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Highly skilled freelancers contributed over $135 billion to the economy—now they need protecting

A new report from Fiverr indicates that highly skilled freelancing is on the rise and federal legislation is needed to develop policies to support these workers.

Highly skilled freelancers contributed over $135 billion to the economy—now they need protecting
[Image: oatintro/iStock]

The United States is in the middle of an independent labor explosion–despite outdated government studies that suggest the contrary. The continued rise of on-demand platforms and the gig work they generate has pushed what was once a niche conversation on labor economics into the mainstream. Policy makers and businesses alike want statistical confirmation of what they know anecdotally to be true: the digitization of work has brought about a meaningful shift in the way people are working.

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Studying how the labor market is divided is incredibly important as it provides the government with a more complete picture of the economy. Ideally, this picture shows not only areas of growth and expansion, but it also identifies the subsets of workers that are making this growth possible so they may be supported with the appropriate policy and economic development initiatives. This is particularly critical for the highly skilled freelancer population in the U.S.

Now you might be asking, what is skilled freelance work, and how is it different from independent work in general? These are workers who perform knowledge-based labor that requires specialized skill sets and experiences. They encompass a huge swath of the overall independent workforce and include professionals such as software engineers, voiceover artists, consultants, and more.

This subset of the labor force is unlikely to be automated out of existence thanks to the creative and service-oriented nature of their work. They serve as a major talent driver for both small and large businesses, and they are able to earn a living regardless of geographic location, provided they have reliable access to a fast internet connection. On top of all this, they are growing, both in terms of overall population and the revenue they generate.

To better understand skilled freelance workers, Fiverr commissioned market research firm Rockbridge Associates to analyze a range of secondary data sources from the U.S. Census Bureau, U.S. Federal Bank, and the U.S. Department of Labor and specifically looked at over 20 million tax returns for non-employer entities.

The Freelance Economic Impact report uncovered that in the top 25 markets for this type of work, the population grew by 14% (from 2011-2016), their revenue grew by 19%, and they have contributed over $135 billion to their local economies (between 1 and 2% of GDP depending on the market.)

What the report proves is that this type of work is growing, these workers are making significant contributions to their local economies, and that if they are going to continue to thrive, they need to be supported. There are several things that can be done that would immediately improve the playing field for skilled freelance workers in the U.S.

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Legal protection to get paid on time

Legal protection for skilled freelance workers varies widely across the U.S. depending on whether they are freelance contractors or run their own corporations. New initiatives such as New York City’s “Freelance Isn’t Free” Act of 2017 give the self-employed important legal protections that make it easier for them to earn a sustainable living. The legislation ensures they have better footing when writing contracts and getting payments from clients.

Universal access to broadband

Internet speeds vary broadly across the country. According to Akamai’s State of the Internet report, the U.S. ranks #10 in average connection speed, far behind the likes of South Korea, Norway, Japan, and others. Initiatives such as the New NY Broadband Program, the FCC’s Lifeline program, and the municipal wireless movement aside, there is still a long way to go. In fact, Akamai’s data indicates that Washington, D.C., and Delaware are the only two places in the country where the average internet speed surpasses the FCC’s 25 Mbps threshold for broadband.

Training for more workers to become skilled freelancers

The study clearly shows the economic benefits skilled freelance work has on local economies, so local governments should be arming their workforce with the appropriate skills. There are many in the workforce that could benefit from skilled freelancing but lack the proper education and skills needed to earn a living from it.

As in many emerging industries, we see most of this growth taking place in coastal hubs and in big cities. It is imperative that government, community groups, and corporations alike make education affordable and accessible for everyone, no matter who they are or where they live.

While the suggestions outlined above would go a long way toward advancing the state of skilled freelancers in America, none of these will be possible until government stakeholders–the Bureau of Labor Statistics included– acknowledge that their recent study was flawed and that they must finally recognize the growing economic impact of the skilled freelance workforce.

Brent Messenger is the vice president of Public Policy and Community Engagement at Fiverr.

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