22 Monthly Labor Review October 1996

Contingent W orkers—Compensation Contingent WorkersCompensation

Earnings and benefits of contingent

and noncontingent workers

Contingent workers generally earn less income

and are less likely to receive health insurance

and pension benefits through their employers

than are noncontingent workers; however,

many have access to health insurance from other sources

There is a perception that contingent jobs

pay low wages and offer few benefits,

such as health insurance and pensions.

Economic theory does not offer much guidance on

whether to expect the earnings of contingent

workers to be higher or lower than those of

noncon-tingent workers. Neoclassical economic

theory predicts that workers will have to be paid

com-pensating differentials if some aspects of the

job are less desirable. This means that if workers

prefer more stable jobs, then they have to be paid

more for the additional risk of contingent

employment arrangements. On the other hand,

dual labor market theories argue that markets are

segmented into a “good job” sector and a “bad job”

sector. Jobs in the bad job sector are characterized

by low pay, poor working conditions, few benefits,

and poor prospects for moving into the good job

sector. In addition, workers in the bad job sector

may not have the “clout” to negotiate higher wages

or employer-provided benefits. Until the

Contingent Worker/Alternative Work

Arrangement Supple-ment to the Current

Population Survey (CPS) was conducted in

February 1995, only limited data were available to

examine the compensation of con-tingent workers.

This article takes a first look at the compensation

data from that survey.

Earnings

Overall, contingent workers earn less than

noncontingent workers. For contingent workers,

median weekly earnings were $285, compared

with $416 for noncontingent workers. (All the

comparisons in this article use the broadest estimate of the contingent work force, and exclude

the self-employed—both incorporated and unincorporated—and independent contractors. See

the article by Anne E. Polivka, pages 3–9, this

issue.) This overall difference in earnings is not

surprising because contingent workers differ in

many respects from their noncontingent counterparts. These differences may account for the

overall earnings gap between the two groups.

One of the key differences between contingent

workers and their noncontingent counterparts is

that a much larger proportion of the contingent

work only part time, and part-time workers in general earn less than full-timers. 1 Among both fulltime and part-time workers, however, the contingent workers’ earnings are about 80 percent of

those of noncontingent. (See table 1.) Even among

all part-time workers, some of the earnings disparity is attributable to the fact that contingent

workers put in almost 10 percent fewer hours than

noncontingent.

Another difference between contingent and

noncontingent workers that could contribute to

their difference in earnings is that contingent

workers tend to be younger, and younger workers, in general, tend to be lower paid. Also, there

is considerable variation in earnings between

contingent and noncontingent by age. GenerSteven Hipple

and

Jay Stew art

Steven Hipple is an

economist in the

Office of Employment

and Unemployment

Statistics, and Jay

Stew artisaresearch

economist in the

Office of Employment

Research and

Progra m

D evelopment, both in

the Bureau of Labor

Statistics.
Monthly Labor Review October 1996 23

Median weekly earnings of full-time and part-time contingent and noncontingent wage and salary workers,

Median weekly earnings

Full-time workers Part-time workers

Noncontingent Contingent Noncontingent

Age and sex

Total 16 years and older ................................................ $385 $479 $109

16 to 19 years ....................................................................... 241 234 64 91

20 to 24 years ....................................................................... 277 306 94 132

25 years and older ................................................................ 467 506 148 167

25 to 34 years.................................................................... 362 452 161

 35 to 44 years .................................................................... 499 521 154 176

 45 to 54 years .................................................................... 613 592 146 167

55 to 64 years.................................................................... 541 502 142 158

65 years and older ............................................................. (1) 376 105 119

Men, 16 years and older ........................................................... 443 541 112 130

16 to 19 years ....................................................................... (1) 251 67 90

20 to 24 years ....................................................................... 307 319 85 127

25 years and older ................................................................ 546 590 158 196

25 to 34 years.................................................................... 394 496 167 228

35 to 44 years.................................................................... 546 610 131 233

45 to 54 years.................................................................... 796 699 (1) 262

55 to 64 years. ................................................................... 514 633 158 204

65 years and older ............................................................. (1) 391 (1) 128

