The vast majority of independent contractors are correctly classified. Study after study going back to at least 2015 shows that 70% to 85% of us who choose self-employment are happier, healthier and earning as much or more money than in a traditional job. Even at the height of the Covid-19 pandemic, 60% of us said no amount of money would get us to take a traditional job.
Contrary to the common media narrative that most independent contractors are app-based workers with companies like Uber and Lyft, the vast majority of self-employed Americans in fact work in entirely other professions. IRS research in 2019 found that only 8.6% of independent contractors did app-based work, and that most of those people were supplementing income from their primary, traditional jobs. Pew Research Center similarly noted in 2021 that “a majority of Americans who’ve earned money through a gig platform over the past year say they either spent less than 10 hours in a typical week performing these tasks or don’t do these jobs most weeks.”
Based on the federal government’s own research about who independent contractors are, the primary targets of anti-independent contractor policy-making are mostly Americans who prefer to be self-employed, and who are disproportionately women and people of color compared to owners of larger businesses that have employees.
“A staggering 39% of the U.S. workforce, or 60 million Americans, performed freelance work in the past year, an increase from the year prior. At a time of economic and labor market uncertainty, Upwork’s study found American freelancers contributed approximately $1.35 trillion in annual earnings to the U.S. economy, $50 billion more than in 2021. This growth was driven in large part to professionals seeking alternatives to the traditional model of a full time, 9-to-5 job.”
“51% of all freelancers, or nearly 31 million professionals, provided knowledge services such as computer programming, marketing, IT, and business consulting in 2022.”
“26% of all U.S. freelancers hold a postgraduate degree, up from 20% in 2021.”
“Two-thirds (66%) of freelancers say they feel more stimulated and 68% say they feel happier by the freelance work they do compared to a traditional job.”
“Nearly three-quarters (74%) say freelancing has given them greater control over their life, while other benefits include attention to their physical health and work-life balance.”
“77% of freelancers feel optimistic about their personal income and salary increase for the coming year, and 80% are optimistic about future job opportunities. Similarly, a majority (61%) of freelancers say they make as much as or more than they would for a traditional employer.”
“There are 64.6 million independent workers in 2022, up 26% over 2021. The number of Full-Time Independents, those regularly working more than 15 hours per week, soared 27% to 21.6 million- up from 15.3 million in 2019.”
“The number of Occasional Independents- people who earn money periodically by working at least monthly as an independent-rose from 15.8 in 2020 to 31.9 million in 2022, more than doubling.”
“Overwhelmingly, independents say they want to work in this way. In 2022, 64% of independents said working this way was their choice entirely. Satisfaction and confidence remained high, with the number of independents who say they feel more secure independently virtually unchanged from last year at 67%. The proportion who see independent work as less risky than a traditional job rose from 29% in 2021 to 33% in 2022.”
“The number of independents who reported high incomes is growing rapidly, up 16% from last year, and it comes on the heels of a 27% increase in 2021. Now, nearly 20% of Full-Time independents earns more than $100,000 annually.”
Sonecon (a report written by a former adviser to the Clinton and Obama administrations)
“In 2020, California introduced new policies for determining whether independent contractors should be classified as traditional employees; and advocates have called for a nationwide policy modeled on that effort. Our analysis shows that such a program would have substantial adverse effects.”
“Many reclassified contractors would be unable to accept jobs as regular employees. Some 46 percent of independent contractors choose the work because disabilities, chronic illness, or family obligations prevent them from working in a traditional office, factory, or other facility.”
“A nationwide reclassification program would likely lead to substantial net income and job losses. … A nationwide reclassification policy would affect people and companies in every industry. … The demand for independent contractors ranges from specialized computer programmers, journalists, and consultants in finance and healthcare, to data transcribers, Uber drivers, dog walkers, and customer assistance operators.”
“People choose to work as independent contractors for the benefits it provides and knowing the associated costs. … It is evident that independent contracting provides benefits and efficiencies valued by millions of workers. For people whose health issues or disabilities preclude most regular employment, these arrangements enable them to be productive and self-supporting. Other independent contractors gain the flexibility to manage their schedules as they choose and better balance work and their family responsibilities, studies, and leisure activities.”
“A national ABC test for independent contracting, therefore, would be especially harmful to people under economic stress as well as vulnerable people unable to earn a living any other way.”
“By narrowing the definition of what it means to be an independent contractor, state and federal authorities, such as those at the [U.S. Labor Department], are hoping that organizations will hire workers as employees instead of as independent workers. At first glance, this change portends significant gains for workers who are reclassified as employees and receive proper benefits and protections. But there are reasons to doubt that independent workers will benefit from the new restrictions:
“Many independent workers would not receive the additional benefits associated with becoming employees because many of them would neither become employees nor be able to maintain their jobs as independent workers. This is because companies will not extend all contracting positions into employment positions, thereby leaving workers with fewer job opportunities altogether.
