Why Is Washington Ignoring the Freelance Economy?
Today is International Freelancers Day, a time to acknowledge the contributions of the millions of independent workers who make up a large and growing portion of our economy. Sara Horowitz is the founder of Freelancers Union, a nonprofit organization that represents America's independent workforce. In an exclusive column for The Atlantic, she calls on the federal government to build a support system for the nation's freelancers.
Happy International Freelancers Day! No, thank you. I don't want any gifts, or a parade, or a paid day-off. All I want is affordable, stable, health insurance for freelancers, and maybe some protections that help them get paid what they're due. Is that too much to ask?
Apparently, yes. Despite the fact that close to one-third of the country's workforce is comprised of independent workers, this sizeable chunk of our economy has none of the protections and benefits that "traditional" employees have. Health insurance? No. Unemployment insurance? Nope. Protection from unpaid wages, or race, gender, or age discrimination? Not a chance. We've left these 42 million workers out to dry and entirely out of our social support system.
We're dealing with an outdated employment system - it was built for a workforce from the 1930s, and it no longer works for us today. So as a result, a growing number of working Americans are left with no protections.
Recent Bureau of Labor Statistics data show a big jump in temporary, short-term employment - this year so far, temp jobs have increased by more than 156,000. Due to the economic downturn? In part. But more so due to a larger, seismic shift in the U.S. workforce.
Our economy is more mobile, fluid, and decentralized than it's ever been. The number of freelancers, independent contractors, consultants, self-employed, temps, part-timers, and contingent employees is increasing significantly. Instead of being tethered to one employer or company, they identify with a profession and change jobs more frequently. For example, instead of being a life-long staff member at IBM, you may be an IT guru who works on a contract basis for IBM, Microsoft, and Hewlett Packard - in one year.
This new workforce evolved over the past several decades as companies used improved technology to better predict workflow, and therefore pared down on core staff to save on expenses. Companies started hiring staff only as needed - which meant hiring freelancers. Because freelancers are becoming more prevalent in the workforce, the term no longer conjures up an image of a hip, 27 year old graphic designer working in his parents' basement (or not working at all). Instead, lawyers, accountants, writers, nannies, financial advisors, IT experts, and costume designers can all claim freelance status.
Laws from the 1930s, including the New Deal, were widely celebrated for the health insurance, pensions, vacation days, job training, unions, career opportunities, and protections they extended to workers. At the time they were passed, they met the workforce's needs. But the workforce has changed since then, and independent work has been steadily growing. We need a new New Deal that meets the needs of this new workforce by building economic security that is no longer centered solely on an employer/employee relationship. Independent workers need (1) unemployment insurance to stabilize their income - and the U.S. economy - when they are involuntarily unemployed; (2) protection from late or denied payments, which 77% of freelancers have faced; and (3) access to affordable health insurance, which is prohibitively expensive to an individual on the open market.
And freelancers need to come together and recognize their power in numbers. This group of 42 million holds tremendous potential to influence politics (by demanding better legislation to protect them) and markets (by demanding affordable health insurance). However, without solidarity and a collective desire to create change, without raising their voices and demonstrating their immense economic contributions, independent workers will never be recognized as a "class" that is worth paying attention to. Employers also have a role in the solution. Some, like Time Inc., require that freelancers take a 4% hit on what they are owed if they want to be paid in 25 days, and others "misclassify" staff members as contractors in order to avoid paying their benefits.
A successful freelance writer recently told me that her father continues to ask her if she's "found a real job yet" (despite the fact that she has won print and broadcast journalism awards).The perception that independent workers are unemployed, partially employed, lazy, or just biding time until the economy improves needs to change. The economy has shifted, the workforce has shifted accordingly, and it's here to stay. Once the economy improves, we will not see freelancers flocking into cubicles.
The data speak for itself: between 1995 and 2005 (i.e. before the recession), the number of independent workers in this country grew by 27 percent. In New York City alone, from 1975 to 2007 (again, pre-recession), 2/3 of job growth was due to self-employment. And let's look at Nebraska: the state boasts among the lowest unemployment rates in the country (4.8%!) by retaining a diverse employment pool with significant numbers of independent workers.
It's time to face the music. We need to accept that as work in this country has shifted from craft to industrial to information-based, the workforce has logically shifted along with it. Our current policies reflect a bygone era that is not coming back. If we do not recognize and accept this shift, and if we do not make appropriate changes to meet the needs of the new workforce, we risk losing the vitality of 42 million Americans.