Women, 16 years and older ..................................................... 322 409 107 140

16 to 19 years ....................................................................... (1) 212 62 91

20 to 24 years ....................................................................... 245 290 98 134

25 years and older ................................................................ 369 424 144 161

25 to 34 years.................................................................... 320 398 158 172

35 to 44 years.................................................................... 420 429 163 171

45 to 54 years.................................................................... 377 489 129 159

55 to 64 years.................................................................... (1) 406 124 144

65 years and older ............................................................. (1) 355 (1) 110

Race and Hispanic origin

White ........................................................................................ 420 497 108 140

Black ......................................................................................... 289 364 115 121

Hispanic origin .......................................................................... 275 340 126 130

Educational attainment

Less than a high school diploma .............................................. 269 299 90 98

High school graduates, no college ........................................... 325 405 111 141

Some college, no degree .......................................................... 355 449 82 134

Associate degree ...................................................................... 509 566 146 188

College graduates .................................................................... 603 734 174 260

Table 1.

Characteristic

$138

184

under the broadest definition of contingency.

Data exclude the incorporated self-employed and independent contractors.

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

NOTE: Noncontingent workers are those who are not classified as contingent

than a high school diploma and those with associate’s degrees

earn the most relative to noncontingent workers, while high

school graduates and those who have some college earn the least.

Contingent

by selected characteristics,February 1995

ter relative to their noncontingent counterparts than those

aged 25 to 54. (See table 1.)

Contingent workers also have lower levels of educational attainment than the noncontingent. Many of the youngest contingent workers are still in school. Contingent workers with less
24 Monthly Labor Review October 1996

Contingent W orkers—Compensation

ally, younger and older contingent workers fare betvices industry, with slightly more than half employed in that

industry. This also is the industry that has a relatively low

contingent-to-noncontingent earnings ratio (70 percent), yet

the ratio is higher than 70 percent in each of the major

subcategories of the services group. This reflects the fact

that contingent workers in services are disproportionately

concentrated in lower paying private household services.

Because workers in private household services (whether

contingent or not) have relatively low earnings, the overall

contingent-to-noncontingent earnings ratio for services is

depressed by their large employment share among contingent workers. In construction, another industry

accounting for a disproportionate share of the contingent

work force, contingent workers earn about the same as their

noncon-tingent counterparts.

Interestingly, in some industries, the contingent-tononcontingent earnings ratio for part-time workers is low, while

the ratio for full-time workers is high. For instance, in construction, the ratios are 69 percent for part-timers and 108 percent for full-timers. Similar differences also occur in private

household services and in professional and related services. In

contrast, part-time contingent workers in agriculture and retail trade earn a higher proportion of the noncontingent wage

than do full-time contingent workers. (See table 2.)

By occupation, there is less dispersion than was the case by

industry. Generally, it is the skilled occupations that seem to

pay contingent workers relatively higher wages. Contingent

workers in precision production, craft, and repair occupations

earn about the same wage as their noncontingent counterparts.

For managerial and professional specialty occupations, contingent workers earn 87 percent of noncontingent worker earnings. (See table 2.)

In summary, earnings of contingent workers tend to be

lower than those of noncontingent. And, while differences in hours worked, age, education, and industry of

employment would appear to account for some of the gap,

in most cases, earnings of contingent workers still fall

short of noncontingent workers.

Health insurance coverage

Compared with workers in noncontingent arrangements,

contingent workers, in general, are less likely to receive

health insurance from their employer.2 This also is true for

each population group—by gender, race, and educational attainment, for example. One-fifth of contingent workers have

employer-provided health insurance, in contrast to nearly

two-thirds of noncontingent workers. Moreover, workers in

contingent arrangements are less likely to be offered health

insurance by their employer. One-third of contingent workers are eligible for employer-provided health insurance, compared with nearly three-fourths of noncontingent workers.

(See table 3.)

But employer-provided health insurance differs from other

forms of compensation in that it can be extended to other

immediate family members. This means that the value to a

worker of having employer-provided health insurance coverage is large if it is the family’s only source of coverage, but

is small if the worker is already covered by a relative’s policy.

