Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a University Professor and Director of Cities at the University of Toronto’s Martin Prosperity Institute, and a Distinguished Fellow at New York University’s Schack Institute of Real Estate.
The metros and occupations where independent workers earn the most.
Writing in The Atlantic back in 2011, Sara Horowitz, the founder of Freelancers Union, dubbed the "freelance surge" the "Industrial Revolution of our time" — as significant a shift in employment patterns as has been seen since the transition from agriculture to industry in the 1800s.
A recent report estimates that there are about 17 million full-employed freelancers, or independent workers, a number than swells to more than 40 million, roughly a third of the workforce, when you include temps, part-timers, contractors, contingent workers, and those who are under-employed or work without employer-sponsored health insurance, 401Ks or FLEX accounts, according to a post by Whitney Johnson in the Harvard Business Review.
For obvious reasons t's hard to get detailed geographic data on freelancers, but we can get very good figures on the number of Americans who are self-employed.
• • • • •
Slightly more than 10 million American workers, or seven percent of the workforce, are self-employed, according to estimates compiled by Rob Sentz and his colleagues at Economic Modeling Specialists (EMSI, for short). EMSI's figures are based on data from the United States Census (American Community Survey and Non-employer Statistics). More than four million (43 percent) of those self-employed workers are members of the creative class of scientists and technologists, knowledge workers and professionals, artists, designers, entertainers, and media workers.
|Total U.S. Self-Employed by Occupation|
|Occupation||Total Self-employed||% of Total||
|% of Occupation|
|Construction & Extraction||1,511,354||14.9%||0.0%||22.6%|
|Building & Grounds Cleaning||1,023,038||10.1%||4.0%||17.6%|
|Arts, Entertainment, Media||689,945||6.8%||1.0%||26.7%|
|Business and Finance||478,665||4.7%||2.0%||6.9%|
|Transportation & Material Moving||442,169||4.4%||1.0%||4.7%|
|Installation, Maintenance, Repair||354,917||3.5%||0.0%||6.4%|
|Office & Administrative||307,221||3.0%||-1.0%||1.3%|
|Education, Training, Library||208,360||2.1%||5.0%||2.4%|
|Computer & Mathematical||115,831||1.1%||3.0%||3.1%|
|Food Preparation &Serving||90,789||0.9%||2.0%||0.8%|
|Architecture & Engineering||84,974||0.8%||-1.0%||3.4%|
|Life, Physical, Social Science||76,924||0.8%||3.0%||6.2%|
|Farming, Fishing, Forestry||60,228||0.6%||-3.0%||5.5%|
|Community & Social Service||49,014||0.5%||6.0%||2.1%|
There is tremendous variation in self-employment across occupations, as the table above shows. The occupations that account for the most self-employed people include a mix of higher-skill knowledge and creative work and lower-skill service work: construction and extraction (1.51 million), sales (1.26 million), personal care (1.26 million), management (1.24 million), and building and grounds cleaning (1 million).
There are several occupations where self-employed workers make up a much higher proportion of workers. These include: arts, entertainment and media, where more than one in four workers are self-employed (26.7 percent), and personal care (22.8 percent), construction and extraction (22.6 percent), legal (17.9 percent), and management (16.2 percent) – all more than twice the national average.
Median Hourly Wage
Median Hourly Wage
|Healthcare Practitioners and Technical||$49.66||$34.38|
|Life, Physical, and Social Science||$32.17||$30.42|
|Architecture and Engineering||$26.75||$35.56|
|Business and Financial Operations||$25.83||$29.80|
|Computer and Mathematical||$24.67||$36.18|
|Community and Social Service||$19.41||$19.93|
|Office and Administrative Support||$18.68||$15.73|
|Arts, Design, Entertainment, Sports, & Media||$16.19||$20.76|
|Sales and Related||$15.17||$15.73|
|Education, Training, and Library||$14.54||$22.48|
|Transportation and Material Moving||$14.38||$14.88|
|Construction and Extraction||$13.62||$18.99|
|Installation, Maintenance, and Repair||$12.68||$19.71|
|Farming, Fishing, and Forestry||$12.35||$10.98|
|Building and Grounds Cleaning||$9.95||$11.10|
|Food Preparation and Serving||$9.37||$9.71|
|Personal Care and Service||$8.58||$10.37|
While many extol the virtues of self-employment, others argue that such work is not only less secure, but that it pays less than regular employed work in similar fields.
The table above compares the median hourly wages of self-employed workers to employed workers for major occupations. In general, self-employed work does pay somewhat less per hour than traditional employed work, but the pattern does vary.
Self-employed workers make a median hourly wage of $15.63, compared to $20.10 for all standard employed workers.
While self-employed members of the creative class take home more money than self-employed workers in general, the gap is bigger among creative class workers: creative class freelancers take home $21.62 per hour in median wages compared to $31.86 for traditionally employed members of the creative class.
Among professional and knowledge workers, self-employed managers make a great deal less, while self-employed lawyers, architects and engineers, artists and entertainers, computer scientists and mathematicians make somewhat less than their counterparts. Self-employed healthcare practitioners make more. Self-employed workers in low-skill service and blue-collar fields, generally speaking, earn less than their counterparts in regular employment.
