Upwork and the Freelancers Union released their 2017 Freelancing in America study last week. This is the 4th year of this study.
The key finding is the estimated number of freelancers continued to grow in 2017, reaching 57.3 million, up from 53 million in 2014. That's about 36 percent of the workforce.
According to the study, part-time freelancers are both the largest group and the ones driving this growth.
The biggest category of freelancers is what they call diversified workers. This group is defined as:
People with multiple sources of income from a mix of traditional employers and freelance work. For example, someone who works part-time at a start-up, manages an Airbnb and does freelance coding.
Can you tell from this definition that Upwork is based in Silicon Valley?
Justin Fox, in his Bloomberg View article The Rise of the Not-Just-Freelancing Freelancer on the study, adds this non-Silicon Valley description of a diversified worker:
... someone who works part-time at Wal-Mart, babysits, and knits sweaters for sale.
Moonlighters (those with full-time jobs who freelance on the side) are the 3rd largest group.
Combined, these two groups increased in number from 28.7 million in 2016 to 32.8 million in 2017.
This was enough to overcome a decline the number full-time freelancers (the 2nd largest group), which fell 17.7 million in 2017 from 19.1 million in 2016.
These findings are consistent with the findings of the 2017 MBO Partners State of Independence study, which we work on with MBO Partners.
The major differences between the two studies are due to differing definitions of who is an independent worker/freelancer.
The MBO Partners study only includes those who regularly earn money as an independent worker. The Upwork/Freelancer's Union study includes anyone who earned any money from freelance work over the prior year.
Interestingly, when we re-ran the State of Independence results with the definitions used in the Upwork/Freelancers Union study, we came up with very similar numbers as Upwork/Freelancers Union did.
The Aspen Institute's Future of Work team also found the studies are consistent once you adjust for differences in the definitions.
This level of consistency is good. Having multiple, consistent studies helps confirm the trends presented are real.
It also reinforces the idea that there are both cyclical and structural forces driving the growth of the independent workforce.
Justin Fox's article provides an excellent description of the cyclical forces:
What's going on here is what happens at some point in every economic expansion, as a tightening labor market pulls contract workers, freelancers and temps into steady payroll jobs. During recessions and the early years of subsequent recoveries, employers lay off workers and the ranks of full-time freelancers grow. As recoveries gain strength, the independent-worker tide recedes.
One structural shift we're seeing more people turning to part-time independent work, mostly to supplement their income.
We also believe there is a structural shift to full-time independent work. But during times of tight labor markets (like now), the number of full time freelancers falls for the reasons described above. However, we think the total number will increase again as labor markets weaken and will peak above the prior peak.
Below is the infographic (click to enlarge) from the Upwork study and the full set of results is available on Slideshare.
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