On June 7, for the first time in 13 years, the Bureau of Labor Statistics (BLS) released numbers on the size of the gig economy, showing… little more than how difficult it is to properly size the segment, and a big picture that’s still hard to see.
According to the BLS, the overall number of gig economy workers has shrunk since 2005. In particular, the proportion of workers who rely on freelance work for their main livelihood has declined, from 7.4% to 6.9%.
Whose gig is it, anyway?
The BLS data includes only people for whom freelancing is a primary job. It doesn’t count so-called moonlighters, who supplement their regular income with contract work. In the words of UpWork CEO Stephane Kasriel, that means it “doesn’t always reflect how people approach and perform various kinds of independent work anymore.”
At Business Talent Group, we were more surprised by the supposedly modest scope of the full-time freelance economy. According to Staffing Industry Analysts research, full-timers comprise 15.5% of the workforce, a figure that’s also supported by economists at Princeton and Harvard. Internal surveys of our own independent consultants suggest that nearly all of them have committed to the work on a full-time basis.
Unfortunately, full-timer freelancers are exactly one of the populations that are most difficult to count. The BLS study counts only those who self-identify as an “independent contractor, independent consultant, or freelance worker.” However, many independents consider themselves small business owners. The Aspen Institute cites research that shows the way people identify their work arrangements on surveys often contradicts the way they identify on their tax returns. And Emergent Research’s Steve King points out that “According to the technical note in [the BLS] release, because of their independent contractor definition only 3 in 5 of those who are self-employed (solopreneurs) are included in their number.”
What the BLS gig economy study got right
More revealing, in our view, is the finding that growth in freelance business and professional services has indeed been substantial. Between 2005 and 2017, in fact, it jumped by 21%. More than 460,000 American freelancers now identify it as the industry in which they work.
Here are some other BLS findings that didn’t surprise us:
- Independent contractors overwhelmingly prefer their work arrangement (79 percent) to traditional jobs
- Fewer than 1 in 10 independent contractors would prefer a traditional work arrangement
- Pay for independent contractors is about the same as for traditional workers, although there is wide variation
Separate data released by the Federal Reserve found that nearly a third of adults engaged in some form of gig work, whether as a primary job or to supplement other sources of income. The Census Bureau’s statistics on non-employer businesses show a significant rise between 1997 and 2015 in the number of sole proprietorships and other solo endeavors.
In September, the BLS will release data on Americans who find work through online staffing apps. Unfortunately, since it does not currently have funds to run the Contingent and Alternative Employment Arrangements survey on a regular basis, the debate over the size of this important sector may not be resolved for some time.
Leah Hoffmann is BTG's Marketing & Content Strategist. A former journalist, Leah worked for Forbes.com and The Economist before joining BTG. She is passionate about clear thinking, sharp writing, and strong points of view.