A third of Americans contribute to the $1.3T freelance economy

Nearly 40% of Americans performed freelance work in 2022. That’s up nearly 10% from 2021, and a third of them make freelance their full-time work.

That’s a remarkable spike from 2020 when the total was one in four.


Where those figures go next will say a lot about stubbornly unanswered questions surrounding the US economy. Economic downturns have fueled contract labor booms for the last 30 years. One of the biggest questions at this stage of American pandemic life is how rough the water ahead will actually be. Add freelance work to the long list of economic trends the pandemic has accelerated.

“That means that more and more people are finding their careers as freelancers today,” said Margaret Lilani, VP of Talent Solutions from Upwork, a publicly traded platform for connecting employers to independent contractors. According to the company’s recently released annual report, freelance labor represented $1.3 trillion of the US economy.

Choosing a preferred schedule and workload marks a generational shift, the report argues. Upwork CEO Hayden Brown has said that nearly half of Gen Z workers already freelance in one form or another. Brown predicts that a majority of the country’s workforce will be freelancing by 2027.

Contract labor is a tale of two lifestyles — and varying terms

Top earners are in knowledge work — imagine the elite independent graphic designer or the influential salaried professional who books speaking gigs on the side. Those are the people who hawk their skills on Upwork. But the fastest growing segment of contractors earn poverty wages, typified by the sharing economy hustler or the gig-working creative.

These are two vastly different narratives that nonetheless still contribute to the freelancer economy. In all these examples, women outpaced men in their reliance on flexible contract work.

“Together, these trends suggest that the long-run growth” in independent contractors, according to a July 2019 paper produced for the IRS, “may represent a structural shift in the labor market, particularly for women.”

It’s worth settling on a bit of vocabulary for all these short-term, project-based workers. Freelancers, contractors and consultants are all subtly different terms that imply similarly mixed contributions. New generations spawn new terms. In 1985, labor economist Audrey Freedman called them “contingent workers.”  Then, the term “gig economy” was coined in 2009 to describe the growing number of professionals leveraging online platforms to cobble together full-time wages on their own terms.

These terms all feel incomplete because, perhaps, the clearest way to differentiate the nearly 60 million Americans Upwork says freelanced in 2021 is their level of control. The web developer choosing what projects she undertakes is an economic winner designing work in her own image. The grandmother picking up seasonal work to combat a burst of inflation could be taking what she can get. Both are contractors, even if all they might share in common is tax compliance: They both likely receive “1099 income” — jargon to describe the tax form for contract work, which is different from the so-called W-2 that full-time employees receive from their employers.

Leave a Comment