Wall Street Journal
By: Lauren Weber
September 10, 2013
U.S. employers have been adding jobs since October 2010, but a growing segment of the workforce isn't interested in applying.
More than 17 million Americans identified themselves as self-employed consultants, freelancers, temps and other "independent workers" as of May 2013, up 10% from 2011, according to a new report from MBO Partners, a firm that provides back-office services such as billing and tax withholding for such workers. The number is expected to grow to 24 million by 2018.
For the first time in three years of commissioning this annual survey, MBO found that Gen Xer's (ages 34-49) comprise 36% of the independent workforce, the highest share of all age groups. The rest are Baby Boomers (33%, ages 50-67), Millennials (20%, ages 21-34) and Matures (11%, 68 and older). These so-called independents are just as likely to be male as female.
Because the economy has improved, "I expected that many people doing independent work would've gone back to traditional work," said Gene Zaino, CEO of MBO Partners. But the report, which was released Monday, notes that more people are instead turning to self-employment, and will continue to do so.
That momentum is the result of a few major, interlinked factors. First, "companies are less committed to commitment," said Zaino. They've realized they don't need to take on the burden of full-time employees to accomplish their objectives, so they've trimmed their core staff through layoffs and attrition. At the same time, they're increasingly comfortable doling out projects to freelancers and consultants which means there's more work available to freelancers.
Second, more individuals are choosing the flexibility and control of independent work. And with networking tools like LinkedIn and Twitter, along with websites that connect freelancers with potential clients, they have access to more opportunities, Zaino said.
Of course, some independent workers find themselves in the "independents" category thanks to bad breaks like layoffs, a family relocation or medical issues that make it tough to find or hold onto a permanent full-time job. One in seven workers polled by MBO said their decision to freelance came down to factors beyond their control.
But for those workers with coveted high-end job skills - such as technology and design professionals, accountants and others - independent work can be a boon in terms of personal freedom, job satisfaction and income. Sixty-four percent of independents rated their career satisfaction as 8 to 10 on a 10-point scale. That's far better than the 30% of Americans overall who report being excited about their jobs, according to a recent Gallup poll.
A wildcard in the rising numbers of independent workers, said Zaino, is the Affordable Care Act, which will make it easier for people to purchase health insurance on their own. That law will give more Americans the freedom to tell their bosses to "take this job and shove it," as the country music song eloquently put it. (See: Paycheck, Johnny)
Among other findings in the MBO survey: Independent workers earned $1.17 trillion from May 2012 to May 2013, 60% of which came from the workers' own metro area. A small amount -- $43 billion - was generated outside the U.S.
Approximately 2,000 independent workers were polled in May; they had to affirm that they worked at least 15 hours per week in non-traditional, non-permanent employment to be included in the survey.
MBO began conducting its annual surveys in 2011, partly in response to the dearth of official information about the freelance and contingent labor market. The Department of Labor gathers information on temporary workers and the self-employed, but uses narrow definitions that leave out a vast number of Americans who have opted for non-traditional work arrangements.