A snapshot of the $1.2 trillion freelance economy in the U.S. in the age of Covid-19

Finance news

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More than one-third of the American workforce freelance amid the Covid-19 pandemic, contributing $1.2 trillion to the U.S. economy, a study by Upwork revealed Tuesday. This was a 22% increase since 2019 and it was fueled in part by an influx of younger, highly-skilled professionals seeking flexible alternatives to traditional employment. 

Upwork’s seventh annual study entitled Freelance Forward surveyed more than 6,000 U.S. workers over the age of 18 and found that 59 million Americans performed freelance work in the past 12 months, representing 36% of the U.S. workforce, an increase of 2 million freelancers since 2019. It was conducted June 15 to July 7.

 Key findings offer surprising trends. Among them:

  • Freelancing increases earning potential: Of those who quit their full-time job in order to freelance, 75% say they earn the same or more in pay than when they had a traditional employer.
  • Professionals are likely to consider freelance work in the future: 58% of non-freelancers who are new to remote work due to the pandemic are now considering freelancing in the future.
  • Young adults are turning to freelancing for economic opportunity: Amid a tough job market for recent college graduates, half of the Gen Z workforce (age 18-22) have freelanced in the past year, and of those, more than a third (36%) started since the onset of Covid-19.
  • More professionals are freelancing full-time: The share of independent professionals who earn a living freelancing full-time has increased 8 percentage points to 36% since 2019. 
  • Freelancing is helping to hone skills: 59% of freelancers have participated in skills training in the last six months vs. 36% of non-freelancers.
  • Companies of all sizes turn to freelancers: There is a burst in demand for people to support customer services as well as ecommerce development, web and mobile design.

According to Upwork president and CEO Hayden Brown, “It’s not surprising freelancing is on the rise in this era of uncertainty.”

She noted another driver is the growth in remote work. “We expect this trend to continue as companies increasingly rely on freelancers as essential contributors to their own operations.” 

Freelance jobs most in demand today are in computers/mathematics, and in finance/business operations, according to the report. Even before Covid-19, 26% of freelancers worked entirely remote and 46% worked remotely more than half the time.

“The changing dynamics to the workforce that has occurred during the crisis demonstrate the value that freelancing provides to both businesses and workers,” added Adam Ozimek, Upwork’s chief economist. Disruptions in education have made flexibility key during a time when demands for child and elder care, along with job responsibilities, have grown.

Society’s perception about freelance is also changing. Seventy-one percent of freelancers say perceptions of freelancing as a career are becoming more positive, the survey revealed.

Meanwhile, 67% of full-time freelancers say that freelancing has prepared them to cope with the uncertainty of the coronavirus pandemic better than those in traditional jobs.

Here’s a snapshot of the freelance economy: