It’s no secret that today many more people in our economy are freelancers than in the past, but would you believe that the number is about 53 million people?
I was on the phone last night with Stephen DeWitt, the CEO of our portfolio company Work Market. He was talking about a specific community of people and I asked him how many of them were likely to be freelancers. He said “well the statistics say that 3 to 4 out of every ten people these days are freelancers.”
I thought that sounded high but after reading Mary Meeker’s Internet Trends Report, in which she says that “34 percent of the work force in the United States, 53 million people, now consider themselves independent contractors, short-term hires or other kinds of freelancers”, I think Stephen has it exactly right.
Look around you on the subway, the baseball park, the movie theater, 3 to 4 out of every ten people are freelancers. That’s a big number. And its growing pretty rapidly. Younger people are more inclined to be freelancers. Older people turn to freelancing for flexibility or economic necessity. And employers are more inclined to hire freelancers as technology makes the management and compliance requirements around freelancers easier to handle.
This has me wondering about the implications for things like benefits. I’m not sure about this, but I don’t think that freelancers qualify for unemployment benefits since they are typically tied to the company you worked for. If you don’t work for anyone how would you qualify for benefits? It also feels like we’ve already seen the impact on health insurance – it’s a safe bet that a good chunk of the uninsured are freelancers who don’t have companies to provide insurance. Even if the ACA is pushing many of them to buy their own insurance, they were an available market precisely because they didn’t have company-provided health insurance.
The excerpt above came from Fred Wilson’s blog and I agree with his last paragraph from that post:
It’s a new era we are living in and the nature of work is changing and changing fast. There are tons of opportunities in and around this trend and we are invested in some of them. It’s one of the big megatrends of this century.
I don’t think that people who strike out on their own are too concerned about unemployment.. if you’re willing to hustle, there is always work to be found. Plus we’re not tied to one place. Health benefits, though? You’re right.. that’s a potential problem.
The thing about unemployment is that most people, even those who do the 9-5 thing, don’t think about it because they don’t imagine themselves needing it. Then life happens and they need it while in between things and it comes as a shock that there’s nothing automatic about it. Small business owners don’t qualify and independent contractors don’t qualify, so when that “life happens” moment comes along they have no unemployment to fall back on even for a few weeks.
It’s that risk -v- reward thing. I can honestly say this.. it would be hard for me to be a freelancer (when I was one that is) without a spouse with a traditional job. Pay is erratic, work is feast or famine and son on.