You aren’t imagining it, freelancing is growing
If you got everyone attempting to quantify the freelance economy in one room, there is probably only one thing we would all agree on: We’re all talking about it differently.
At the crux of this issue is the definition of the freelance economy and who should be counted among its ranks. Terms from “gig economy” to “free agent nation” to “the freelance economy” and “on-demand work” are being tossed around, all with slightly different connotations. Trying to use one term for the multitude of different ways to work and find work that exist today is bound to be misleading.
Pew Research Center recently released an analysis of historical census data of the self-employed. While Pew’s objective was largely to quantify the number of jobs generated by self-employment, commentary on it focused on its finding that self-employment is declining — when measured by responses to the either/or question on self-employment that is in the Current Population Survey.
Articles, including this Wall Street Journal article, chimed in that the Pew study’s finding indicates the gig economy isn’t growing. The WSJ opens by saying:
“… data in the report exposes one of the more perplexing mysteries about the modern economy: Despite all the discussion that the U.S. is transforming into a gig economy, the share of people who say they’re self-employed is declining.”
And so there is a need for additional research, which the WSJ article goes on to essentially call for, saying “for now, the best surveys puzzlingly suggest fewer workers each year, not more, who are self-employed.”
“The self-employed measure is notoriously problematic,” NYU Stern School of Business Assistant Professor and Labor Economist John Horton explained as we were discussing this challenge. “For example, this is also the classification used to define entrepreneurship. Most of the hand-wringing about declining entrepreneurship is that this number is falling. But the self-employed category is a very big net — it catches traditional sole proprietors (think of a plumber or long-haul truck driver) and Silicon Valley-style entrepreneurs as well as freelancers. With so many types of work happening under one category, it’s probably not surprising that it seems to generate inexplicable trends.”
It is clear that a better understanding of self-employment and research on where it fits in within the overall workforce is needed, so for the past two years, my company (Upwork, the leading freelance talent marketplace) and Freelancers Union have co-sponsored “Freelancing in America: 2015.” The study’s primary objective is to capture the varying work arrangements that exist today in order to quantify all freelance activity among American professionals.
The “Freelancing in America” findings help round out the census self-employed numbers and Pew’s analysis of them. Here are relevant highlights:
Freelance activity is growing
- The number of hours spent freelancing by the average U.S. professional (who is freelancing) went up from 15 to 18.6 hours per week in the past year.
- By more than 2 to 1, freelancers say the demand for their services has increased in the past year rather than decreased.
- Some of this increase in freelancing can be linked back to technology — roughly 3 in 4 freelancers agreed that technology has made it easier to find freelance work.
- Another study, “The State of Independence,” also found that the amount of revenue contributed to the U.S. economy by independent professionals is up 26% since 2011.
The number of people engaged in some form of freelancing is larger than the number solely engaged in self-employment:
- Looking at the most comparable segments of freelancers, “Freelancing in America” estimated there are 2.5 million freelance business owners and 19.3 million independent contractors, equalling a combined 21.8 million, versus the census report of 14.6 million self-employed that the Pew analysis is based upon.
- The freelance economy is more than just the self-employed. If you add in other nontraditional types of work such as moonlighters and diversified workers (where some has one or more side businesses in addition to employment), the total number of Americans who freelanced last year came out to an estimated 53.7 million. Though the core of the economy is the full-time independent professionals, part of its appeal is that work no longer needs to follow the cut and dried model of all or nothing, employed or not, working like hell or on the beach. People can give however many hours they have while raising a family, going to school, traveling, enjoying retirement… and the list goes on. The diversity of work arrangements today is a thing of beauty — it represents more freedom to work when, where and how we want.
Looking at older data can be misleading. While the numbers of self-employed in areas such as agriculture are decreasing, the number of people choosing self-employment in highly skilled industries is increasing, as noted in this Harvard Business Review article and the Bureau of Labor Statistics’ own projections. In addition, more than half of Americans who are doing freelance work started doing so within the past three years according to “Freelancing in America.” Our attitudes towards work are changing rapidly. Technology has given rise to more flexibility and in the process people are embracing this flexibility to create workstyles that fit how they want to live. It’s the rapidly emerging broad spectrum of workstyles today that makes quantitative measurement so tricky. Today’s professional existence is less about “lifestyle” and more about how you create your “workstyle.”
As time goes on, we’ll get better about measuring by the numbers, but qualitatively today I don’t think anyone would disagree that the freelance economy is more vibrant than ever. I saw it when the woman sitting next to me on a flight turned out to be a voice talent freelancer previously based in LA who now works remote from Portland. I saw it again when my Lyft driver turned out to be a retired professional who enjoys driving to hear people’s’ stories. I also see it in the blossoming of coworking spaces, which are so packed that they’re opening swanky new locations like this WeWork office that just opened in an old customs house.
And so as Justin Fox of BloombergView wrote: “You weren’t totally imagining it! There really is a fast-growing contingent of Americans who get by on a variety of employments, none of them a full-time traditional job…”
Based on their responses to “Freelancing in America,” freelancers themselves predict a growing freelance economy: 82% responded that they believe there will be more opportunities for freelancers in the future, and more than three-quarters (78%) said they would be likely to recommend freelancing to their family and friends. And millennials, an ever-growing portion of our workforce and a generation used to the flexibility and location-independence born of technological innovation, are even more optimistic about freelancing.
I myself reinvented my workstyle this year by moving from our corporate offices in California to Portland, Oregon. I’m now remote and often work among a vibrant community of freelancers here in coffee shops and coworking spaces. I may not be a freelancer, but with the help of a very supportive company, a few gadgets and connectivity, I broke away from the traditional work model of a local commute and 9-to-5 workday like many others are choosing to do.
Have you or anyone you know broken away from traditional work barriers? Creating your own workstyle is an empowering thing to do, and I’d love to hear your story in the comments if so.