Is the Freelancing Economy As Big As We Think It Is?

Is the Freelancing Economy As Big As We Think It Is?

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It’s news to no one that the freelance economy in the United States is booming. Headlines have proclaimed that over a third of American workers have done freelance work, and that most of them earn more money than they did at their day jobs.

There’s no doubt that freelancing is a big part of the economy, but there’s a difference between a person who has engaged in freelance work and a person who relies on it for their income.

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With the rise of the “gig economy” through services like Uber, along with the ease internet-based freelance work like writing and web design, plenty of Americans are using freelancing as a source of income on the sideā€”but it’s a tiny fraction of their total work hours, and it doesn’t define their lifestyle. Services that are aimed specifically at freelancers, such as office spaces with short-term leases, may find a smaller market than they expect; a full-time employee who builds a simple website a couple times a month is probably not looking for an alternative to the home office.

Even though freelancing as an activity is growing, freelancing as a full-time job remains elusive.

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In contrast to the data reported by the aforementioned studies, the Bureau of Labor Statistics states that only 10% of US workers reported being self-employed in 2014, even if over 33% of them engaged in freelance work. On top of that, the category of self-employed workers includes small business owners and similar positions where the employee works for themselves rather than for clients. The number of people in jobs that we traditionally associate with freelancing must be even lower.

Interestingly, the number of freelancers in 2015 did not grow significantly from 2014. The number of workers doing any type of freelance work is up only 0.2% from last year. It’s true that the internet provides easy access to freelance employment, but we’ve already had several years for modern technology to seep into the economy. We’re not seeing signs of explosive growth year after year, even if the total percentage of freelancers is up compared to 10 years ago.

If the growth of the freelancing economy isn’t as sudden and urgent as it first seemed, what does this mean for companies that are relying on it?

For one, the fact that freelancing isn’t growing uncontrollably doesn’t mean that it’s dying. The numbers are still on the rise, and the ease of working remotely is sure to encourage freelance work in the years to come. There is still a market freelance-friendly services, whether it’s coworking spaces or equipment rentals.

But we shouldn’t expect to see a sudden growth in full-time freelancers in the near future. The growth will be gradual, and it would be unwise to base your business plan on hypothetical future growth if the current market can’t support it today.