The freelance economy in the United States is growing, as more and more workers turn—either out of economic necessity or as a lifestyle choice—to independent contracting or gig work. Yet we have little substantive data on who freelances and why. Exactly how large is the freelancing population? What industries do today's freelancers represent? What draws them to freelancing in the first place, and why do they stick with it? What specific challenges do freelancers face, and what are policymakers doing about them?
Together with online contractors' marketplace Upwork, New York-based Freelancers Union recently released their second annual study of the freelancing ecosystem, "Freelancing in America: 2015." Based on an online survey of 7,100 working adults, independent researchers at Edelman Berland estimated that nearly 54 million Americans, or 34 percent of workers, have done freelance work in the past year—an increase of 700,000 freelancers over the 2014 total. Other key findings include an increase in the number of freelancers freelancing by choice, and a widespread dissatisfaction among freelancers with policymakers' failure to address the particular needs of the freelance economy.
I recently spoke by phone to Caitlin Pearce, Director of Member Engagement at Freelancers Union, about the report as well as about the advocacy and organizational work performed by Freelancers Union. Freelancers Union's most recent campaign, "Freelance Isn't Free," launched September 21.
To download "Freelancing in America: 2015" and for more information, click here.
ABM: Tell me about Freelancers Union. When was it founded? What is its mission?
CP: We were founded in 1995 by Sara Horowitz, who is our current executive director. She is a third-generation labor leader who comes from a long tradition of different types of unionism born out of New York City.
[Sara] was misclassified herself, when she was working as a lawyer. Freelancing was starting to become prevalent, even back then. She was an early adopter. She started Freelancers Union as an advocacy organization, to understand who this new workforce was, and what [issues they faced]. Out of that grew a whole set of institutions that we have to serve workers.
A little bit about us now: We have nearly 300,000 members nationally. [Our members] are freelancers across all industries. Our goal is to organize freelancers—workers—into a powerful political constituency with a national voice. We also organize our members in markets to help provide different services, including health insurance. We have a whole array of other benefits, [including] healthcare through our two primary care centers here in New York.
Our focus this past year, in terms of our advocacy, has been around a key issue that we've been working on for a while—nonpayment. We just launched a national "Freelance Isn't Free" campaign, which is meant to shine the light on that issue for our members, and to try to push for legislative change starting in New York City.
ABM: What does that campaign look like?
CP: We launched on September 21. Our New York City launch has a subway campaign that's still going on. We launched with a town hall, with the support of some different partners and our members.
We're working with different council members. [Freelancers] now don't have a lot of great options for when they don't get paid, or don't get paid on time. We're looking to introduce legislation that would change that.
In their latest report, Freelancers and Upwork looked at five categories of freelancers: independent contractors, diversified workers, moonlighters, temporary workers, and freelance business owners. (Upwork / LinkedIn)
ABM: You've also been collecting data about freelancers. Tell me about your new report. This is the second iteration you've produced in partnership with Upwork, right?
CP: Yes. Last year we did it just about this time as well. It's been great.
When we first partnered [with Upwork], we set out to size the workforce. We felt like there was an inadequate look at the nuance of who this workforce really is. So one of the key things we did with the first [report], which we've replicated this year, was to have a wide segmentation—[from] traditional independent contractors to small business owners, temp workers, etc.
Survey results indicates that more freelancers are freelancing by choice. (Upwork / LinkedIn)
ABM: I'd like to dig into some of the findings, beginning with motivation. Why are freelancers freelancing?
CP: Freelancing has been on the rise for some time. What we used to see was [that it was] limited to specific industries. Now we're seeing this spread across nearly every industry, and across the economic spectrum. A lot of that's reflected in our demographic data. You see a tremendous amount of diversity in who is working now as a freelancer.
One of things that's been encouraging to see, this year, was that our report notes an increase in workers who are opting into freelancing by choice rather than necessity. [That figure] is now at 60 percent, and was at 53 percent last year. So while this may have initially been more of a business-driven trend, or a larger economic structural-driven trend, we are also seeing more people who are opting into this lifestyle—because it affords them different types of advantage.
While this is encouraging, we also know that this has simply become the norm in a lot of industries. So there's a wide spectrum of experience.
One other thing—the big thing that we thought was almost outlandish—was a stat from a previous look we did, a member-oriented survey. We [found] that nearly 9 out of 10 freelancers wouldn't go back to a traditional job if they were offered one. This bears out with our membership. Whether people came to it by choice or out of necessity, we know that freelancers tend to really love doing it, despite the many challenges.
One of the questions that we developed going into this study was: How much money would it take to get you to go back? We were blown away by the fact that 50 percent of people said they wouldn't take money to go back to a traditional job. I thought [this] was quite wild, actually.
