Characteristics of Workers in Nonprofit Organizations

By Johnston, Denis; Rudney, Gabriel | Monthly Labor Review, July 1987 | Go to article overview

Characteristics of Workers in Nonprofit Organizations


Johnston, Denis, Rudney, Gabriel, Monthly Labor Review


Characteristics of workers in nonprofit organizations

The U.S. economy has been described as "two-tier' with a "split personality, languid in manufacturing but dynamic in the services sector.'1 More precisely, there is a third tier if the services are classified into for-profit and nonprofit services. The tertiary nonprofit sector contributes importantly to the dynamics of the services economy which experienced rapid employment growth between 1970 and 1985.(2) (See table 1.)

Nonprofit employment accounts for a significant portion of the service economy. It is mostly concentrated in the subsector identified in Federal Government statistics as "other services.' The other services group is a heterogeneous assembly of services that fall outside of such industries as transportation, communications, public utilities, finance, insurance, and real estate. It includes business, medical, professional, and personal services, hotels, and other industries, many of which have a nonprofit presence in varying degrees.

In response to the employment growth trends in the services sector, labor force analysts have recognized the need to distinguish between the private profit-oriented labor force and the nonprofit segments. Despite the general lack of data on nonprofit activities in Government statistics, a classification according to whether a given organization is profit-oriented or nonprofit has been introduced in other studies. Although the resultant estimates are often crude, they provide an additional dimension of description and analysis-- one that cuts across existing industrial classifications within the private service sector.

This study provides estimates of selected labor force characteristics and earnings of workers in the nonprofit service sector.3 It also examines the influence of the services themselves on employment of certain types of workers, depending on the occupational requirements, irrespective of forprofit orientation. Data are based largely on special tabulations of the 1980 Census of Population and on published data from the 1982 Census of Service Industries.4 Some noteworthy statistics are:

At least 7.8 million persons were in the nonprofit labor force in 1985.

These persons accounted for 7.3 percent of all employed workers.

The nonprofit labor force is projected to be 8.6 million in 1990 and 9.3 million in 1995.

The nonprofit labor force has been and will be growing faster than total employment over the next decade.

A nonprofit presence

A special tabulation of the 1980 Census of Population provided selected characteristics data in 23 services identified as having a nonprofit presence. But, as mentioned earlier, no direct data were available on nonprofits as such. A procedure was therefore developed in the study to analyze the characteristics based on the extent of nonprofit presence.5 In this respect, use was made of the nonprofit presence estimation in an earlier study by Gabriel Rudney and Murray Weitzman.6

Four groups of industries were identified. (See table 2.) Group 1 industries include seven services which were classed as exclusively (or almost entirely) nonprofit in orientation. Group II consists of the hospitals alone; this group was estimated to be 86 percent nonprofit in 1980. Group III is made up of five services with a preponderance of nonprofit employment ranging from 57 to 80 percent. Finally, Group IV consists of a varied group of 10 industries whose nonprofit components are below 50 percent, averaging close to 10 percent. The principle purpose of this grouping is to permit an examination of selected characteristics of workers employed in industries that are overwhelmingly nonprofit (Groups I and II) and to compare the characteristics with those of other service employees in industries with a significant profit orientation (Groups III and IV).

Table 2 shows the 23 selected industries by group and the number of persons employed in the industries in 1980. …

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