“Independent work is an important source of income for those who have recently faced income loss and unemployment. Therefore, the loss of independent work opportunities would cause particular harm to these more vulnerable individuals. …
“A majority of independent workers prefer their nontraditional job arrangements over a traditional employment arrangement because independent work provides far more flexibility in terms of work schedule. …
“Restricting independent work opportunities and reclassifying independent work as traditional employment would be harmful for women, many of whom turn to independent work for the flexibility they need in their work schedules.
“Restricting independent work would disproportionately harm the criminal justice population because recent evidence shows that the gig economy is providing an important avenue to work for those who previously had a criminal record.
“Restricting independent work would also harm small technology startups that rely on independent workers. These technology startups are valuable because they tend to be highly innovative and have the potential to contribute substantially to job creation.”
“The AARP national survey conducted in the summer of 2022 included a national sample of women ages 40-plus who had launched businesses since January 2020.”
“About one quarter (26%) of women said they always wanted to start a business, and 19% said they did it to follow their passion; another 15% were pursuing additional income, and 15% wanted flexible work options.”
“AARP discovered the vast majority of women (98%) agreed that they made the right decision in starting their business and 39% said that their business was doing much better or slightly better than expected.”
“Never before have there been as many contractors offering skilled labor like programming.”
“71% of founders and execs revealed that economic uncertainty has made them more likely to bring on freelancers or independent workers. 50% of HR leaders told us their reliance on independent contractors has increased in the last year.”
“94% of workers now want hybrid or exclusively remote work options, according to a recent Gallup survey. … 50% [of H.R. teams] say they are more likely to hire remote contractors than they were a year ago, which would save costs if employees have to return to the office.”
“71% of in-house marketers and 68% of agencies are outsourcing their content needs to freelancers.”
“When they need help, in-house marketers are almost twice as likely to use freelancers over content platforms or agencies.”
“The increase in self-employment is disproportionately a story of women, especially non-white women, opting to become self-employed. This also seems to be tied to having young children at home. A plausible explanation for this increase is that a lack of access to childcare has made many women seek more flexible work arrangements in order to oversee their kids.”
“There were very large increases in the share of Black and Hispanic workers who report being incorporated self-employed. The shares for both increased by roughly 45 percent. … If it is sustained, it will imply substantial gains in business ownership for Blacks and Hispanics.”
82% of organizations report that skilled contingent workers make up half or more of their contingent labor force. Highly skilled, high-earning independent consultants and contractors is one of the fastest-growing segments of the contingent workforce.
Saving money fell to the ninth most important reason for companies to choose contingent workers. This is a substantial change from even just a few years ago, when saving money was one of the top five reasons. The need to improve business productivity, workforce flexibility, and access to highly skilled labor have overcome cost savings in importance.
“A remarkable 36 percent of employed respondents—equivalent to 58 million Americans when extrapolated from the representative sample—identify as independent workers. This figure represents a notable increase since we estimated the U.S. independent workforce in 2016 at 27 percent of the employed population.”
Independent respondents “are far more optimistic, both about their own futures and the outlook for the economy, than the average American worker. More than a third of them say that in 12 months they expect to have more economic opportunities, compared with a fifth of workers overall who say the same. More than 40 percent of independent workers say that they think it’s more likely in five years that there will be continuous economic growth, compared with about a third of all respondents.”
“Though the total percentage includes people who engage in some independent work on top of permanent employment, 72 percent of independent workers say they have only one job.”
“A third of employed respondents who earn more than $150,000 a year … include lawyers, accountants, successful actors, writers and other creatives, influencers, traveling nurses, and a variety of advisers and specialists. … A quarter of independent workers report that they do independent work because they enjoy it. This is the top reason cited by high earners.”
“Nearly 80% of hiring managers who engage skilled freelancers say they are confident (78%) in their ability to find the talent they need, compared to just 63% of those who don’t engage freelancers.”
“When asked about how confident they are in their company’s ability to respond to a disruption, 84% of those who use independent talent say they are confident compared to just 69% who do not use independent talent.”
“A majority (56%) of hiring managers that engage independent talent say they have increased utilization of independent talent over the past 12 months. And there is no sign of that trend letting up: 58% plan to increase utilization of independent talent over the next six months, as well as over the next two years (66%).”
“85% say that working with independent talent allows them to access specialized skills or expertise. Seventy-nine percent agree that working with independent talent has enabled their business to be more innovative.”
