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March Jobs Report Highlights Rise In Non-Traditional Employment

AUDIE CORNISH, HOST:

What that jobs report doesn't tell us - the growing number of people who don't have traditional job arrangements but instead piece together work to make a living. We're talking about people who are part of the so-called gig or sharing economy, like, say, Uber drivers. And we're also talking about a much larger group of people who temp or freelance in sales jobs, in schools, in health care settings, to name a few. Princeton economist Alan Krueger has been studying this and joins us now.

Welcome to the program.

ALAN KRUEGER: My pleasure. Thank you.

CORNISH: You found in your research that all of the net employment growth in the U.S. economy from 2005 the 2013 essentially occurred in these alternative work arrangements. Tell us about the trend.

KRUEGER: Well, over the decade from 2005 to 2015, about 9.1 million jobs were created overall. And we find that this alternative category increased by 9.4 million, 9.5 million in that period. So basically all of the net employment creation over this long decade has occurred in the alternative employment sector.

CORNISH: I mentioned Uber in our introduction. Do you know just how much of this work actually comes from those kind of online, short-term job apps?

KRUEGER: Small. Only about half a percent of U.S. employment is in what I would call the online gig economy -- companies like Uber or TaskRabbit, where workers choose their own hours and they provide services through these intermediaries. We find that there's been growth, but from an extremely low level. These jobs didn't exist a decade ago. Far more important development for the U.S. labor market is the growth in contract jobs - employees who are working for one company and contracted out to provide services at another one, such as janitors or cafeteria workers, or we found, increasingly, higher paid workers are now being contracted out, such as payroll jobs.

CORNISH: You know, when I think of traditional full-time work, it provides people with health care, sick leave, you know, additional benefits. What are the consequences of the growth in these nontraditional short-term jobs?

KRUEGER: I think that there is reason for concern that we've seen so much growth in this segment of the economy, but it's not all necessarily bad. So it has grown, I believe, for a mixture of reasons. One reason is companies have been trying to reduce costs so they took traditional employees, like janitors, who they were paying reasonably well, and they contracted that work out to companies that pay the janitors less well. And I think that's a development that is concerning. But other factors also have been playing a role. For example, work has become more standardized, easier to monitor. That means that there can be some efficiency advantages from contracting out. And then thirdly, there are workers who prefer the flexibility. Uber drivers, for example, overwhelmingly say that the flexibility of being able to work a few hours here, a few hours there when they have available time is appealing to them, and I think that's true for many freelancers.

CORNISH: But can we dig into this a little more? Because we are also experiencing an election where jobs and the quality of the jobs people have, it's really affecting the electorate, and people are really talking about this in the campaign. And, I mean, how are these workers handling the downsides of this structure?

KRUEGER: I think this is a very important issue for the American public. The fact that more work is being done in alternative work arrangements means that workers are responsible for more of their safety net. It also means they're subject to more volatility, more shocks. And I think it's important that they and we as a society help to prepare for that. On the other hand, when it comes to the election, I think you need to draw a distinction between a longer-term trend and the improvement in the economy that we've seen over the last four or five years. And today's jobs report, I think, is another indication that the economy is strengthening.

CORNISH: Alan Krueger is professor of economics and public affairs at Princeton University.

Thank you for speaking with us.

KRUEGER: Thanks for having me. Transcript provided by NPR, Copyright NPR.