The number of freelancers, along with their share of the American economy, has surged in the last year. Freelance workers’ earnings accounted for $1.2 trillion in annual revenue, an increase of 22% from 2019. Likewise, 59 million Americans, 2 million more than in 2019, reported performing freelance work during the last 12 months. Those 59 million Americans represent 36% of the overall U.S. labor market.
Those figures were released as part of a study by freelance platform Upwork.
According to the study, younger workers who are highly skilled and looking for work alternatives that are more flexible than traditional employment powered the surge. Half of the Gen Z (ages 18-22) labor pool reported performing freelance work in the last year with 36% having started since the COVID-19 pandemic began. 44% of Millennials (23-38), 30% of Gen Xers (38-54), and 26% of Boomers (55+) also reported doing freelance work in the last year.
The havoc caused by the pandemic, along with the difficult job market for recent graduates, has also pushed many into the freelance market. The shift to remote work, along with its general acceptance, benefited freelancers because it put them on a more even footing with their traditionally-employed colleagues who were in the office. 12% of the entire American labor market started doing freelance work for the first time during the pandemic.
“Amidst the economic challenges in 2020, freelancing continues to be an important part of the economy,” said Adam Ozimek, Upwork Chief Economist. “To adapt to the changes and uncertainty of COVID-19, we saw many professionals enter the freelance workforce for the first time.”
According to Ozimek, the thriving freelance market is a boon for businesses that have also had to adapt during the pandemic.
“At the same time, the shift towards greater workforce flexibility coupled with the necessity to maintain continuity brought new demand for independent professionals from businesses,” Ozimek said. “The changing dynamics to the workforce that has occurred during the crisis demonstrate the value that freelancing provides to both businesses and workers.”
Many of those who have entered the freelance job market after quitting their full-time job have seen the benefits financially. 75% of them said they earn the same or more than when they had a traditional job. However, there were other benefits to freelance work that go beyond dollar signs. 65% of Boomers say they are using freelance work to transition into retirement. The study also said a whopping 48% of all freelancers are caregivers with many of them saying freelance work gives them the opportunity to provide for their family without needing a traditional job. That’s a critical perk when many parents have been forced to stay at home to provide child care due to an uncertain schedule at many schools and daycare centers.
“It’s no surprise that freelancing is on the rise, especially now that we have fully disentangled ‘where’ we work from ‘what’ we work on,” said Hayden Brown, President and CEO of Upwork. “Amid all of the uncertainty brought about by COVID-19, the data shows that independent professionals are benefiting from income diversification, schedule flexibility, and increased productivity.”
With clear positives for businesses, too, Brown said he expects the increase, and popularity, of freelancers to continue in the immediate future.
“Companies are finding that these professionals can quickly inject new skills and capabilities into an organization and strategically flex capacity up and down along with changes in demand and workloads,” Brown explained. “We expect this trend to continue as companies increasingly rely on freelancers as essential contributors to their own operations.”