Some professionals are thrilled to be their own bosses, but on-call and temp workers are still struggling.
You’ve probably heard it said that the so-called “gig economy” is changing the nature of the American workforce—more for the worse, perhaps, than the better. Faced with post-recession unemployment and the wholesale disruption of many once-stable industries, more workers are freelancing and turning to “alternative” employment strategies to cobble together their livings, be it through Uber, Craigslist, professional contracts, or seasonal gigs. Even when they’re relatively well paying, freelance jobs aren’t often considered particularly desirable, since they often come without benefits and aren’t well recognized or protected by federal employment (and unemployment) programs.
But as the economy improves, the amount, perception, and desirability of freelance work seems to be changing—at least for certain kinds of gigs. Results from an online survey of roughly 6,000 working Americans by the online freelance job-board Upwork and the national Freelancers Union suggest that 55 million people, or roughly 35 percent of the U.S. workforce, made money by freelancing in 2016—up from 53 million in 2014 (the year of the organization’s first joint survey). That includes independent contractors, folks with multiple sources of income (like a part-time job, plus an Airbnb rental), moonlighters, freelance business owners, and temps. The cumulative growth among these job types doesn’t seem to driven solely out of necessity: According to this survey, fully 63 percent of freelancers said that they started freelancing out of choice, up 10 points since 2014. A majority also said that they saw having a “diversified portfolio of clients” as more stable than having a single employer. And about half of them said that there was “no amount of money” that could convince them to take a traditional job.
“That sounds shocking—and maybe $1 billion would do it,” says Upwork CEO Stephane Kasriel. “But people are choosing to do this themselves. It’s becoming more desirable, and more acceptable.”
The world of freelance work seems to have two faces, though—on one, it’s professional workers who are happy to be there. On the other, it’s folks who might be scraping by somewhat miserably.
If you’re a full-time freelancer of the sort Upwork primarily serves—consulting with marketing companies, whipping up custom web sites—things seem to be pretty great. These workers enjoy flexible hours, adequate pay, and the ability to change locations freely. But this appears less true for part-time freelancers, who might be taking temp jobs, responding to last-minute gigs, or grabbing contract work when they can, often while juggling the demands of a primary job.
Out of the top 10 reasons for freelancing, the survey found that the single most motivating factor for these part-timer freelancers was to earn extra money, whereas for full-timers, that primary reason was to “be their own boss.” Fully 87 percent of full-time freelancers agreed with the statement that their work “provides flexibility to work when I want,” compared with just 40 percent of part-timers; 85 percent of full-timers say that freelancing “allows me to control my own destiny,” compared to 55 percent of part-timers.
The Upwork/Freelancers Union survey only divided up findings by part-time and full-time freelancers, and non-freelancers. But another recent study offers a more nuanced look at the state of “alternative” employment. In a working paper published in September by the National Bureau of Economic Research, the Harvard and Princeton economists Lawrence Katz and Alan Krueger conducted a similarly sized online survey of workers. They defined “freelance” by narrower terms, using a one-week reference period rather than an entire year. By those metrics, they found that the number of American workers working as independent contractors, running freelance businesses, and doing secondary, temp, and on-call jobs was 24 million, or about 16 percent of the workforce, in 2015. By their accounting, that’s up 11 percent in February 2005.
Katz and Kruger also tried to assess the level of satisfaction that these workers have. They found that of all the independent contractors and full-time professional freelancers who responded, more than 80 percent indicated that “they prefer such an arrangement to being an employee.” But they also found that “the vast majority of those employed by temporary help agencies on temporary jobs would prefer a permanent job, and almost half of on-call workers would rather have regularly scheduled hours.”
They also found that workers across the “alternative” employment spectrum are working considerably fewer hours per week than traditional employees. But this, too, seems to be occurring out of economic necessity for temp and on-call workers far more than it is for independent contractors and self-employed professionals. Even if they’re counted as “freelancers” by Upwork, temp and on-call workers are still bound to the whims of employers. They’re not truly “free.”
The Upwork/Freelancers Union survey also polled workers about the kinds of policy changes they’d like to see for freelancers, including easier access to health and retirement benefits as well as stronger protections in the event that their clients don’t pay. Sara Horowitz, the founder and executive director of Freelancers Union, says that because cities are hubs for freelance jobs (New York, San Francisco, Los Angeles, Miami, and San Diego are the top-five gig-economy cities, according to earnings data collected by Upwork), municipal governments should be helping to evolve financial services and resources built especially for these non-traditional workers. Local governments might also have a strong role to play in protecting the most vulnerable “freelancers” from the whims of erratic scheduling and from corporate employers that routinely withhold wages from contract workers.
What both of these surveys make abundantly clear, as well, is the need for a new taxonomy of terms to describe these emerging fields of labor. “Freelancing” is now such a wide descriptor that it has become meaningless; we need a word for happy independent contractors that’s different from the one for unhappy temps yearning for traditional employment.
And then we need a clear, consistent, fine-grained data on the trajectories and growth of these groups of very different workers. The Bureau of Labor Statistics, the country’s gatekeeper for all employment data, hasn’t done a special survey tracking nonstandard work relationships since 2004—in spite of the fact that the Department of Labor has called the “tremendous expansion” of contingent workers “an area of concern.” Even as employment numbers improve, more Americans are working outside of traditional 9-5 jobs, and more will continue to in coming years. To begin to protect the most vulnerable among them, and help bolster the success of the most contented, we’ll need better words and numbers.