Hence, it may be misleading to look only at the fraction of

workers who receive coverage from their employers. One

should also look at coverage from other sources. Given that

some do not have alternative sources of health insurance, it

is possible that workers will sort themselves into jobs based,

in part, on the availability of health insurance. Sorting in

this instance means that workers who do not already have

health insurance coverage will be relatively less likely to

accept jobs without health insurance.

Although contingent workers are less likely to receiveemployer-provided health insurance, a large proportion—

two-thirds—have health insurance from any source. Contingent workers get health insurance coverage from a variety of sources, but access through another family member is

the most common. Nevertheless, contingent workers are still

less likely than noncontingent workers to have health insurance from any source.

The lack of employer-provided health insurance affects

contingent workers in the 20-to-54 age group more than it

does teenage and older workers. Among contingent workers aged 20 to 54 years, fewer than one-third have health

insurance through their employer, while another one-third

report having health insurance from some other source. By

comparison, the proportions of teenage (3 percent) and older

(16 percent) contingent workers who have employer-provided health insurance are very small. However, relatively

large proportions of contingent workers in either group—

nearly equal to those of their noncontingent counterparts—

have health insurance from some source. Teenage workers

are likely to rely on their parents for their health insurance,

while contingent workers aged 65 and older have nearly

universal coverage under medicare.

Among contingent workers, women are less likely than men

to obtain health insurance from an employer or employmentrelated source, but are actually more likely than men to have

insurance from all sources. Women in contingent jobs are more

likely to depend on nonemployment-related sources, such as a

spouse, for their health insurance.

employer-provided health insurance. Furthermore, both

black and white contingent workers are about equally

likely to be offered health insurance by their employer;

Contingent workers are heavily concentrated in the ser-
Monthly Labor Review October 1996 25

Median weekly earnings of full-time and part-time contingent and noncontingent wage and salary workers,by

occupation and industry,February 1995

Median weekly earnings

Occupation and industry Full-time workers Part-time workers

Contingent Noncontingent Contingent Noncontingent

Occupation

Managerial and professional specialty ................................ $615 $709 $144 $246

Executive, administrative, and managerial ....................... 582 685 138 203

Professional specialty ...................................................... 623 728 146 266

Technical, sales, and administrative support ....................... 324 431 99 139

Technicians and related support ...................................... 419 568 145 295

Sales occupations ............................................................ 407 484 100 117

Administrative support, including clerical ......................... 311 399 94 157

Service occupations ............................................................ 221 298 78 115

Private household. ........................................................... 189 180 55 99

Other services .................................................................. 227 301 84 116

Precision production, craft, and repair ................................. 510 517 178 199

Operators, fabricators, and laborers .................................... 301 374 129 124

Farming, forestry, and fishing .............................................. 230 297 117 99

Industry

Agriculture ........................................................................... 245 295 125 135

Mining .................................................................................. (1) 677 (1) 230

Construction ........................................................................ 512 476 197 287

Manufacturing ...................................................................... 448 488 153 164

Durable goods .................................................................. 441 514 166 196

Nondurable goods ............................................................ 359 451 121 144

Transportation and public utilities ........................................ 511 592 166 206

Wholesale trade .................................................................. (1) 495 (1) 183

Retail trade .......................................................................... 276 335 103 113

Finance, insurance, and real estate .................................... 562 487 153 173

Services .............................................................................. 344 492 101 155

Private household ............................................................ 175 194 63 113

Other services .................................................................. 357 496 104 159

Professional and related services ................................. 514 522 99 169

Public administration ........................................................... 526 582 103 152

Table 2.

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

Data exclude the incorporated self-employed and independent contractors.

gent under the broadest definition of contingency.

NOTE: Noncontingent workers are those who are not classified as continabout one-third of the workers in each group said they are

eligible for employer-provided health insurance. In contrast,

a very small proportion of Hispanic contingent workers—1

of every 10—has employer-provided health insurance, and

fewer than 1 of every 5 reports being eligible. Among contingent workers in the three race/ethnic groups, however,

whites are much more likely than are blacks or Hispanics to

have health insurance from any source. It appears that minority workers in contingent jobs are not as able to rely on

family members or other nonemployment-related sources for

their health insurance coverage.

