Economics

One-Third of Americans Are Freelancers Now

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Large image on homepages | pejrm/Flickr
(pejrm/Flickr)

A new report shows some 53 million Americans—or 34 percent of the U.S. workforce—are now working as freelancers in some capacity. "This is more than an economic change," asserts the report, a joint effort from the Freelancer's Union and freelance markeplaces oDesk and eLance. It's also "a cultural and social shift" that will "have major impacts on how Americans conceive of and organize their lives, their communities, and their economic power." 

The first and last time anyone looked at the freelance worker population in the U.S. was 2004, in a report from the Government Accountability Office (GAO). Back then the GAO turned up about 42 million "contingent workers," a group that included folks we would normally think of as freelancers but also all part-time workers. "It was a solid, if not particularly nuanced, effort," as the writers of the new report put it. For their purposes, they defined freelancers as "individuals who have engaged in supplemental, temporary, or project- or contract-based work in the past 12 months" and further broke the group down into five categories: 

  • Independent contractors (21 million). This group hews closest to our "traditional" idea of freelancing: individuals whose main source of employment involves working on a project-to-project basis in their field. They make up about 40 percent of freelancers.
  • Moonlighters (14.3 million). These are individuals who work regular full-time jobs and also do some amount of freelance work. This group includes 27 percent of freelancers. 
  • Diversified workers (9.3 million). These are our serious hustlers, the folks pulling in income from multiple sources, including traditional employment and freelance work. A diversified worker may have a 20-hour per week bartending or retail job and supplement her income with freelance graphic design work and some time as an Uber driver. This group makes up about 18 percent of freelancers. 
  • Temp workers (5.5 million). Temp workers are those working with a single employer, client, job, or project but on a temporary basis. This could be "a business strategy consultant working for one startup client" (the report's example) or a recent college graduate doing grunt or admin work for different companies each week through a temp agency. They make up about one-tenth of freelancers.
  • Freelance business owners (2.8 million). This group includes people employ between one and five others and who consider themselves both freelancers and business owners. They make up 5 percent of the freelance economy. 

A few more key findings about the freelance population in general: 

  • 77 percent say they make as much or more money now than they did before becoming a freelancer
  • About half (53 percent) say going freelance was totally their preference; the rest say it was out of necessity. 
  • The main reason people take on freelance work is to earn extra money (68 percent), followed by the ability to have a flexible schedule (42 percent). 

When it comes to millennials, we see an even more freelance-heavy generation. About 38 percent of those under age 35 are freelancing, compared to 32 percent of those 35 and older. Millennial freelancers are also more likely to look for job with a "positive impact on the world"—62 percent of the younger group said this was important, versus 54 percent of older freelancers. Finding freelance work that's "exciting" is also more important (62 percent versus 47 percent). 

I'm happy to say that this all squares up with what I wrote about millennial workers for Reason's latest (and millennial-themed) issue. And I'm also glad someone's dug a bit deeper into the demographics of freelance workers (with all due respect to the 2004 report, a few little things may have changed since then). To its credit, the new report remains relatively agnostic about whether these updated employment realities are better or worse than the previous paradigm(s), an agnosticism I share. There's just no use crying over a culture and economy we won't get back. What matters is what is happening now, why it's happening, and how adjust our political and cultural expectations to accommodate it. And to the first two points, this new report provides some valuable and long overdue data.