Why Independent Contractors Are Important

The number of open positions in construction has been growing since the depths of the recession.

In recent years there has been discussion of limiting or eliminating independent contractor status for workers in the United States, an option currently protected by federal tax law.

Such a change would be costly for home builders and other small businesses, who rely on independent contractors to provide services that are not used in a large enough quantity (or over a sustained period of time) to justify a full-time position within their business.

JOLTS data examines the amount of job turnover, an indicator of labor markets for which independent contractor rules make economic sense.

Clearly, the construction sector has a larger hiring rate than the economy as a whole over the entire period. The effects of the Great Recession can be seen in a reduced hiring rate over the 2006-2009, with a small rebound occurring recently.

Given the dramatic job losses in the residential construction sector (more than 1.4 million), a small nominal number of hirings in today’s environment produces the same hiring rate as a larger number would have six years ago.

– Courtesy of NAHB