204,000 Self-Employed in CT; Freelancers Increasing Nationwide

The ranks of the self-employed are growing in Connecticut, as the number of freelancers continues to expand nationwide.  In Connecticut, there are now an estimated 204,000 individuals who are self-employed, more than 11 percent of the state’s workers, which exceeds the national average. As of March 2016, approximately 15.3 million people in the United States designated their employment status as “self-employed,” according to the U.S. Bureau of Labor Statistics, and increase of about 700,000 since May 2014, just over 10 percent of all U.S. employment.

In 2015, 29 states and the District of Columbia had self-employment rates below the U.S. rate of 10.1 percent, and 21 states had rates as least as high. Montana had the highest rate among states, 16.1 percent, followed by Maine (15.4 percent), Vermont (14.4 percent), and South Dakota (14.2 percent). The lowest rates were in the District of Columbia (7.1 percent), Delaware (7.2 percent), and Alabama (7.5 percent), according to BLS data.

Additionally, published reports last fall indicated that 54 million individuals report doing freelance work, either full-time or on the side, in the U.S., representing about one-third of the nation’s workforce.  That is an increase of 700,000 since 2014, according to a comprehensive study conducted by the independent research firm Edelman Berland.

“Americans who are freelancing already contribute more than $700 billion to our national economy and help U.S. businesses compete and find the skills that they need,” said Fabio Rosati, CEO of Elance-oDesk, which commissioned the survey with Freelancers Union.  The study identified five freelancer segments:

• Independent Contractors (36% of the independent workforce / 19.3 million professionals)
• Moonlighters (25% / 13.2 million)
• Diversified workers (26% / 14.1 million)
• Temporary Workers (9% / 4.6 million)
• Freelance Business Owners (5% / 2.5 million)

In its scale, scope, and complexity, the transformation (of the workforce) will be unlike anything humankind has experienced before," Klaus Schwab, founder and executive chairman of the World Economic Forum, which organized the Davos gathering,  wrote earlier this year. "The speed of current breakthroughs has no historical precedent. ... These changes herald the transformation of entire systems of production, management, and governance."

Already, 2.9 million freelancers earned more than $100,000 last year, up from 2 million who hit the six-figure mark just four years earlier, according to MBO Partners.  The report indicated that 60 percent of freelancers surveyed said they started freelancing by choice—up from 53 percent last year—and 67percent of freelancers agree that more people are choosing to work independently today compared to three years ago.

The survey commissioned by Freelancers Union and Upwork in 2015 found that than one-third of freelancers report that demand for their services increased in the past year, and 3 in 4 non-freelancers are open to doing additional work outside their primary jobs to earn more money, if such an opportunity was available.  The report stated that “freelancing is becoming a more prevalent, viable option for workers—a trend that spans across borders, industries and occupations.”