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News from EPI Little evidence that freelancing is large or growing as a primary source of income

Recent studies by the Freelancers Union and the online freelancing platform Upwork (FU/U) greatly overestimate the number of people who derive their primary income from freelancing, according to EPI President Lawrence Mishel in Freelancers Union/Upwork freelancer survey’s misleading claims: Freelancing as a primary source of income neither big nor exploding. While the Freelancers Union and Upwork have touted the claim that freelancers comprise 53–54 million workers (or 34 percent of the workforce), according to their 2015 study only 18.1 million workers (or 12.5 percent of the workforce) relied primarily on freelancing to support themselves—a drop from the 19.6 million who did so in 2014.

“There’s no reason to believe that freelancing is a large or rapidly growing form of work. Even the Freelancers Union and Upwork data itself provides no evidence that more people are relying on freelancing as their main source of income,” said Mishel.

Only one of the five categories used in the FU/U survey (“independent contractors”) represents workers who support themselves primarily through self-employment. The survey shows that there were only 19.6 million independent contractors in 2014 (constituting 13.5 percent of the workforce)—and 1.8 million fewer independent contractors in 2015 than in 2014, an 8.5 percent drop. Furthermore, using the survey’s broadest definition shows that the share of freelancers was essentially the same in 2015 (34.2 percent) as in 2014 (34.0 percent). In other words, despite the attention being paid to the issue, the number of freelance workers in America is not exploding.

In contrast to the FU/U survey’s estimate of 19.6 million independent contractors in 2014, the Bureau of Labor Statistics (BLS) estimates there were only 11.3 million self-employed people who had no paid employees in 2014. Most of this 8.3 million gap is probably because the FU/U surveys counted people as independent contractors if they did any freelancing, even though they may not have received any 1099 income. The gap can also be partially explained because the FU/U survey asks people whether they freelanced over the last twelve months, while BLS estimates the number of people self-employed on average each month. There is no reason, Mishel notes, to assume that BLS does not adequately capture the number of people who rely on self-employment for their primary source of income.

“While freelancing does have issues we need to address, this needs to happen at the same time we address stagnant wages, eroded collective bargaining, weak labor standards, and the rise of temping, subcontracted work and other forms of nonstandard work,” said Mishel. “Paying so much attention to the so-called gig economy should not distract us from this larger picture.”

Because workers who are illegally treated as independent contractors may not respond to BLS surveys by answering that they are self-employed, any assessment of stable self-employment does not speak to whether employee misclassification as independent contractors has risen. As interest in providing portable benefits and protections for freelancers and other types of workers grows, it is also important to turn our attention to the rise of employee misclassification and the question of how to generate robust wage and benefit growth for all workers.