Are Freelancers Workers or Small Business Owners?

This is a guest post by Richard Greenwald.

America doesn’t know what to make of the rise of the freelancer.

Today there are about 25 million freelancers in the U.S., according to Department of Labor reports. And a recent survey by market research firm Penn, Schoen & Berland Associates shows that about 20% of employed Americans work as freelancers or are self-employed. That’s one in five Americans.

Hundreds of news organizations have examined this trend. There is a vibrant advice industry offering workshops, Web sites, membership organizations, seminars, and books. This makes sense. If the freelancing community is so big, of course there is media interest and businesses catering to it.

Freelancing is a permanent condition of our economy, not a temporary condition caused by the most recent economic crisis. We shouldn’t be confused on this score. Freelancing has been on the rise for decades. Demographers have predicted it for some time. It hit the blue collar and manual labor sector early and hard in the 1970s and 1980s and recently moved to the higher paid areas of the white collar world. Data from the Census, Department of Labor, and the Small Business Administration demonstrates that there has been a steady and increasing rise in what I call the freelance economy. As American businesses moved from a task orientation to a project orientation, and as new technologies blurred time and space, companies could replace permanent workers with more highly skilled and flexible freelancers. And they did.

These new freelancers have been celebrated for their independence and entrepreneurial spirit. They are the living example of Adam Smith's economic actor. They live in the neoliberal land of our new economy, beholden to no one and rising only by pluck and luck. There is no safety net, most labor laws do not cover them, and they have no benefits--only opportunities. They survive and thrive by their own wits.

But freelancing is risky. The average freelancer takes no vacations, is scared of the future, and is always frantic to find the next gig. Freelancers do not balance work and family, instead they blend the two into a hybrid lifestyle. Much of the economic risk has been shifted to them and they feel it.

Are freelancers workers or bosses? Most media reports describe them as successful small business owners or struggling, exploited workers. But freelancers often find themselves in both situations on a regular basis. In fact, most experience periods of exploitation followed by periods of success.

Freelancers are hard to classify because they are redefining work in America. They work for clients, on site and off. They move from project to project, team to team, and team to solo. And sometimes they take full-time jobs for brief stints. While officially 25 million people within our workforce are defined as freelancers, many traditional full-time employees also exhibit cultural signs of freelancers.

For example, they have little loyalty to employers, prize freedom, and do not expect security (to last). Much as the transformations of the industrial era redefined class relationships, a new understanding of work is developing.

Freelance consciousness has blurred class lines to the point that many children of the middle class see themselves both as exploited worker and the boss simultaneously. How we resolve this contradiction will have a profound impact on all of our lives.

Richard Greenwald is a professor and the dean of graduate studies at Drew University in Madison, New Jersey. He is writing a book about the freelance economy and encourages you to post comments below or email him directly with your thoughts.

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