The rise of Uber, Lyft, Task Rabbit, Elance and other online labor marketplaces, combined with employers’ desire to lower payroll and insurance costs, has driven up the number of people cobbling together a living from freelancing. According to a survey released this week by the Freelancers Union together with freelance platform Elance-oDesk, 53 million Americans, or 34% of the population, qualify as freelancers.
Not all of them make their living exclusively as freelancers. The number includes 14.3 million workers who would be called “moonlighters”—people who have a primary, traditional job that pays benefits, and supplement their income with extra work, like a full-time tech support worker at a corporation who also does consulting with private clients on the side or a web developer who takes on projects for non-profits in the evening.
Of the remaining 38.7 million, 21.1 million are what the survey calls “traditional” freelancers who do temporary work on a project basis. Some 9.3 million have multiple sources of income which can include a part-time job like working 20 hours a week at a dentist’s office. Another 5.5 million are temporary staffers who work for a single employer but not on a permanent basis that comes with benefits, like a business strategy consultant working for a startup on a contract that can include months of employment. Then there are the 2.8 million business owners who have between one and five employees, like my friend Cynthia Cross who does boutique market research through her Hagen/Sinclair Research Recruiting, which puts together focus groups and interviews for clients including Samsung, Wellpoint, Google and AT&T.
The last time the government took a tally of freelance workers was in 2006 when the Government Accountability Office produced a report that found that 31% of American workers were employed on some kind of contingent basis, including as freelancers, part-time or temporary workers.
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The Freelancers Union survey, conducted in July with an online questionnaire it put to 5,050 workers over age 18, including 1,720 who identified themselves as freelancers, paints the freelancing trend in upbeat colors. Founded in 2003 as a nonprofit group that provides portable health, dental, disability and life insurance in addition to retirement accounts through its for-profit Freelancers Insurance Company, it has 250,000 members nationwide. “Freelancing is the new normal—and this survey shows that America’s new workforce is big, crucial and here to stay,” said Sara Horowitz, founder and executive director of the Freelancers Union in a statement. Given its for-profit insurance arm, the group has reason to claim the trend is a positive one.
According to the union’s data, freelancers are enjoying an increase in demand for their services, with 32% saying that their workload has increased over the last year. Other positive trends, according to the survey: Some 65% said freelancing as a career path is more respected today than it was three years ago. More than a third, or 38%, said they expect their hours to increase in the next year. Also a greater share of Millennials are working freelance, with 38% of those under 35 saying they do freelance work. Elance-oDesk, which collaborated on the study, bills itself as “the world’s largest online workplace,” with 2.5 million businesses and 8 million workers using its platform. Headquartered in Mountain View, CA, like the Freelancers Union, it has a vested interest in putting a silver lining on the freelancing trend.
In the same vein, another work platform for independent contractors, Minneapolis-based Field Nation, released a survey this week showing that freelancers are more engaged with their work than what it calls “full- and part-time W2 employees.” Though the sample size was small, just 846 people who filled out a questionnaire, Field Nation is broadcasting the following: 90% of independent contractors “view themselves as deeply committed to the work they do for their clients.” Those workers, it says, are three times more engaged in their work than the 30% of W2 workers who said they feel engaged.
Meanwhile, the progressive non-profit group National Employment Law Project released a report this week, Temped Out: How The Domestic Outsourcing of Blue-Collar Jobs Harms America’s Workers, that explores the dark side of contingent work. It focuses on the 12 million people who got jobs through staffing agencies last year. Though NELP’s focus is on blue collar workers and it tallies its numbers differently from the Freelancers Union, Rebecca Smith, the report’s co-author, says the report’s findings extend to many of the jobs highlighted by the Freelancers Union.
The focus of NELP’s study is the spread of temporary work to areas of the economy like manufacturing and warehousing, where workers were traditionally full-time and often unionized, with full benefits and good wages. Now that those workers are temporary, employers are paying median wages that are 22% lower than in the overall economy, according to NELP’s research. Says Smith, “Staffing agencies not only fail to provide livable wages, benefits or job security for their workers, but their influence in an industry can lower standards for all workers in that industry.” When a worker has an issue, it’s not clear whether the staffing agency or the top-line company is responsible for setting wages or controlling working conditions.
The NELP report highlights the conditions faced by several workers who got their jobs through staffing agencies, like David Fields, a 45-year-old father of four who worked for staffing agency LINC Logistics in a Walmart consolidation center in Hammond, IN, where he toiled outside in sub-zero temperatures on a warehouse loading dock during the Christmas rush. “It’s dangerous to move heavy equipment when you can’t feel your hands and you’re walking on ice,” Fields told the NELP researchers. “But as temp workers, we were expendable, so we just kept on working.” Fields wound up organizing fellow workers and presenting a petition to LINC and Walmart, which put a turbine heater on the dock and granted workers warm-up breaks. The vast majority of workers who are employed through staffing firms are not as successful, says Smith.
What seems clear: The pendulum is not going to swing back toward traditional work arrangements. Lawmakers will have to grapple with the fact that old labor laws do not necessarily apply. Robert Reich, the secretary of labor during the Clinton administration, who is now a professor at the University of California, Berkeley, talked to The Wall Street Journal earlier this week, and observed that independent workers “don’t have the workforce protections that have developed over the last 80 years. They are simply on their own.”
