The choice between self-employment or having a traditional job is a competition.
People tend to go through a mental math process of weighing the options against each other. After weighing the options, a winner is picked.
Up until about a decade or so ago the math heavily favored traditional employment, except for those that highly valued being their own boss.
But benefit cuts, increased workloads, declining job security and a growing desire for more work autonomy, control and flexibility has made traditional employment less attractive and independent work more attractive.
This has evened out the math, leading more people to choose independent work.
The trends driving this "math shift" away from traditional employment started well before the Great Recession and the economic downturn accelerated these shifts.
The Great Recession also resulted in more people working independently not by choice, but by necessity. Many of these necessity-preneurs prefer traditional employment.
The cyclical recovery and recent strong job market is making traditional employment both more available and attractive. This is allowing the folks who would prefer traditional employment to return to traditional jobs.
Bloomberg View's Free Agent Nation is Shrinking covers the impact of the strong labor market on freelancing. The key quote is on cyclical versus secular forces:
while there may well be a secular shift going on toward independent or contingent work, cyclical economic forces are stronger.
As the article points out, the results from the 2015 MBO Partners State of Independence study show the number of full-time independent workers has been somewhat flat over the past 2 years (despite the article's title, it has not declined).
I'm quoted in the article on the reason it's been relatively flat:
The strong economy is pulling people back into traditional employment, especially those who don't want to be independent and prefer traditional jobs. This group makes up about 30 percent of all independents ...
Despite this short term cyclical blip, the long term trends driving the structural shift towards a larger independent workforce are still in place and strong:
- Companies will to continue to hire more contingent workers
- Aging boomers and freedom seeking millennials will continue to find self-employment appealing
- Companies will continue to cut benefits - especially ever more costly health benefits
- Traditional job security will continue to decline due to intense competition and rapid change
- Self-employment will continue to offer more work autonomy, control and flexibility
- Self-employment will continue to allow people to pursue their passions and do work they enjoy
- Lots of people will continue to want to be their own boss
In other words, the already large independent workforce will continue to grow.
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