US workforce increasingly freelance, says report
The US workforce has changed fundamentally in the wake of the recession, with more independent workers than ever, according to analysis by MBO Partners.
According to the firm’s 2015 State of Independence report, the US now has almost 18 million full-time freelance workers—along with a further 12.5 million “side-giggers” who undertake part-time independent work.
The research shows that the independent workforce has grown by 12% since 2010, compared to just 7% growth in the labor force overall. While for some independent work is a necessity, MBO report that 79% are happier working independently. Additionally, one in seven non-independent workers are planning to go independent.
The growth in independent work in the US and Europe is partly fuelled by the “sharing economy” (or “gig economy”), a model based on providing products and services on a peer-to-peer basis, most famously via online platforms such as Airbnb and Uber. This model has come under criticism, as it does not offer workers the same protections as those of traditional employees.
In a recent speech on the economy, US presidential candidate Hillary Clinton said the gig economy is “creating exciting opportunities and unleashing innovation, but it's also raising hard questions about workplace protections and what a good job will look like in the future”. In June, the state of California ruled that Uber workers are employees and not contractors.
In his article for IZA World of Labor on employment protection, OECD economist Stefano Scarpetta argues that policymakers need to strike a balance between protecting workers and promoting efficient allocation of resources and productivity growth. He writes: “Reform of employment protection legislation should not be conducted piecemeal but should be part of a comprehensive reform package to promote greater adaptability of the labor market and better allocation of labor. Measures should include an adequate safety-net, backed up by effective re-employment services, to assist displaced workers in finding new jobs that pay well and lead to stable job opportunities.”
Read more on this story at Business Insider. The full MBO State of Independence report will be published in September and will be available here.
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