More people are turning to concert work than ever before, but because these jobs don’t usually come with compensation for employers, their proliferation could exacerbate inequality for millions of Americans.
The number of people employed in non-traditional ways in the United States rose to a record 51 million this year, an unprecedented jump of 34 percent compared to 2020, according to new data from MBO Partners, a company that provides business solutions to the independent workforce and is conducted a long-term study of the group. These types of workers — which include contract workers, people who are self-employed, temporary and on-call, and those who get short-term jobs through online applications or markets — are now equivalent to one-third of employment in the United States.
Concert work transfers the risk from employers to employees and can lead to financial instability for those who do it, leading to more economic and psychological stress than ordinary work. Most obviously, self-employment does not include many of the protections provided by traditional employment. This includes things like the minimum wage, overtime, paid parental leave and employer-subsidized health care. If people’s concert work does not compensate enough to pay independently for these extras, it can put people in a difficult economic situation compared to regular employees.
However, working independently has its advantages. It offers workers the flexibility to choose to some extent what, when and where they will work.
While advocates and some politicians are actively trying to secure the benefits of full-time employment for independent workers, progress has been partial and non-linear. California’s remarkable AB 5 bill turned many performers into employees and gave them the same benefits – but soon after a law was signed, Proposal 22, a voting measure sponsored by concert companies, passed and freed many concert companies from the need to consider their employees. . The battle in California is not over; in August, the California Supreme Court annulled Prop 22 and made it inapplicable, but concert companies said they would appeal.
Meanwhile, the march to independent work is still happening.
The increase in business registrations for companies without employees (say, an individual selling products on eBay or freelancers finding work in graphic design through Upwork) outpaced wage employment. The average weekly enrollment in Freelance Union, a non-profit organization that advocates and provides resources to a growing independent workforce, has risen 300% since the beginning of the pandemic.
Although self-employment is growing among all employment situations, it is growing fastest for people who do casual (regular, but no set hours per week) self-employment. Those numbers rose 51 percent to 24 million. Many of them do what is usually considered concert work: jobs on demand from platforms like Uber Eats or freelance sites.
Jobs found through online markets were important for both part-time and full-time work. About 40% of all self-employed workers report finding a job using online markets, up from 27% in 2020.
The rise of self-employment has been going on for decades and for a variety of reasons, from the breakdown of traditional employment to the proliferation of online platforms that connect people to this type of work. Like many trends, it has been accelerated by the pandemic – economic instability has historically increased self-employment – but it shows no signs of fading when the pandemic ends. So the jump in US workers is something we all need to pay attention to.
Why do people choose a concert work?
Despite the rapid economic recovery, there are still 6 million fewer employed Americans than there were before the pandemic, according to the Bureau of Labor Statistics. Many of them had to turn to self-employment – which is often omitted from BLS data – to make up for it.
Other self-employed people have regular jobs, but these jobs simply do not provide enough money. Nearly three-quarters of new self-employed in the MBO survey said they had taken a self-employed job to supplement their income.
“Connecting the two ends is getting harder and harder,” Steve King, an MBO board member and future job expert, told Recode. “In our world, it is very challenging for many people to achieve their monthly goal.”
Low wages are not the only disadvantages of traditional employment.
“Overall, what we’ve seen over the last four and a half decades is just a huge erosion of workers’ leverage in a way that has led to incredibly low quality jobs for huge parts of our labor market: low wages, low benefits, poor hours, poor working conditions, ”Heidi Schierholtz, director of policy at the think tank of the Institute for Economic Policy and former chief economist at the U.S. Department of Labor, told Recode.
Most self-employed workers (63 percent) believe that self-employment is entirely their choice. But Schierholz says the choice is not because independent work is particularly good.
“We know the quality of these [independent] “The jobs they say they choose are often just incredibly bad,” Sherholz said. “And that means their other choice is also really, really bad.”
However, about 77 percent of the independent workers in the MBO survey said they were very happy with their arrangements, 10 percentage points higher than traditional workers.
Concert work is a way for people to have more control over what their work involves, more flexibility in when and where they work, and a better work-life balance. Benefits such as the ability to work remotely are increasingly in demand during a pandemic, which has prompted people to rethink the primacy of work in general in their lives. Such work is especially important for people caring for children or caring for the elderly, or for people with disabilities where regular employment is difficult.
“I think one of the great things is that working with the online platform really gives people who are looking for more flexibility,” Adam Ozimek, chief economist at the Upwork freelance platform, told Recode. “A lot of people have a taste for working remotely this year and they see the flexibility that comes with it, and they want more.”
An increasing proportion of traditional employees (29%) even consider independent work to be less risky than theirs, according to the MBO. Two thirds of independent workers think so.
Independent work is also sometimes easier to obtain. The advent of applications or platforms such as TaskRabbit and Fiverr has made the process of finding independent work much more difficult, centralizing and simplifying the process of achieving it.
Then comes the question of misclassification, which stimulates the growth of independent workers. Industries as far away as construction and propulsion are increasingly calling their workers contractors rather than employees. The difference, although sometimes legally questionable, is economically advantageous. Employers can save about 25 percent by switching to contract workers, according to estimates by the Institute for Economic Policy. The savings come from employers not having to pay for things like unemployment insurance, workers’ compensation and paid leave.
How do you protect the growing ranks of independent workers?
Lack of protection such as unemployment insurance or employer-subsidized health care means events such as an accident, a new child or a global pandemic can negatively affect independent workers more than traditional ones.
“Freelancers do not have a social network to rely on to spend them during the weeks or months they are out of work,” Rafael Espinal, executive director of the Freelance Union, told Recode.
The Union is one of many advocates working to create something called portable benefits so that independent workers receive things like paid leave, unemployment insurance, pension plans and affordable healthcare, regardless of their employment status.
So far, fewer than 10 states have guaranteed paid leave for new parents, which would include concert workers. Biden’s proposed U.S. family plan will create a “national comprehensive” paid family leave plan that the Freelance Union hopes to include freelancers. The proposal is still being fought in Congress, so even if it is over, what it will eventually include is in the air. Independent workers are not included in the Family and Medical Leave Act, which provides protection for workers during unpaid leave.
“Once the budget is passed, we will have to ensure that independent workers are involved in the implementation of the program,” Espinal said. “It should not be difficult, given that a handful of countries have successfully implemented such a program.”
And paid leave is just the tip of the iceberg when it comes to benefits. It is not enough to meet all the needs of the rapidly growing number of independent and self-employed workers, who make up a significant proportion of the US workforce.
Espinal believes the government should protect independent workers.
“If it becomes unsustainable, it’s because the federal government is not responding,” Espinal said. “I believe that the silver cladding of this pandemic is that it shocks the federal and state governments to the extent that they must respond and consider creating a safety net for millions of people who have traditionally been left without one.”