40% Of American Workers Will Be Freelancing Within 10 Years

Our national transition to a predominantly freelance workforce is at hand. According to an article by Quartz, 40% of our workforce is estimated to become freelance workers. Rather than this fact become only a cause for concern, we should look at both the benefits and the challenges this presents. As Jeremy Neuner notes of his own workplace, NextSpace, freelance workers benefit from saving travel time commuting and increased mobility from not being confined to a cubicle. It offers more flexibility for both employers and employees to pursue their own projects.

However, this coming change means the Department of Labor has to start actively collecting statistics on freelance workers so government industries can gain a sense of how to assist freelancers in ways that make sense, and we must amend taxation laws in a way that makes the process less convoluted for freelancers. In 2006, the last time statistics were compiled about freelance workers, 30% of the workforce was comprised of freelance workers. With the shattering consequences of the Great Recession and employers all too eager to cut back on employee entitlements, we can only assume this number is much higher today. Current tax codes still assume that most workers are traditionally employed and report to a workplace, when this type of work, and the employer benefits that often comes with it, is rapidly disappearing.

As Sara Horowitz, the founder of the Freelancers’ Union has noted, the decentralization and non-recognition of the prevalence of freelance work has made it difficult for freelancers’ labor to be recognized and properly compensated by a culture that assumes employment is primarily offered via older models. Under current law, freelance workers are treated similarly to small businesses and are not subsidized for purchasing their own insurance, where premiums are much more expensive than if purchased through an employer. The current tax code doesn’t take into account that freelance work is a primary source of income for many, and takes a significant chunk out of their taxable income via self-employment taxes, which are taken quarterly out of freelancers’ earnings and diminishes their total income by 15%.

It is important for freelance workers — who comprise more sectors of the economy now than ever — to continue to build their political power in order to push for these progressive tax reforms.