As with earnings, differences in receipt of, and eligibility for, employer-provided health insurance between contingent and noncontingent workers, in part, reflects differences

in the work hours, level of education, and industrial distribution of the two groups.

Part-time workers in contingent and noncontingent arrangements are less likely than full-time workers to have employer-provided health insurance. However, among contingent

workers, those with part-time jobs have even more limited access to employer-provided health insurance; only 10 percent

receive health insurance from their employer, compared with

about 17 percent of the noncontingent part-time workers.

Although the proportion who receive health insurance from their
26 Monthly Labor Review October 1996

Contingent W orkers—Compensation

Percent of employed contingent and noncontingent wage and salary workers with health insurance coverage, by

selected characteristics,February 1995

Contingent workers Noncontingent workers

Eligible for

provided

health

insurance

Total, 16 years

 and older .................. 5,503 65.1 22.4 3.4 34.1 102,222 82.9 61.6 0.8 73.9

16 to 19 years. .............. 588 71.1 3.1 .0 14.6 4,794 70.0 7.4 .2 21.1

20 to 24 years. .............. 1,142 57.0 12.3 1.4 22.8 10,916 66.9 43.8 .6 58.7

25 years and older. ....... 3,773 66.7 28.4 4.5 40.6 86,512 85.7 66.8 .9 78.8

25 to 34 years ........... 1,409 55.2 26.3 2.5 36.3 27,917 80.3 64.0 .7 77.6

35 to 44 years ........... 1,133 68.3 30.4 4.8 45.7 28,349 86.6 68.7 .7 80.6

45 to 54 years ........... 687 74.8 31.7 8.4 43.2 19,344 89.7 71.6 1.0 82.4

55 to 64 years ........... 338 81.1 31.7 6.2 42.3 8,804 89.0 66.9 1.7 76.5

65 years and older .... 205 86.3 15.6 1.5 28.8 2,098 92.2 34.6 2.2 45.0

Men .............................. 2,727 62.8 26.1 5.8 36.9 53,553 82.2 66.6 1.3 76.5

Women.. ....................... 2,776 67.5 18.7 1.0 31.4 48,669 83.7 56.0 .4 71.1

Race and Hispanic origin

White ............................ 4,432 69.1 22.8 3.8 34.5 86,402 84.3 61.8 .9 74.2

Black. ............................ 755 48.9 19.3 2.1 31.4 11,744 75.9 61.0 .7 73.5

Hispanic origin .............. 624 27.4 10.6 .8 15.5 9,043 63.0 50.1 1.2 60.0

Full- and part-time status

Full-time workers .......... 3,068 62.7 32.2 5.2 46.1 83,614 85.2 71.4 .8 83.0

Part-time workers ......... 2,422 68.3 10.0 .9 19.0 18,411 72.9 17.4 .8 33.1

Educational attainment

Less than a high

school diploma .......... 645 30.2 10.1 2.3 20.3 10,275 60.1 44.2 .9 57.2

High school graduates,

 no college ................ 1,340 59.4 20.2 6.9 33.8 32,788 80.2 60.3 1.1 73.7

Some college,

no degree .................. 818 61.6 21.8 6.1 31.7 19,196 84.3 64.3 1.0 77.9

Associate degree .......... 321 69.8 28.7 5.6 38.9 8,559 89.7 69.1 1.0 82.3

College graduates ........ 1,363 80.3 40.9 .6 54.2 25,387 93.5 77.3 .4 87.2

Table 3.

Characteristic

W ith health insurance W ith health insurance

Among full-time workers, those with contingent jobs are half

as likely as noncontingent workers to receive employer-provided

health insurance (32 percent versus 71 percent). In terms of eligibility for employer-provided health coverage, fewer than

half of contingent, full-time workers are offered health insurance, compared with four-fifths of noncontingent. Because a

substantial number of full-time contingent workers are not offered employer-provided health insurance or are unable to turn

about the same proportion as part-time noncontingent workers.