“Among working women, self-employment was associated with a 34% decrease in the odds of reporting obesity, a 43% decrease in the odds of reporting hypertension, a 30% decrease in the odds of reporting diabetes, and a 68% increase in the odds of reporting participation in at least twice-weekly physical activity. BMI for self-employed women was on average 1.79 units lower than it was for women working for wages.”
“Over one-third of entrepreneurs (36%) started their business after voluntarily quitting their job. This trend is particularly focused in Professional Services, with 48% of entrepreneurs who quit their job starting firms in that sector.”
“In 2021, 49% of entrepreneurs were women, a dramatic increase from the 28% seen in 2019.”
“Black or African American, LGBT and female new business owners were significantly more likely to start a firm in Community Services sectors – Nonprofits, Education, and Health Care – with 33% of Black-owned businesses in these sectors, 35% of LGBT-owned businesses, and 32% of female-owned businesses, compared to 26% overall.”
“Hispanic and AAPI entrepreneurs were more likely than others to start firms in Professional Services, with 49% of each group owning businesses in these sectors.”
“34% of Black or African American business owners started a business in order to improve their financial stability.”
“The portion of entrepreneurs who started a business due to child care responsibilities was highest among female business owners who indicated that they have school-aged children at home: 28% of these new business owners created their business in response to increased child care responsibilities, the most-commonly cited reason among this group of entrepreneurs.”
“A full three-quarters (75%) of these workers are highly satisfied with their work this year, significantly higher than last year (70%). More than eight in ten (83%) believe they are also more satisfied than they would be in traditional employment. These workers are also more satisfied with their independent work compared to their employed counterparts, of whom only six-in-ten (61%) are highly satisfied with their traditional employment.”
“83% of working women said they crave flexibility over stability in a working environment, and 92% said they are likely (51%) or very likely (41%) to prioritize flexibility over stability.”
“While women may be forgoing job stability in their transition from full-time positions, they are gaining mental health stability. 48% of women who switched to contract work reported improved mental health, and of the women who changed to gig work, one-third (38%) reported improved mental health.”
“88% of women who transitioned to gig work said that it allowed them to care for their loved ones without being judged or penalized. 79% of women doing gig work said they took on gig work with more than one company to more easily build a schedule that worked for them, get more hours and make work more varied and interesting.”
“The Great Resignation isn’t just about workers moving from one full-time job to another; 20%, or 10 million Americans, are considering freelancing. Among those, 73% cite the ability to work remote or flexibly as a reason why.”
The 10 million people considering freelancing would represent “a significant 17 percent increase in the total freelance workforce.”
“38% indicate what they value most about remote work is a more flexible schedule. The next most valued thing was more personal time, followed by 15% who say the lack of commute.”
There are now 51.1 million independent contractors in the United States.
55% of new contractors in 2021 were female. 68% were GenZ or millennials.
Two out of three independent contractors believe they are more secure than traditional workers.
87% say they are happier, and 78% say they are healthier, working independently.
“This survey asked Americans for their views … a majority (62%) say the most appropriate way to describe ride-hailing drivers is as independent contractors providing a service on behalf of the apps or websites. Smaller shares (35%) say these drivers are best described as employees who work directly for these platforms.”
“Gig platform workers’ self-perceptions follow a similar pattern – 65% see themselves as independent contractors, while 28% view themselves as employees.”
“Of those now working as independent contractors, 96% said they would not prefer to be reclassified as W2 employees. Additionally, more than 94% said they did not want to be treated as employees for the purpose of union organizing.”
“Government intervention to convert these workers into bona fide employees would do nothing to help these people. They would lose flexibility and, potentially, wages in exchange for job security or benefits they neither want nor would benefit from.”
“Being an independent contractor is a mutually beneficial arrangement for the vast majority of gig workers as well as those who employ their services. Severely diminishing the ability of firms and workers to use this status will ultimately reduce the number of independent contractors without an equivalent increase in the number of actual employees. While it may indeed create more permanence and a desired access to benefits for a group of workers who desire such things, the losses from such a move would greatly outweigh the gains.”
72% of women freelancers and 64% of men freelancers surveyed say their overall mental wellbeing has improved since freelancing.
50% of freelancers surveyed say they voluntarily quit their job to pursue freelance work.
More than three in five (62%) agree that freelance was a personal decision, and the government shouldn’t classify them as an employee.
“Our research has several implications regarding policies that attempt to reclassify independent contractors as employees. First and foremost, if independent work extends opportunities for women who would otherwise be unable to take on employment, then such legal challenges could disproportionately affect women’s labor force participation.”
82% of part-time freelance contractors and 76% of full-time freelance contractors consider themselves to be free agents. Not employees.
The self-employed have a higher median net worth than others. It is more than four times that of families of workers, and twice as high as families of retirees.
