An estimated 25 million people in the United States call themselves ‘self employed.’
They might hold multiple jobs, run online businesses or other small shops, or function as independent contractors or ‘freelancers.’
The Promise and Peril of the Freelance Economy provides a comprehensive overview of how self-employment has changed in America, and reflects changes in our economy and society.
“Traditionally, self-employment has been countercyclical,” points out Frank Braconi, the chief economist in the New York City comptroller’s office. “When the economy went down—when wages and salaries went down—self-employment went up.” That was evidence that “people were being forced into self-employment as a response to losing their paid, salaried jobs.” But in New York City, at least, that has changed. “The increases in self-employment are not so countercyclical any more,” he says. They’re neutral—“which is indirect evidence that more of the self-employed today are self-employed through choice than was once the case.”
The article focuses mainly on three categories of self-employed:
Soloists – Not just creative arts professionals, but plumbers, electricians and physicians in solo practice
Microbusiness Owners: Traditional entrepreneurs who sell goods rather than their services
Permalancers: Independent Contractors who have loyal clients and long term contracts
A description of how entrepreneurs are coping with the high costs and difficulties in obtaining health insurance is especially interesting, especially the discussion of the increased interest in Health Savings Accounts (HSAs) to reduce their premiums. HSA’s are tax-free savings accounts that are tied to high-deductible insurance plans that Congress and President Bush created in 2003.
What’s the mix of Soloists, Microbusiness Owners and Permalancers in your community?