characteristic

Age and sex

With health insurance coverage

1Less than 0.05 percent.

2Data not shown where base is less than 75,000.

NOTE: Workers with traditional arrangements are those who do not fall

into any of the “alternative arrangement” categories. Detail for the above

race and Hispanic-origin groups will not sum to totals because data for

the “other races” group are not presented and Hispanics are included in

both the white and black population groups. Data for full- and part-time

workers will not sum to totals because usual status on the principal job

is not identifiable for a small number of multiple jobholders.
Monthly Labor Review October 1996 51

Percent of employed on-call workers with health insurance and pension coverage, by selected characteristics,

February 1995

Total, 16 years and older ...... 1,968 66.1 17.2 5.6 26.5 18.6 25.3

16 to 24 years .......................... 379 58.0 7.1 1.1 15.3 5.5 11.1

25 years and older ................... 1,589 68.0 19.6 6.7 29.1 21.8 28.6

25 to 34 years ...................... 499 57.7 22.4 5.6 36.5 19.4 29.5

35 to 44 years ...................... 456 69.1 21.9 7.7 31.6 23.9 31.6

45 to 54 years ...................... 313 70.6 19.5 9.9 25.6 23.6 26.8

55 years and older ............... 320 79.7 11.9 3.8 18.4 20.9 25.0

Men ......................................... 952 64.6 23.7 10.0 32.6 20.8 28.7

Women .................................... 1,015 67.5 11.0 1.6 20.9 16.7 22.2

Race and Hispanic origin

White ....................................... 1,671 68.4 16.5 5.9 25.5 19.1 24.8

Black ........................................ 204 55.9 20.6 5.4 34.8 18.1 34.3

Hispanic origin ......................... 189 32.3 13.8 1.6 16.9 10.6 13.2

Full- and part-time status

Full-time workers. .................... 817 65.5 31.6 11.1 43.9 26.3 37.2

Part-time workers .................... 1,130 66.4 7.0 1.6 14.1 12.7 16.3

Educational attainment

Less than a high school

diploma ................................ 238 44.5 21.8 1.3 31.1 11.4 14.3

High school graduates,

no college ............................ 646 62.4 19.0 8.2 30.2 19.1 26.9

Some college, no degree ........ 327 73.4 19.6 8.6 29.7 14.4 19.7

Associate degree ..................... 206 75.2 22.3 9.7 29.1 25.5 35.8

College graduates ................... 371 72.8 13.5 1.1 24.0 24.5 31.3

Selected occupation

Professional specialty .............. 434 73.5 11.5 .2 23.7 24.0 30.6

Sales occupations ................... 122 60.7 8.2 (1) 15.6 9.0 15.6

Administrative support,

including clerical .................. 194 75.8 14.4 1.5 25.3 20.1 26.3

Service occupations ................ 393 61.8 13.7 3.1 23.2 11.2 18.6

Precision production, craft,

 and repair ............................ 262 75.2 34.7 26.7 39.3 26.7 30.5

Operators, fabricators,

and laborers ......................... 395 62.0 20.8 6.3 30.9 21.3 30.9

Farming, forestry,

and fishing ........................... 75 28.0 10.7 (1) 10.7 (1) (1)

Selected industry

Construction ............................ 268 62.7 23.5 25.0 29.1 23.5 26.5

Manufacturing .......................... 119 59.7 29.4 11.8 42.9 27.7 49.6

Transportation and public

 utilities ................................. 171 73.7 34.5 4.1 50.9 37.4 49.7

Retail trade .............................. 246 54.9 8.9 0.4 13.0 8.1 11.0

Services ................................... 945 68.4 10.9 1.6 22.1 15.4 21.8

Characteristic

Age and sex

Total

(in thousands) Through current

employer

at main job

Total

NOTE: Workers with traditional arrangements are those who do not fall into

any of the “alternative arrangement” categories. Detail for the above race and

Hispanic-origin groups will not sum to totals because data for the “other races”

1Less than 0.05 percent. group are not presented and Hispanics are included in both the white and

black population groups. Data for full- and part-time workers will not sum to

totals because usual status on the principal job is not identifiable for a small

number of multiple jobholders.