One explanation for this is that younger workers—aged 16 to

24—account for 45 percent of all part-time contingent workers.

It is likely that many of these workers are receiving health

insurance through a family member, usually their parents, or

possibly through school.

every 10—have health insurance from some source. This is

NOTE: Noncontingent workers are those who are not classified as contingent under the broadest definition of contingency. Data exclude the incorporated self-employed independent contractors. 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.

Total

(in

percent)

Through

current

employer

at main job

Total

(in

thousands)

Total

(in

percent)

Through

other

job

or union

Total

(in

thousands)

Eligible for

employerprovided

health

insurance

Through

other

job

 or union

employer- Through

current

employer

at main job

Age, and sex

employer is small, a large share of these workers—nearly 7 of
Monthly Labor Review October 1996 27

A similar pattern holds by industry and occupation. In

all industries and occupations, contingent workers have

lower pension coverage rates and lower rates of pension

eligibility. The variation in coverage and eligibility rates

by industry and occupation is similar for both contingent

and noncontingent workers. (See table 6, page 30.)

For both contingent and noncontingent workers, there is considerable variation in the proportion with pensions and the proportion with eligibility for pensions. The overall difference in

coverage and eligibility between the groups largely reflects the

differences in eligibility for pensions, as well as the decision of

workers as to whether they will participate in those plans. The

different industry distributions of the two groups play a very

limited role in the difference in coverage.

have health insurance from any source than are noncontingent

workers. A much lower eligibility for employer-provided

health insurance coverage appears to account for much of the

difference in overall health insurance coverage.

The fact that a substantial proportion of contingent workers is in the services industry is probably a factor in the lower

rate of overall health insurance coverage through the employer, because eligibility for employer-provided health insurance in that industry is relatively low for both contingent

and noncontingent. In all industries, however, employer-provided health insurance coverage is less common among contingent workers than among noncontingent workers. For both

contingent workers and noncontingent workers, the health

insurance coverage rate from all sources varies less by industry than does the employer-provided health insurance

coverage rate.3 (See table 4.)

Lack of access to employer-provided health insurance

clearly contributes to the lower coverage rate among contingent workers. The fact that many contingent workers receive

health insurance from other sources suggests that some of

these workers may be sorting themselves into such jobs based

on their ability to obtain health insurance through nonemployment sources. However, one cannot say for sure, because

no information was collected on the availability of nonemployment-based health insurance for people who have health

insurance through their employers.

Pension plan coverage

Pension coverage is more like wage and salary earnings in

that the pension will pay a prespecified amount each month,

Workers with higher levels of education are more likely to

have health insurance. This relation holds for receipt of, and

eligibility for, employer-provided health insurance, and for

total coverage, and applies to workers in both contingent and

noncontingent arrangements. (See table 3.) Nevertheless, at

each level of education, contingent workers are less likely to

or prespecified lump-sum amount at retirement.4 The pension can be shared, but it cannot be extended to other family members as can health insurance.5 Another difference between pensions and health insurance is the timing

of the benefit. Workers do not have to be covered by a

pension on their current job in order to receive benefits at

a later time. However, they must work for a company long

enough to be vested, and thus eligible to receive benefits

at a later time. Given that most young people tend to

change jobs frequently, pension coverage is a less important element of total compensation than are wages or health

insurance for young workers.

In contrast to noncontingent workers, those in contingent

jobs are far less likely to participate in an employer-sponsored pension plan. Only 15 percent of contingent workers

participate in such plans, compared with one-half of noncontingent workers. Furthermore, workers in contingent arrangements are similarly less likely to be offered pensions by their

employer; only one-fifth of contingent workers are eligible

for employer-provided pensions, compared with nearly threefifths of noncontingent workers. Again, the composition of

the contingent work force—its age, work schedule, and education level—partially explains why it has such low levels of

pension coverage.

Nearly one-third of contingent workers are young—aged 16to 24. These young workers are much less likely than

prime-age contingent workers to participate in pension plans or

to work in industries where employers typically offer pensions.

