Few people would argue that more people are choosing to become freelancers, consultants and other types of Independent Workers than ever before. A 2018 poll from Gallup revealed that, in the US alone, 57 million people choose 'alternative work arrangements, with 29% earning the majority of their living that way (1).
What is less clear is how that figure breaks down on a demographic level. This article looks at some of the evidence around that and challenges some of the assumptions made about Independent Workers, particularly when it comes to their age.
Are Millennials leading the Independent Worker revolution?
Many articles about the 'gig economy' write about the role of young people in driving it forwards but it is not entirely actually accurate.
For example, while a 2018 survey by Upwork and the Freelancers Union found that the largest single cohort in the independent workforce was 22-34 year olds, with 35% representation, a closer look at the data shows that those over 35 make up even more of the independent workforce (57%), with only 8% of those under 22 in alternative employment. (2).
Taking a generational perspective, statistics from MBO showed that while millennials did make up most Independent Workers (38%), Baby Boomers weren't far behind (33%) with Generation X adding the remaining 29%. (2).
And it seems that Boomers are not just making up the numbers as they ease towards retirement either. A study by the freelancer platform, Wonolo, discovered that Boomers on their system, 'earned the most money, took on the most gigs and earned the highest ratings.' (3).
So, where does the misconception that it's all about the young people come from? It could just be that some of the language around the Independent Workforce is new. Susan Coombes Ph.D., writing for Phys.Org, points out: 'While the use of "gig economy" as a term in popular culture is somewhat recent, independent contractors, freelancers, and the self-employed have long existed in the marketplace.' (4).
Getting the facts right matter because if one generation is over-represented in the independent workforce it can be more easily dismissed as a passing craze. But when all generations are embracing changes to the workforce, this signals a more fundamental trend.
Diversity in the independent workforce
How about other demographics? Are women and ethnic minorities fully represented in the independent workforce. How about non-graduates?
Studies on both gender and ethnicity have revealed that the independent workforce is just as diverse as its traditional counterpart in these areas – or at least, no less diverse. For example, MBO found that women made up 46% of Independent Workers, the exact same percentage as released by the Bureau of Labor Statistics in 2018. (2)(5).
In terms of ethnicity, statistics from Upwork show that 62% of the Independent Workforce are white, 17% Hispanic, 13% African and 5% Asian. (2). In fact, the flexibility of the independent lifestyle can help to increase diversity in the workplace in areas where W2 employment struggles.
Take primary caregivers. The need for flexibility around working hours means they can miss out on opportunities because they don't fit into regular work patterns. This can cause them to fall behind in their career and, since most primary caregivers are women, contribute to the gender pay gap.
Independent Workers have more control over their working schedules and can better balance the demands of their work and family life.
The educational background of Independent Workers is unclear. Depending on the source, the number of Independent Workers with at least a college degree ranges from 39% to 65%. In the workforce as a whole, 2017 data from the Bureau of Labor Statistics shows 51% of employees had some kind of degree. (2)(6).
Equality of access
The wide appeal of alternative work arrangements across age, gender, ethnic and class boundaries suggests a change in the zeitgeist that lawmakers might need to be aware of if they are going to win votes at the ballot box.
For so long, Independent Workers have sacrificed benefits and protections that W2 employees might take for granted because they believe they can succeed in living a better life. The results of that optimism and courage have contributed nearly $1.56 trillion to the U.S. economy. (2).
Organizations such as iWorker Innovations are currently taking up the slack by helping Independent Workers access portable benefits, but a wider shift is needed to close the benefit structure gap.
As Shelly Steward, a research manager with the Future of Work Initiative puts it: “[The gig economy] doesn’t come with benefits for the future, it doesn’t set people up to have a stable retirement and we need to think about policies that can address that.” (3).
Reference
2. IPSE Factsheet on the Independent Workforce, 2019 (TBR)