Through other

 job or union

Eligible for

employerprovided

health

insurance

Eligible for

employerprovided

pension

Total

With health insurance coverage With pension coverage

Table 4.
52 Monthly Labor Review October 1996

Alternative ArrangementsCompensation

Percent of employed independent contractors with health insurance and pension coverage by selected

characteristics, February 1995

With health insurance coverage With pension coverage

Through Through Through

current spouse or current

employer other family employer

at main job member at main job

Total, 16 years and older .......... 8,309 72.6 3.0 27.0 31.0 10.7 35.1 2.5 32.6

16 to 19 years .............................. 125 75.2 (1) 60.0 1.6 7.2 6.4 4.0 2.4

20 to 24 years .............................. 197 54.3 3.6 21.3 22.3 4.6 6.1 5.1 1.0

25 years and older ....................... 7,987 73.1 3.1 26.6 31.6 11.0 36.3 2.4 33.8

25 to 34 years .......................... 1,639 61.3 3.8 27.0 24.3 5.3 19.6 3.2 16.4

35 to 44 years .......................... 2,559 68.8 3.0 27.9 31.2 6.2 35.2 2.2 33.0

45 to 54 years .......................... 2,099 75.9 2.7 29.1 36.6 6.9 37.7 2.6 35.1

55 to 64 years .......................... 1,131 83.6 3.5 27.2 34.4 16.9 54.1 2.7 51.4

65 years and older. .................. 559 94.6 1.4 8.9 31.1 53.0 49.0 .2 48.8

Men ............................................. 5,595 71.3 3.4 20.6 35.1 11.7 35.7 2.8 33.0

Women ........................................ 2,714 75.3 2.2 40.2 22.5 8.8 33.8 2.0 31.8

Race and Hispanic origin

White ........................................... 7,671 73.6 2.9 27.5 31.4 10.8 36.6 2.4 34.2

Black ............................................ 416 63.0 3.8 24.3 23.8 10.8 14.7 4.6 9.9

Hispanic origin ............................. 431 51.0 4.2 19.3 20.6 6.0 13.2 3.7 9.5

Full- and part-time status

Full-time workers ......................... 5,945 72.3 3.7 23.9 35.5 8.4 36.1 3.0 33.1

Part-time workers. ....................... 2,278 73.5 1.4 35.0 18.7 17.2 32.1 1.4 30.8

Educational attainment

Less than a high school diploma . 795 48.7 .6 16.6 20.8 9.7 14.6 1.3 13.3

High school graduates,

no college ................................ 2,351 64.6 2.0 24.2 29.3 7.6 25.1 2.0 23.1

Some college, no degree ............ 1,623 76.6 2.2 32.3 32.0 9.6 32.5 1.6 31.0

Associate degree ......................... 618 71.2 3.4 26.1 29.6 11.7 31.1 1.8 29.3

College graduates ....................... 2,800 83.5 5.1 27.6 36.0 14.3 53.0 4.0 49.1

Occupation

Executive, admininistrative,

and managerial ........................ 1,542 80.6 2.3 28.5 37.3 11.6 45.7 2.4 43.3

Professional specialty .................. 1,353 78.9 3.5 28.2 33.2 13.7 48.3 2.9 45.4

Technicians and related

 support .................................... 91 70.3 15.4 23.1 22.0 9.9 33.0 7.7 25.3

Sales occupations ....................... 1,558 80.9 5.4 28.5 35.6 11.0 45.6 4.6 40.9

Administrative support,

including clerical ...................... 318 85.8 4.4 39.3 26.4 15.7 42.5 1.9 40.3

Service occupations .................... 881 63.6 1.6 31.8 17.4 8.4 15.7 1.5 14.3

Precision production, craft,

and repair ................................. 1,596 62.3 1.3 22.1 29.7 8.6 22.9 1.4 21.6

Operators, fabricators,

and laborers ............................. 542 54.6 2.4 22.0 20.7 9.4 17.7 2.2 15.5

Farming, forestry, and fishing ...... 427 65.1 1.6 19.4 35.1 8.7 20.1 .5 19.7

Selected industry

Agriculture ................................... 412 70.6 3.2 23.1 37.6 6.8 25.2 .5 25.0

Construction ................................ 1,764 62.6 .6 23.6 30.4 7.5 25.5 .9 24.6

Manufacturing .............................. 414 73.9 7.2 20.0 34.1 12.3 38.4 7.0 31.6