“More than 90% of hiring managers see working with independent contractors as important to meeting their business goals.”
“In volatile and unpredictable business landscapes, company leaders understand the necessity of building an agile workforce. Freelance talent plays a significant role in this goal already, and their importance will only rise.”
“Overall, the percent freelancing in 2021 remained constant at 36% of the U.S. workforce, but the past year ushered in a shift in the type of freelance work being done. This year, we found that there was a drop in temporary workers, but an increase in skilled freelancing.”
“The higher skilled nature of freelancing is clear in 51% of post-grad workers doing freelancing, up 6% since 2020, while the share of high school graduates or less freelancing has declined from 37% in 2020 to 31% this year.”
“53% of all freelancers provided skilled services such as computer programming, marketing, IT, and business consulting in 2021, up from 50% in 2020.”
“51% of workers with postgraduate degrees are freelancers, up 6% since 2020.”
“44% of freelancers say they earn more freelancing than with a traditional job in 2021, this is up from 39% in 2020 and 32% in 2019.”
This study was done in 2019 and released in 2020
“Self-employed workers with only one job — as opposed to those juggling multiple jobs — rate their work situation higher than workers in one traditional full-time job as an employee.”
“3 in 5 freelancers say they make the same or more than they’d make working for a traditional employer.”
47% view freelancing as a long-term career
60% of freelancers say there is no amount of money that would convince them to take a traditional job.
“One in 11 Americans say they want to go independent, signaling this is the new American dream.”
“Among full-time independents, the proportion saying they won’t go back to a traditional job was 61 percent in 2020, up from 53 percent in 2019.”
“Between 2011 and 2020, the proportion of independent workers saying they feel more secure working independently has soared, rising virtually every year. It started at 32 percent in 2011 and more than grew significantly to 56 percent in 2020.”
“Skilled professionals are one of the fastest-growing segments of the independent workforce, with their numbers rising in each of the past ten years. In 2011, there were 4.5 million skilled independents and in 2020 there are 7.7 million, representing a 71 percent increase.”
“More than 70% of 1099-M gig workers say they are working independently by their own choice, not because they can’t find a ‘traditional’ job. Most seem happy with gig work and place a premium on flexibility as a driving motivation behind their decision, over financial security or benefits.”
“Lawmakers may view freelancing as a last resort, but 75 percent of respondents chose to freelance because they prefer it to full-time work. Additionally, a little more than half of freelancers said they have access to more professional opportunities than they would as full-timers.”
“The largest share of workers with independent contractor income are those in the top quartile of earnings.”
“More than half of full-time independent workers say they feel more financially secure as independents than in traditional jobs, a record high. Seven in 10 full-time independents say they plan to continue their current path.”
73% of self-employed women say they have a better work-life balance; 68% of self-employed women earn the same or more money than in a traditional job; 59% of self-employed women say they have less stress; 57% of self-employed women say they’re healthier.
“As work trends shift towards side hustles and the gig economy, so does female entrepreneurship. This year’s report examines how part-time entrepreneurship, often referred to as ‘sidepreneurship,’ is providing additional options to traditional employment and entrepreneurship for women.
“Over the last five years, growth in the number of women sidepreneurs has grown at a rate that is nearly twice as fast as the overall growth in female entrepreneurship: 39% compared to 21%, respectively. Minority women are responsible for a large portion of that growth from 2014-2019 where we see sidepreneurship among minority women-owned businesses two times higher than all businesses: 65% compared to 32%, respectively.
“When looking at specific minority groups over the last five years, growth in side entrepreneurship is up:
“99% among African American women
“70% among Native Hawaiian/Pacific Islander women
“63% for Asian American women
“46% for Latina/Hispanic women
“36% among Native American/Alaska Native businesswomen”
“79 percent of independent contractors preferred their arrangement over a traditional job”
“Some media suggest that the gig economy is a large and growing segment of the U.S. labor market, revealing a marked shift in the nature of work relationships. However, there is little empirical evidence that this is the case. The few studies that have tried to infer the size of [the] gig economy consistently find this segment of the workforce is quite small.”
“Those who do independent work by choice (free agents and casual earners) report greater satisfaction with their work lives than those who do it out of necessity (the reluctants and the financially strapped). This finding holds across countries, ages, income brackets, and education levels. Free agents reported higher levels of satisfaction in multiple dimensions of their work lives than those holding traditional jobs by choice, indicating that many people value the nonmonetary aspects of working on their own terms.”
“More than 85 percent of independent contractors and the self-employed appeared content with their employment type.”
We are FIGHT FOR FREELANCERS USA, a nonpartisan, grassroots coalition of independent contractors who oppose the use of the ABC Test in federal law. Join Us