Trends in Occupations - Independent Contractors: Who Are We?

There were some 8.6 million independent contractors in 2001, up from nearly 8.3 million in 1995 (see curve). Men are roughly two-thirds of the total, but with women gaining as participants in this occupational category. Overall, independent contractors represented 6.4% of the workforce in 2001.

As the chart shows, increase in the number of independents has not been steady. When the economy is good, employers are more likely to hire permanent workers. In downturns employers try to save money and look to outsource some of the tasks done by former permanent employees.

Although men make up the majority of independent contractors, their numbers have been shrinking in favor of women. Interestingly, as more women became independent contractors, the number of women-owned individual proprietorships¹³ decreased by 482,000 between 1992 and 1997.

Most independent contractors are white married men, over 35 years old. They have a college education but do not necessarily have a degree. The following table shows the makeup of the independent contractor workforce by race for the years 1995 and 2001. Whites had a lower share of this workforce in 2001 than they did in 1995. Both blacks and Hispanics have increased their share. Some of this can be attributed to the overall growth of black-and Hispanic-owned businesses. By 1997, the number of black individual proprietorships increased by 153,076 since 1992. Hispanic individual proprietorships increased by 338,000 since 1992.

Independent Contractor Workforce, by Race, 1995 and 2001

	1995 (%)	2001 (%)
White	92.3	88.3
Black	5.0	7.0
Hispanic	5.2	7.2

The share of married independent contractors has been decreasing (73.5% in 1995 down to 71.5% in 1999¹⁴), while the share of never married and divorced singles has been increasing (23.5% in 1995 to 26.5% in 1999). This could be due to the decreased share of men working in this type of arrangement. Independent contractors are twice as likely as traditional workers to work part-time and their jobs are such that there is no guarantee of long-term steady income. It would be more difficult for a married man to support his family being employed in that type of job. When independent contractors do work full-time, they average 3.9 hours more a week than traditional workers. In 1999³, 15% worked more than 60 hours per week as opposed to 6% of traditional workers. This could be another deterrent to married men: more work hours mean less time spent with family.

Women, however, are three times more likely than men to prefer to work part-time in this type of work arrangement. They have a need to balance work and family responsibilities. Also, there may be a lesser need for a full-time job if the husband's income will pay most or all of the living expenses.

The next panel will show the occupations in which independent contractors work.

Sources: DiNatale, Marisa. "Characteristics and preferences for alternative work arrangements, 1999." Monthly Labor Review, March 2001. Bureau of Labor Statistics. U.S. Department of Labor. Employment and Earnings, January 2001. Data for 2001: Bureau of Labor Statistics. U.S. Department of Labor. "Table 6. Employed workers with alternative and traditional work arrangements by selected characteristics, February 2001." Retrieved January 18, 2002 from http://www.bls.gov/news.release/conemp.t06.htm; Bureau of Labor Statistics. U.S. Department of Labor. "Table 5. Employed workers with alternative and traditional work arrangements by selected characteristics, February 2001." Retrieved January 18, 2002 from http://www.bls.gov/news.release/conemp.t05.htm. U.S. Census Bureau. Economic Census, 1992 and 1997.