Nevertheless, among workers in every age group, those with

contingent employment are less likely than those with noncontingent jobs to have, or be eligible for, employer-provided pensions. (See table 5.)

Among both full- and part-time workers, those with contingent jobs are less likely than their noncontingent counterparts

to have pension plans, or be eligible for them. The rate of pension coverage for full-time noncontingent workers (57 percent)

is about 2-1/2 times greater than that of full-time contingent

workers (22 percent). A similar pattern is displayed among

workers with part-time employment.6 (See table 5.)

Workers with higher levels of education are generally

more likely to have, or be eligible for pensions from their

employer, regardless of whether they are in a contingent or

noncontingent job. However, at each level of educational attainment, contingent workers are much less likely than

noncontingent workers to have or be offered employer-provided pensions. (See table 5.)

COMPARED WITH NONCONTINGENT WORKERS, contingent workers

earn less, and are less likely to be covered by an employerto nonemployment-related sources, a fairly large proportion

lacks coverage, 37 percent, compared with 15 percent for

noncontingent workers.
28 Monthly Labor Review October 1996

Contingent W orkers—Compensation

Percent of employed contingent and noncontingent wage and salary workers with health insurance coverage by

Contingent workers

Managerial and

professional

specialty .................... 1,565 80.2 38.6 0.8 50.9 28,287 92.5 75.5 0.3 86.2

Executive,

administrative,

and managerial ......... 405 78.8 41.0 .5 54.3 13,253 92.0 76.2 .3 87.1

Professional

 specialty ................... 1,160 80.7 37.8 .9 49.7 15,034 93.0 74.9 .3 85.4

Technical, sales, and

administrative

support ...................... 1,520 70.5 17.6 .8 31.4 31,724 85.9 60.0 .4 74.1

Technicians and

related support ......... 155 85.8 39.4 (1

) 54.8 3,651 91.0 72.4 .4 84.0

Sales occupations ...... 323 66.3 18.9 30.7 11,416 80.1 48.3 .4 63.4

Administrative

support,

including clerical ....... 1,042 69.5 13.9 1.2 28.1 16,657 88.8 65.3 .3 79.3

Service occupations ..... 815 54.5 9.7 .7 16.6 14,355 67.4 36.1 .9 50.7

Private household ....... 130 44.6 1.5 1.5 590 47.5 2.9 .7 3.9

Other service .............. 686 56.3 11.2 .9 19.2 13,765 68.2 37.5 .9 52.7

Precision production,

 craft, and repair.......... 538 61.2 24.5 19.0 35.5 10,599 80.1 65.9 2.8 75.6

Operators, fabricators,

and laborers .............. 915 48.5 15.8 5.4 28.7 15,883 77.4 62.2 1.3 73.9

Farming, forestry, and

fishing ....................... 150 28.7 2.0 3.3 10.7 1,375 62.9 39.1 .9 47.9

Industry

Agriculture .................... 132 25.0 2.3 6.8 1,241 59.2 33.3 1.0 44.2

Mining ........................... 18 626 89.9 81.2 .6 88.8

Construction ................. 518 56.9 20.5 22.0 27.4 4,426 67.9 45.1 5.5 56.5

Manufacturing ............... 619 61.2 29.4 1.6 41.7 19,071 88.2 78.1 .7 88.0

Durable goods ............ 376 62.2 31.9 2.7 48.4 11,063 89.5 80.1 .7 89.6

Nondurable goods ...... 240 59.2 24.6 30.0 7,971 86.5 75.5 .7 85.9

Transportation and

public utilities............. 240 68.3 32.9 6.7 47.9 7,798 89.3 77.8 1.2 86.2

Wholesale trade ........... 97 66.0 33.0 6.2 36.1 3,878 86.4 69.3 .9 81.3

Retail trade ................... 542 57.4 8.9 1.1 21.8 17,688 70.2 35.3 .6 51.7

Finance, insurance,

and real estate .......... 144 81.3 47.9 .7 60.4 6,637 90.3 69.4 .4 82.1

Services ....................... 2,975 68.5 20.0 1.0 32.6 35,046 83.8 58.5 .5 72.3

Private household ....... 162 46.3 1.2 3.1 1.2 688 50.7 5.7 .9 6.8

Other services ............ 2,813 69.8 21.1 .9 34.4 34,359 84.4 59.6 .5 73.6

 Professional and

 related services ..... 1,869 78.9 27.9 .4 40.3 25,753 88.7 64.5 .4 78.4

Public administration ..... 218 80.7 50.0 60.1 5,811 95.6 86.5 .3 93.1

1

Less than 0.05 percent.