But I think the reason people are liking it, from both our experience and from the report, is that when people have flexibility from their freelance work, that's huge for them. The ability to be your own boss, to work on projects you're passionate about. This all bears out with what we see in terms of the values, and the sort of priorities that our members are setting in conjunction with the freelance lifestyle.
We see a recognition that the traditional 9-to-5 with a gold watch at the end isn't realistic these days. [At the same time, freelancers] are reframing and prioritizing around the ability to do things that are meaningful for them, work with clients that they like to work with, and have that flexibility.
Another thing that came into the report this year was the interest in mobility, and the ability for people to move to different areas as afforded to them by freelancing. I thought [that] was interesting.
Flexibility ranked high among freelancers' stated motivation for freelancing. (Upwork / LinkedIn)
ABM: The study ascribes some of the recent growth of the freelancing population to increased participation in the sharing economy. How are the rise of the sharing economy and the rise of the freelance economy interrelated?
CP: We've seen some interesting growth in the past year. There are [now] 16.6 million freelancers doing sharing economy work. [But] the vast majority of those who are participating in the sharing economy are only making small percentages of their overall income this way.
So you're still seeing it as a partial income strategy, for the most part, rather than people diving into being solely sharing economy workers. But we certainly have seen the overall number increase.
One thing that's been interesting to see this year is how much the rise of the sharing economy, and the debates around the sharing economy, have helped put freelancing on the map for a wider group of people. [This] has been a great thing, to provide a platform to start having a more meaningful dialogue about these workforce issues.
That would be our hope in the coming year: To try to move beyond some of the questions around classification—although misclassification is a key issue that we're supportive of—[to] also be thinking about, how can we make sure that this new workforce is supported?
ABM: What are the top challenges confronting freelancers, and what can we do about them?
CP: Some top concerns that our members have reflect some of the concerns in the larger workforce: wage stagnation, affordable healthcare, saving for retirement.
One of the things that jumps off the page for me as being really unique to freelancers is the new issues that it opens up around income and stability. We see this as a huge cause for concern for our members, and an additional challenge when it comes to, yes, saving for retirement, but also just making sure that you have a safety net for when times get lean.
We see, among individuals, a sort of natural feast and famine—this being greatly exacerbated when clients aren't paying on time, or don't pay at all. In terms of the economic vulnerability of these members, we're interested in thinking about ways to end nonpayment. Because we know that that's such a widespread issue among our members, as well as late payment practices where, institutionally, our members getting paid on a 30-, 60-, 90-day cycle—which is not sustainable when you have to pay the rent every month.
[We're also thinking about] ways to combat income instability, and having a more robust safety net for freelancers that is not tied to an employment position, but is tied to the freelancer, and allows them to be flexible, and allows them to put together different kinds of income streams.
The study uncovered dissatisfaction with policymakers' failure to address the particular needs of the freelance economy. (Upwork / LinkedIn)
ABM: What about policymakers? First, what have you already seen that is positive in the way of a response to some of these concerns? And where is there room for improvement?
CP: Truthfully, we see too few policymakers making an effort to truly understand the nuances of this workforce, to really be able to dig into what we need to do to support them. Certainly, with the passage of national healthcare reform, now we see freelancers who are really low earners having subsidies, which is a fantastic thing.
This political section was a new section of our report, and we weren't quite sure what to expect. The lack of response from policymakers has really been reflected in the numbers. We have 63 percent of freelancers polled saying that they want more open discussion on how to empower this workforce. Less than a quarter of freelancers believe that policy leaders were actively supporting their interests. In fact, the segment of those who felt that they were actually working against their interest was larger than the segment who felt that they were supporting [their interest]. And many just didn't know—I think that's because there's not a clear focus on freelance issues that's being spoken about.
For policymakers, this is a huge political opportunity. Eight-six percent of freelancers said they were planning to vote in the next presidential election. Sixty-two percent said they'd be more likely to vote for a candidate that supports their interest.
What's heartening for us is to see our members, and freelancers writ large, getting galvanized around freelancer issues more actively, and thinking about how policymakers are focused, or are not focused, on these issues.
ABM: What else would you like me to know?
CP: This is really the first time we did a robust demographic section [in the report]. I think that a lot of people have a misperception of freelancers as being an urban group—what Sara would call "the man-bun segment of Brooklyn."
But it really is across the economic spectrum; it's people living in urban, suburban, and rural areas; it's people across the US. It was really interesting to see the diversity, both in terms of geography, and in terms of who is taking part in this.
When we talk about sharing economy—which is of course very important—and when we talk about some of these other segments, we feel like it's our job to make people see that these are their friends and neighbors. It's people who are supporting a family doing this, and it's not just something that's an issue for some cities to figure out.
The report disproves the notion that freelancing is exclusively an urban phenomenon. (Upwork / LinkedIn)