Transportation and public

utilities ...................................... 415 62.4 1.7 20.7 32.3 7.7 22.7 .5 22.2

Wholesale trade .......................... 277 80.5 6.9 19.5 40.4 13.0 43.7 3.6 40.1

Retail trade .................................. 817 78.9 2.7 29.6 33.7 12.1 34.1 3.3 30.8

Finance, insurance,

and real estate ......................... 795 84.2 7.0 27.3 38.1 11.3 59.2 5.8 53.5

Services ....................................... 3,377 74.4 2.5 30.9 26.9 12.4 36.3 2.2 34.1

Age and sex

Characteristic

Total

(in

thousands) Total Other

source

Purchased

on own

IRA or

Keogh

1Less than 0.05 percent.

NOTE: Workers with traditional arrangements are those who do not fall

into any of the “alternative arrangement” categories. Detail for the above

race and Hispanic-origin groups will not sum to totals because data for the

“other races” group are not presented and Hispanics are included in both the white

and black population groups. Data for full- and part-time workers will not sum to

totals because usual status on the principal job is not identifiable for a small number of multiple jobholders.

Total

Table 5.
Monthly Labor Review October 1996 53

Percent of workers employed in traditional job arrangements providing health insurance and pension coverage,

With health insurance

Age and sex

Total, 16 years and older ....... 103,795 82.9 61.2 0.9 73.5 49.0 56.0

16 to 24 years ........................... 16,608 68.2 31.3 .5 45.5 14.7 26.1

25 years and older .................... 87,187 85.7 66.9 .9 78.8 55.5 61.7

25 to 34 years ....................... 28,171 80.1 63.9 .6 77.3 46.5 55.8

35 to 44 years ....................... 28,586 86.7 68.7 .8 80.7 58.9 64.3

45 to 54 years ....................... 19,467 89.9 71.8 1.1 82.6 64.8 68.7

55 years and older ................ 10,964 90.0 61.1 1.9 71.3 53.3 57.6

Men .......................................... 54,244 82.2 66.3 1.3 76.2 51.0 57.3

Women ..................................... 49,551 83.6 55.6 .4 70.6 46.8 54.6

Race and Hispanic origin

White ........................................ 87,667 84.3 61.5 .9 73.8 49.5 56.3

Black ......................................... 11,945 75.7 60.5 .7 73.0 48.9 56.9

Hispanic origin .......................... 9,209 62.6 49.5 1.2 59.3 31.5 37.4

Full- and part-time status

Full-time workers ...................... 84,333 85.1 71.2 .9 82.8 56.5 63.8

Part-time workers ..................... 19,272 73.3 17.4 .8 32.9 16.0 22.1

Educational attainment

Less than a high school

diploma ................................. 10,347 59.9 43.8 1.0 56.8 22.7 28.9

High school graduates,

 no college ............................ 32,896 80.3 60.3 1.2 73.7 45.7 53.5

Some college, no degree ......... 19,261 84.2 64.3 1.0 77.8 45.1 52.4

Associate degree ...................... 8,556 89.5 69.3 .9 82.4 57.5 65.0

College graduates .................... 25,974 93.5 77.0 .3 87.0 66.6 72.6

Selected occupation

Executive, administrative,

and managerial ..................... 13,484 91.9 75.8 .3 86.8 64.0 69.4

Professional specialty ............... 15,494 92.9 74.4 .4 84.9 67.6 73.2

Technicians and related

support .................................. 3,686 91.1 72.0 .4 83.7 60.2 67.6

Sales occupations .................... 11,569 80.1 48.0 .4 63.1 33.5 41.8

Administrative support,

including clerical ................... 17,119 88.6 64.0 .4 78.0 53.9 62.7

Service occupations ................. 14,423 67.2 35.8 .8 50.1 27.1 33.5

Precision production,

craft, and repair ..................... 10,704 79.9 65.3 2.9 75.3 49.7 55.1

Operators, fabricators,

and laborers .......................... 15,908 77.5 62.2 1.5 73.9 43.2 52.2

Farming, forestry, and fishing ... 1,408 61.8 37.7 1.3 46.7 21.7 24.3

Selected industry

Agriculture ................................ 1,277 (1) (1) (1) (1) (1) (1)