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

Eligible for

employerprovided

health

insurance

Through Through

Total current other

(in per- employer job

cent) at main job or union

Table 4.

Occupation

Total

(in thousands)

Occupation

 and industry

Total

(in percent)

Through

current

employer

at main job

Through

other

job

or union

Total

(in thousands)

Eligible for

employerprovided

health

insurance

W ith health insurance W ith health insurance

(

2

)

(1

)

 (1)

 (1)

 (2)

 (1)

(1)

(1)

Noncontingent workers

occupation and industry,February 1995

 (2)
Monthly Labor Review October 1996 29

testimony to the defining characteristic of a contingent job, that

is, its temporary nature.

Percent of employed contingent and noncontingent wage and salary workers with pension coverage, by selected

characteristics,February 1995

Contingent workers Noncontingent workers

Total Total

with with

pensions pensions

Age and sex

Total, 16 years and older. ......................... 5,503 15.3 22.2 102,222 49.5 56.5

16 to 19 years. ............................................ 588 .3 7.1 4,794 2.8 10.7

20 to 24 years ............................................. 1,142 4.6 9.5 10,916 21.1 34.6

25 years and older ...................................... 3,773 20.9 28.4 86,512 55.6 61.7

25 to 34 years .......................................... 1,409 11.7 21.6 27,917 46.9 56.2

35 to 44 years .......................................... 1,133 24.5 32.2 28,349 59.0 64.4

45 to 54 years .......................................... 687 30.9 35.2 19,344 64.6 68.5

55 to 64 years .......................................... 338 29.3 33.7 8,804 58.5 62.5

65 years and older ................................... 205 17.6 21.5 2,098 30.4 35.7

Men ................................................................ 2,727 16.8 24.5 53,553 51.4 57.7

Women ........................................................... 2,776 13.9 19.9 48,669 47.3 55.1

Race and Hispanic origin

White .............................................................. 4,432 16.8 23.7 86,402 49.9 56.8

Black ............................................................... 755 10.7 18.3 11,744 49.5 57.5

Hispanic origin ................................................ 624 5.0 8.0 9,043 32.0 37.9

Full- and part-time status

Full-time workers. ........................................... 3,068 22.0 31.2 83,614 56.7 63.9

Part-time workers ........................................... 2,422 6.6 10.6 18,411 16.7 22.8

Educational attainment

Less than a high school diploma ..................... 645 8.2 10.7 10,275 28.3 34.6

High school graduates, no college .................. 1,340 14.0 22.7 32,788 46.3 54.0

Some college, no degree ................................ 818 16.6 21.4 19,196 51.4 58.6

Associate degree ............................................ 321 19.9 27.4 8,559 58.8 66.4

College graduates, total .................................. 1,363 28.2 38.0 25,387 67.9 73.6

Table 5.

Total

(in thousands)

Characteristic Total

(in thousands)

Eligible for

employerprovided

pension

Eligible for

employerprovided

pension

NOTE: Noncontingent workers are those who are not classified as contingent under the broadest definition of contingency. Data exclude the incorporated self-employed and independent contractors. 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.

