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America is Turning into a Nation of Freelance Workers

By Amanda Alix - Sep 7, 2014 at 7:01PM

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More than one-third of U.S. workers are freelancers. Is this good news, or bad -- or a bit of both?

A new study by the Freelancers Union and Elance-oDesk highlights an interesting change in the way Americans work. More than one-third of U.S. workers have joined the ranks of the freelancer – independent contractors who sell their expertise, hopefully, to the highest bidder.

This change, at least in part, has been prompted by the Great Recession. The last time the pulse of the freelance worker was taken was in 2006, when the U.S. General Accountability Office estimated that 31% of workers fit that description.

What are the ramifications of such a workforce, where 34% work on the fly, without the restrictions of cubicle walls – but also lack the workplace benefits the majority still enjoys?

Back in the day, things were different
The change to contractor status has been inching along over the past 20 years or so, but has ballooned since the GAO report eight years ago. The agency noted that 3 million people became contract workers between 1995 and 2005, bringing the total employed as freelancers to 42.6 million. Currently, the Freelancing in America study estimates this number to be 53 million.

Who are freelancers? Independent contractors fit the bill, as well as temporary workers, part-time moonlighters, and even some business owners. They are a diverse lot, which is nothing new; the GAO report pointed out nearly 10 years ago that many contingent workers labored in construction, retail and various services industries. 

The post-recessionary workforce
There is little doubt that the Great Recession altered the employment picture, perhaps forever. One change is the proliferation of part-time workers since the recession, as employers scrimp on payroll expenses and save on scheduling costs. Approximately 7.5 million people work part-time involuntarily, mostly because they cannot find full-time work.

Likewise, many become freelancers for the same reason – and the type of work obtained in this manner has changed since the GAO report, as well. College professors are often hired on an adjunct basis these days, and even many lawyers have been relegated to the ranks of contingent workers. Many complain of low wages and poor working conditions.

Freelancing: a way of life
For others, the choice to work as a contractor is completely voluntary. The Freelancing survey notes that the Internet has been a boon to freelancers, who make targeted use of social networks in order to find work. A recent study by Staffing Industry Analysts shows that 10% of employers who use contract workers plan to use online staffing within two years, up from the 3% who planned to do so in 2013. 

This will certainly make it easier to find work, but what about the pay? The Freelancing poll found that 77% reported making at least as much money freelancing as they did in the conventional workforce – and 42% said they make even more. 

In addition, the freedom that comes with freelancing is a big draw, as evidenced from the comments at the end of the survey. And, while freelancing is often associated with stay-at-home parents, this style of working has broadened its appeal considerably: Many millennials are big advocates of the freelancer lifestyle, having begun their working lives during the freelancing boom.

Baby boomers are also taking part, as many financial advisors now suggest that boomers in their fifties start freelancing businesses in order to have a flexible source of income during retirement.

Even as the employment situation brightens, freelancing appears poised to continue its growth, as more workers across all age groups recognize the rewarding – and often lucrative – features of the freelancer's lifestyle.

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