Six-Figure Earners Are a Growing Share of U.S. ‘Gig’ WorkforceBy
America’s full-time freelancers are finding financial success
Number of full-time, self-employed contingent workers is down
A growing share of full-time freelancers in the U.S. are finding success in striking out alone.
While the number of self-employed Americans working at least 15 hours per week on a consulting, freelance, contract, or on-call basis fell this year by 700,000 to 16.2 million, the portion of those independent workers earning over $100,000 per year hit a new high, jumping 4.9 percent to 3.2 million, according to an annual survey released Tuesday by MBO Partners, Inc., a Virginia-based group which provides business services to independent contractors. The share of so-called “high-earning independents” is up over 60 percent in figures going back to 2011.
Expensive consultants are nothing new, and natural earnings inflation has helped to push a rising share over the $100,000 threshold. But the increase is also being fueled by growing demand among employers for workers on a project-by-project basis, said MBO Partners’ founder and chief executive officer Gene Zaino.
Independent workers with specialized skills in fields such as engineering and computer science are having little trouble finding clients as companies compete for talent in a tightening labor market, he said.
The nation’s unemployment rate fell to a 16-year low of 4.3 percent last month. The number of U.S. job openings rose to the highest on record in April as the rate of hiring declined, suggesting a possible skills mismatch and struggle among employers to find the right applicants.
It’s not just high-priced consultants pursuing alternative work arrangements. The survey separately found an increase in the number of traditionally-employed workers taking on occasional side projects to help supplement their income, supported in their search for part-time work by new online platforms and apps from the likes of Uber Technologies Inc. and TaskRabbit Inc.
The total number of “occasional independents” -- those moonlighting irregularly or sporadically but at least once per month -- rose 23 percent this year to 12.9 million, up from 10.5 million in 2016.
What’s resulted is a“barbell” effect, said Zaino, who described an increasingly divided independent workforce reflecting two broader economic trends. On one end, demand for highly-skilled talent is allowing sought-after consultants to jump between clients and charge higher fees for their time. On the other end of the spectrum, overall tepid wage growth for most U.S. workers is causing many to seek out additional sources of income.
Some 65 percent of the independent workers surveyed said working as they do is their choice, up from 59 percent last year and 55 percent in 2011, when the job market was weak and many turned to gig work out of necessity.
Yet on-demand jobs often lack the safety net of benefits and wage protections associated with traditional work arrangements. A 2015 report by the Government Accountability Office found that independent work tends to lead to fewer employer benefits and a greater dependence on public assistance than standard work.
When it comes to understanding this corner of the labor market, government figures provide little detail. Most data tracking the freelance labor force is generated by the private sector. The Bureau of Labor Statistics is scheduled to publish new figures on contingent and alternative work arrangements in late 2017, which would be the first update since 2005.
— With assistance by Jeanna Smialek