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

could receive insurance from their employer. Respondents who said “no” to

the initial question, “Do you have health insurance from any source?,” were

their employer than are noncontingent workers, many

contingent workers obtain health insurance through family or

other sources. The very low pension coverage rates are

sponsored health insurance or pension plan. However, there

are a couple of provisos. First, how contingent workers fare

relative to their noncontingent counterparts varies by age,

educational attainment, and industry. Second, although conFootnotes

1

 The causes of the differences in earnings between any two groups 2

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

(for example, men/women, contingent/noncontingent workers) can be

very complex. The groups may differ in terms of demographics, educational attainment, occupation, employer tenure, work schedules, and so

forth. A detailed multivariate analysis is beyond the scope of this article, which merely summarizes the compensation differences among

contingent and noncontingent workers.

tingent workers are less likely to have health insurance from
30 Monthly Labor Review October 1996

Contingent W orkers—Compensation

Percent of employed contingent and noncontingent wage and salary workers with pension coverage, by

Managerial and professional specialty .................. 1,565 26.0 34.6 28,287 66.8 72.2

Executive, administrative, and managerial ............ 405 32.1 42.0 13,253 64.4 69.5

Professional specialty ........................................... 1,160 23.9 32.1 15,034 69.0 74.6

Technical, sales, and administrative support ......... 1,520 12.2 19.5 31,724 48.0 56.5

Technicians and related support ....................... 155 23.9 40.6 3,651 60.6 67.9

Sales occupations ............................................. 323 10.5 17.3 11,416 33.8 42.0

Administrative support, including clerical ........... 1,042 11.0 17.1 16,657 55.0 63.9

Service occupations ............................................. 815 5.4 9.0 14,355 27.3 33.8

Private household ............................................. 130 (1) 590 1.2 1.2

Other services .................................................. 686 6.4 10.6 13,765 28.4 35.2

Precision production, craft, and repair .................. 538 20.4 27.9 10,599 50.2 55.4

Operators, fabricators, and laborers ..................... 915 10.6 17.3 15,883 43.4 52.2

Farming, forestry, and fishing ................................ 150 (1) .7 1,375 22.3 24.9

Industry

Agriculture ............................................................ 132 (1) .8 1,241 14.7 17.8

Mining ................................................................... 18 (2) 626 62.8 69.8

Construction ......................................................... 518 17.6 22.6 4,426 31.1 35.0

Manufacturing ....................................................... 619 18.7 30.4 19,071 61.5 69.5

Durable goods ................................................... 376 19.4 33.2 11,063 64.1 72.0

Nondurable goods ............................................. 240 17.9 25.8 7,971 58.1 66.4

Transportation and public utilities .......................... 240 27.5 37.5 7,798 64.2 70.7

Wholesale trade .................................................... 97 20.6 24.7 3,878 50.2 56.3

Retail trade ........................................................... 542 4.8 8.7 17,688 21.9 30.4

Finance, insurance, and real estate ...................... 144 26.4 39.6 6,637 59.2 67.6

Services ............................................................... 2,975 13.0 19.5 35,046 48.8 55.6

Private household ............................................. 162 (1) 688 1.6 1.6

Other services .................................................. 2,813 13.8 20.7 34,359 49.8 56.7

Professional and related services .................. 1,869 19.2 26.4 25,753 58.0 64.7

Public administration ............................................. 218 41.7 49.1 5,811 86.1 89.2

Total

(in thousands)

Total

with

pensions

Eligible for

employerprovided

pension

Noncontingent workers

1Less than 0.05 percent.

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

NOTE: Noncontingent workers are those who are not classified as contingent under the broadest definition of contingency. Data exclude the incorporated

self-employed and independent contractors.

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,”

source by total employment for the same worker group.

4

 In the survey, respondents were asked, “Does (employer’s name) offer a pension or

the respondent was asked, “why not?” The response to this question was used to deterTable 6.

Total

with

pensions

Contingent workers

Total

(in thousands)

Eligible for

employerprovided

pension

Occupation and industry

Occupation

occupation and industry,February 1995

(1)

(

2)

(2)

noncontingent jobs to have, or to be eligible for, employerasked if their employer offered health insurance to any of its workers, and

mine eligibility for those not in a plan.

5

 Defined benefit pensions usually offer spousal coverage. This means that the

monthly payments are reduced, but continue as long as either spouse is alive.

 6 Pension coverage rates are calculated by dividing the number of workers

with pensions in a specified worker group by total employment for the same

worker group.

provided pensions. (See table 5.)

if they could be in the plan if they wanted.

 

3

 Health insurance coverage rates are calculated by dividing the number of

workers in a specified worker group who have health insurance from some