Forbes, Oct 17, 2017.
If freelancing continues to grow at its current rate, the majority of U.S. workers will be freelancing by 2027, according to projections in the Freelancing in America Survey, released today by the Freelancers Union and the giant freelance platform Upwork. The survey found that 50.9% of the U.S. population will be freelancing in 10 years if a current uptick in freelancing continues at its current pace.
The number of U.S. freelancers hit 57.3 million this year, from 53 million in 2014—an 8.1 percent increase, according to the survey. That means 36% of the U.S. workforce has freelanced this year. Meanwhile, the U.S. workforce grew from 156 million to 160 million in the same timeframe, reflecting just 2.6% growth.
“The growth of the freelance workforce is three times faster than the traditional workforce,” noted Stephane Kasriel, CEO of Upwork, in an interview. And in a sign of just how much freelancing could grow, 47% of working millennials now say they freelance in some capacity, the survey found.
Six thousand US workers responded to the survey, conducted by Edelman Intelligence, an independent research firm, in July and August.
While freelancing is a part-time or side gig for many respondents, a growing number are making a living freelancing, the survey found. In the survey, 29% of freelance respondents said their businesses are their sole source of income. That percentage rose by from 17% in 2014. The main drivers for full-time freelancers, the survey found, are freedom and flexibility.
As more people take their freelance businesses full time, the percentage of those who are doing independent work on a smaller scale is declining. The percentage of freelance moonlighters dipped from 19% in 2014 to 16% in 2017, and the percentage of part-time freelancers declined from 59% in 2015 to 53% in 2017
Not everyone welcomes the growth of freelancing. Many people are concerned about the lack of a social safety net to support freelancers once they no longer have access to employer-sponsored benefits, such as healthcare. Buying healthcare independently, even if it’s an Affordable Care Act plan, can be costly.
Given the financial challenges, one reason for the uptick in freelancing may be the increasing stability of freelance careers. In the survey, 66% of freelancers said the freelance job market has changed since three years ago. And full-time freelancers are apparently not scrounging for work– averaging 36 hours a week. Technology has made it easier to find work, according to 77% of freelance respondents.
Perhaps not surprisingly, 69% of freelancers said perceptions of freelancing as a career are improving. “It’s really becoming a normal part of the way that people work,” said Sara Horowitz, founder and executive director of the Freelancers Union.
Although freelancing has traditionally been a fallback for people who are between jobs, for many freelancers, it’s an attractive career option. In the survey, 63% of freelancers they are doing independent work by choice, not necessity—up from 53% last year. Half of freelancers said they would not take a traditional job if it were offered to them, for any amount of money.
Just don’t call them gig workers. In the survey, 49% of freelancers said they preferred the term the freelance economy to monikers such as the gig economy, the on-demand economy or the sharing economy.
However they describe themselves, more freelancers are reaching higher income levels than in the past. The percentage of freelancers making $75,000 to $99,999 per year hit 19% this year, up from 9% in 2014, the survey found. The percentage of freelancers earning $100,000 to $149,000 increased from 5% to 12% in that same period. And the highest earning group, those earning $150,000 or more, grew to 5%, up from 3% in 2014. Among the 17.2 million who said they quit a traditional job to freelance, two-thirds said they earn more on their own.
Those increased earnings contributed to total freelance earnings of $1.4 trillion, up from $1.1 trillion last year. “To me, that is a shockingly high number,” says Kasriel, who is also co-chair of the World Economic Forum’s Council on the Future of Gender, Education and Work.
Nonetheless, Kasriel said, “A 30% increase does not happen by accident. It’s a combination of more people freelancing, more of them doing it full time and more earning $75,000 and above.”
Beyond earning more, many freelancers are learning how to build their own economic security, by maintaining a varied client roster, Horowitz noted. Among freelance respondents, 63% agreed that having a diversified portfolio of clients is more secure than one client—up 10 points from last year. Freelancers averaged serving 4.5 clients per month—or 27 clients within their last six months of work.
“People view having a diversified portfolio as their security,” says Horowitz.
At the same time, traditional jobs are less secure. “There isn’t the predictability of W-2 jobs that there used to be,” Horowitz says.
Often, when people think freelancing is insecure by comparison to traditional jobs, she notes, they are comparing freelancing today to the W-2 jobs of the 1960s, not the reality that exists today. “There is a very romantic view of what traditional employment looks like,” she says.
As freelancing becomes more of a steady source of income, and traditional jobs become less predictable, there is more overlap between the concerns of freelancers and traditional workers, the survey found. “Freelancers share many of the same concerns as traditional employees, focusing on affordable healthcare, debt and the ability to save,” says Horowitz.
In a time of rapid change, many workers—both freelancers and non-freelancers—worry that their work may become obsolete. Among all workers surveyed, 54 percent of the U.S. workforce said they’re not very confident that work they do will exist in 20 years. But while 55% of freelancers are concerned about the impact of automation, in particular, on their livelihood, 29% of non-freelancers said they are.
Interestingly, freelancers are taking the lead in learning new skills. The survey found that 55 percent of freelancers participated in skill-related education in the last six months so they could stay marketable, compared to 30 percent of non-freelancers.
That may reflect the fact that freelancers’ cash-flow is affected very quickly when a particular line of work dries up. Sixty-three percent have to dip into their personal savings at least once a month to smooth over gaps, compared to 20 percent of non-freelancers. And many find it hard to save, citing obstacles such as unpredictable income (cited by 71%), short-term emergencies (41%), high housing costs (41%), short-term financial needs (39%), high healthcare and health insurance costs (33%), and high taxes (19%).
As the survey found, many freelancers are acutely aware that politicians are ignoring the needs of freelancers, who don’t have access to programs such as unemployment that might ease some of their financial pressures. In the survey, 72% said they’d be open to crossing party lines if a candidate said he or she supported freelancers’ interests. We have yet to see any national- level politicians pay real attention to what could become an avid constituency, but if half of the population actually is freelancing by 2027, independent workers will be a lot harder to ignore.
Elaine Pofeldt is author of The Million-Dollar, One Person Business(Random House, January 2, 2018), a book looking at how to break $1M in revenue in a business staffed only by the owners.