Are Freelancers Making Bank?

IMG_4539

In May of 2002, a book entitled ‘Free Agent Nation: The Future of Working for Yourself’ was released to much acclaim. In it, author Daniel Pink coined the term ‘free agent’ to reflect  movement towards an economy dominated by freelancers and the self-employed. His message was revolutionary at the time, sparking debate as to whether this new band of independent workers would be able to earn a sustainable living via non-traditional work.

Let’s fast forward to 2015. According to a new report released by the contractor-matching site Upwork and the Freelancers Union, freelancers say that they are indeed making bank, bringing in more money than their counterparts in traditional office jobs. This year, an estimated 34% of the U.S. workforce categorized themselves as freelancers. When distilled down to raw numbers, 54 million Americans – up by over over 700,000 workers from the previous year – are functioning in either a full or part-time freelance capacity. Many talent economy experts expect this trend to continue.

My Own Personal Journey

After 7 years in leadership roles in the healthcare human resources field, I began my journey as a solo business owner in 1993, providing consulting services to a wide swath of corporate clients. This later morphed into a career on the speaking circuit, amassing an average of 60 engagements a year for conferences throughout the U.S.  

To handle the heavy demand of my growing business, I even hired a virtual assistant (me in Chicago, she in Minneapolis), before this idea had even become popular.

Needless to say, we – among the rare few back then who elected to unlock the corporate handcuffs to pursue our own gig – were considered to be nuts. “What about your retirement benefits?”,  a few would ask. “It seems so unstable,” said others.

Yes, it seemed risky at the time. But honestly, I’ve always felt more secure pursuing my own thing. Even to this day, the thought of being locked into a W-2 job evokes a nauseating sense of unease in the pit of my stomach. I know, I know… it’s a control thing.

In fact, talk to most freelancers these days and they will share a similar tune. We all love the flexibility of creating a career on our own terms. And in terms of money, it’s far better to capture all of the money due for the value you’ve delivered than to have to work for pay that has a ceiling. Unlimited income possibilities + flexibility: how can you beat that?

Those surveyed indicated that they are largely satisfied with how the freelance lifestyle is working out for them. 60% said they turned freelance by choice and as a result, they are earning more than they did previously in their traditional jobs. And somewhat surprisingly, 78% noted that they had exceeded their previous earnings within a year of going solo.

Freelance Work – at What Cost?

There is no doubt that the ‘gig economy’ – as some are calling the world of freelancers and independent workers – has momentum behind it. Many believe that it’s the most important economic trend of the next decade.

As a heavy user of the ride-sharing service Lyft, I have been privy to a first-hand account of the impact of this movement. What’s beautiful about their model (Uber also falls into this category), is how the work of the independent driver becomes turnkey, allowing them to work as much or as little as they want. They get a cut of the fare which, depending on their volume of work, can be quite lucrative. Many of the drivers with whom I converse joined up with the intention of utilizing Lyft as a side business, but they are now working full-time because the money has turned out to be as good if not better than their 9-5 job.

Unfortunately, this practice has caught the eye of regulators who point to a blurring of the lines between who is classified as a W-2 employee and as an independent contractor. This has led to a firestorm of controversy in a number of major market cities, pitting drivers against the very companies for whom they work. For example, some drivers in San Francisco are claiming to have been misclassified as independent contractors which they say leaves them out of the loop for overtime pay and benefits. In other locales, taxi drivers are up in arms, claiming that the freelance ride-sharing model offers those who participate an unfair competitive advantage in the local marketplace.

Even Presidential candidate Hillary Clinton has jumped into the fray, questioning the so-called gig economy in a recent speech at the New School in New York. She raised concerns about workplace protection and what a ‘good job’ (in her view) will look like in the future.  Upon hearing a video transcript of her comments, I was left thinking “Here we go – another example of how politicos often attempt to pull us toward conformity. More pressure to go along and think like those caught up in a collectivist mindset.”

With all due respect to Clinton and legions of other howling jackals intent on crushing innovation and opportunities, early signs suggest that it’s far too late to turn back now. This is particularly true when you consider the fact that upwards of 40% of the American workforce could be classified as freelancers and independent contractors by the year 2020.

Moving forward, the narrative should focus on the high value being delivered by a free enterprise system that’s allowed to flow unencumbered and unfettered from the meddlesome forces of  statists. For with freedom of choice comes a variety of opportunities to become a productive member of society, with meaningful work and a fatter wallet being one’s just reward.  

Michael Scott is an independent journalist and contrarian disrupter focusing on the intersection between free markets and economic freedom. He can be reached on Twitter @biz_michael

FacebookTwitterGoogle+PinterestRedditShare