Mining ....................................... 618 90.0 81.1 1.1 88.5 62.8 69.9

Construction ............................. 4,491 67.8 44.5 6.0 56.0 30.6 34.6

Manufacturing ........................... 19,319 88.1 77.8 0.6 87.6 61.1 69.1

Transportation and public

 utilities .................................. 7,772 89.4 77.9 1.3 86.2 64.2 70.7

Wholesale trade ....................... 3,916 86.2 69.3 .9 81.1 50.1 56.2

Retail trade ............................... 17,933 70.0 34.9 .7 51.4 21.7 30.1

Finance, insurance,

and real estate ...................... 6,711 90.1 69.6 .3 82.2 58.9 67.6

Services .................................... 35,811 83.9 58.0 .5 71.6 48.1 55.0

Public administration ................ 5,947 95.4 85.8 .3 92.5 85.1 88.3

Characteristic

Total

Table 6.

Eligible for

employerprovided

health

insurance

Through current

employer

at main job

Through other

job or union Total

Eligible for

employerprovided

pension

1Less than 0.05 percent.

NOTE: Workers with traditional arrangements are those who do not fall into

any of the “alternative arrangement” categories. Detail for the above race and

Hispanic-origin groups will not sum to totals because data for the “other races”

group are not presented and Hispanics are included in both the white and black

population groups. Data for full- and part-time workers will not sum to totals

because usual status on the principal job is not identifiable for a small number

of multiple jobholders.

 With pension coverage

Total

(in thousands)

 by selected characteristics, February 1995
54 Monthly Labor Review October 1996

Alternative ArrangementsCompensation

1

 In the survey, respondents were asked, “Do you have health

insurance from any source?” If the answer to that question was

“yes,” respondents were then asked whether they received insurance from their employer. Those who did not receive health insurance from their employer were asked for the source of their

health insurance; in addition, they were asked whether they were

eligible to receive insurance from their employer. Respondents

who said “no” to the initial question, “Do you have health insurance from any source?,” were asked if their employer offered health

insurance to any of its workers, and if they were eligible to be in

the plan if they wanted.

the vast majority of younger workers do not participate in pension plans, even those in traditional arrangements.

In terms of eligibility for pensions from their employers, contract company workers were most likely to be offered pensions.

The proportion eligible for coverage was 36 percent, compared

with 25 percent for on-call workers and 7 percent for temporary

help workers. In contrast, more than half of workers in traditional

arrangements were eligible for pensions from their employer.

Men in traditional arrangements and in each alternative

work arrangement were slightly more likely than their female

counterparts to have pension coverage. Among workers in

alternative arrangements, women working for temporary help

companies had the lowest rate of coverage (2 percent), while

men working as independent contractors had the highest—

36 percent.

In each employment arrangement, workers with higher levels

of education tended to have higher rates of pension coverage.

Among alternative work arrangements, at each level of educational attainment, independent contractors had the largest proportion of workers with coverage, although there was wide variation among independent contractors by level of education.

Much of this variation in coverage rates was attributable to

differences in the fraction of workers with tax deferred savings

accounts, and may reflect differences in income levels. People

with more education and higher incomes have more disposable

income from which to save, and also have a greater tax incentive

to put money into tax deferred savings accounts. It also could

be that more highly educated workers are more willing to forego

current consumption, and, hence, are more likely to save in general.

EARNINGS OF WORKERS IN alternative work arrangements vary

not only by type of arrangement, but also within the different

arrangements by occupation, education, and other factors.

Overall, contract company workers and independent contractors, who tend to be more highly educated and concentrated

in skilled occupations, actually out-earn similar workers in

traditional arrangements, while on-call workers and temporary help workers earn less than their counterparts in traditional arrangements. In terms of health insurance and pensions, workers in each alternative arrangement were less likely

than traditional workers to have coverage from any source.

Among the alternative arrangements, independent contractors and contract company workers were most likely to have

health insurance coverage and pensions, while onFootnotes

2 In the survey, respondents were asked, “Does (employer’s name)

offer a pension or retirement plan to any of its employees?” If the

answer to that question was “yes,” the respondent was then asked, “Are

you included in this plan?” If the response was “no,” the respondent

was asked, “why not?” The response to this question was used to

determine eligibility for those not in a plan.

call and temporary help workers were least likely.