The wages for self-employed workers vary considerably by occupation from a high of nearly $50 dollars an hour for health care practitioners to a low of less than $10 dollars an hour for personal care and service workers. Self-employed workers in six occupational categories — all professional, knowledge and creative work — average $25 dollars an hour or more: healthcare practitioners ($49.66); legal ($37.04); life, physical and social science ($32.17); architecture and engineering ($26.75); business and financial operations ($25.83); and computer and mathematical occupations ($24.67). Self-employed workers in arts, design, entertainment and media workers average just $16.19 per hour, comparable to workers in several lower-skill service fields. On the opposite side of the ledger, self-employed workers in three occupations — building and grounds cleaning; food preparation; and personal service workers — average less than $10.00 per hour.
• • • • •
But what is the geography of self-employment? Where do the largest shares of self-employed workers live and work? Which metros and regions have the highest shares of them? And where do self-employed workers earn the most?
To get at this, EMSI ran the numbers for America's 50 largest metros. The Martin Prosperity Institute's Zara Matheson mapped the patterns for all self-employed workers and those that are members of the creative class.
The first map (below) shows the percent of the workforce that is self-employed for the 50 largest metros. There is considerable variation. The leading metros have as many as 11.6 percent self-employed; the lowest just 3.5 percent.
Riverside is first with 11.6 percent, followed by Los Angeles with 10.1 percent. Miami is third with 9.3 percent, San Francisco fourth with 9 percent, and Sacramento comes in fifth with 8.4 percent. Portland (8.3 percent), San Diego (8.1 percent), Houston (7.8 percent), Nashville (7.7 percent), and Memphis (7.6 percent) round out the top 10. On the opposite side of the ledger, self-employed workers make up less than 5 percent of the workforce in Baltimore (4.8 percent), Richmond (4.7 percent), Milwaukee (4.5 percent), Salt Lake City (4.2 percent), Virginia Beach (4.1 percent), and Buffalo (3.6 percent).
The second map (above) shows the percent of the self-employed creative class workers for the 50 largest metros. Riverside again tops the list with 14.3 percent, followed by L.A. with 13.2 percent. Miami (11.8 percent) is third and San Francisco and San Diego (both 11.6 percent) share fourth place, followed by Portland (11.2 percent). Las Vegas, Nashville, Sacramento, and New York round out the top 10. At the very bottom of the list, are Milwaukee (5.8 percent), Richmond, Virginia (5.7 percent), and Salt Lake City (5.7 percent), Virginia Beach (5.3 percent), and Washington, D.C. (5.2 percent).
The third map charts wages for self-employed workers for the 50 largest metros. San Jose tops the list with self-employed workers earning a median wage of $30.75. Washington, D.C. has the second highest median wage with $28.42. San Francisco ($26.68) and Boston ($25.03) also have median wages above $25 dollars an hour. New York is fifth with a median wage of $24.74. At the other end of the spectrum, Orlando has the lowest median hourly wage for self-employed workers ($17.41). Self-employed workers in San Antonio ($17.87), Oklahoma City ($17.91), and Memphis ($17.96) also have a median wage of less than $18 dollars an hour.
The final map displays the median hourly wage for self-employed creative class workers for the largest 50 metros. San Jose again tops the list, with a median wage of $26.42. Washington, D.C. ($25.55) is second, Boston third ($25.39), Philadelphia fourth ($25.21), and New York fifth ($25.10). San Francisco ($25.02), Houston ($24.64), Birmingham, Alabama ($24.21), Austin ($24), and L.A. ($23.50) round out the top 10. Again Orlando has the lowest median wage with $16.88. Riverside, California ($17.88), Tampa ($18.06), Jacksonville ($18.23), and Buffalo ($18.99) round out the bottom five metros.
• • • • •
It's high time we temper the the mythology of freelance work with a dose of reality. While the popular image of self-employment is technology or knowledge working free-agents, the reality is that the ranks of the self-employed are populated by a mix of high-skill knowledge work and low-skill, much lower wage service work. Not only do they often earn less money, self-employed Americans lack the basic protections and security that workers and a middle-class society require.
Given the flexibility that has come along with the knowledge and service-based economy and the preference many Americans have for doing their own thing, it will be next to impossible to go back to the old system of long-term employment tenure in "real jobs" of the past. The number of full-employed independent workers is projected to swell to 30 million in the next decade and the total number of freelancers could reach as many as 70 million when as much as half of the workforce could be involved in some sort of freelance work. What's more, 57 percent of freelancers chose to go independent in 2012, as Johnson reports, and only 13 percent say they want to go back to traditional employment.
What's needed is nothing less than a new social compact which reflects the new realities of work. As Horowitz points out in her Atlantic piece:
The basics such as health insurance, protection from unpaid wages, a retirement plan, and unemployment insurance are out of reach for one-third of working Americans. Independent workers are forced to seek them elsewhere, and if they can't find or afford them, then they go without. Our current support system is based on a traditional employment model, where one worker must be tethered to one employer to receive those benefits. Given that fewer and fewer of us are working this way, it's time to build a new support system that allows for the flexible and mobile way that people are working.