How the Coronavirus Has Changed Freelancing

Study shows self-employment up during time of economic stress

Roy Maurer By Roy Maurer October 9, 2020
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​A significant share of the labor force began freelancing for the first time at the onset of the coronavirus pandemic. Meanwhile, social distancing measures led traditional gig workers to cut back on work, according to an annual study of the freelance workforce.

Edelman Intelligence conducted the research for Upwork, a freelance-jobs platform in Santa Clara, Calif. It surveyed 6,000 working freelancers and employees between June 15 and July 7.

Thirty-four percent of freelancers polled started working in that capacity in early March, when the coronavirus shuttered the economy. Normally, around 10 percent of freelancers begin freelancing in any six-month period, according to Upwork. But currently, 28 percent of freelancers, or about 10 percent of the U.S. labor force, have had to stop freelancing as a result of the COVID-19 crisis.

"As a result of these two countervailing trends, the share of the labor force freelancing overall in 2020 has increased slightly compared to last year, from 35 percent to 36 percent, but the composition of this workforce has significantly changed," said Adam Ozimek, Upwork's chief economist.

Freelancers can be categorized as full-time independent contractors, temp workers employed by staffing firms, gig workers, project-based workers, self-employed business owners, and people working in a mix of these areas and in traditional employment.

"Freelance work can vary from delivering groceries a few times a month to working as a full-time programmer or accountant," Ozimek said. "Because of this diversity in the workforce, there is no one way that the pandemic impacted freelancing as a whole. Instead, as some forces resulted in new opportunities and demand for one type of freelancer, the same forces also decreased demand for another."

It's been regularly cited that the growth of the gig economy represented by on-demand services, such as Uber's ride-hailing or TaskRabbit's freelance-labor matching, have pushed up the numbers of freelancers overall, but many of these workers have lost work this year due to social distancing precautions. Other researchers have found that ride-sharing and ride-hailing use declined tremendously since March, but jobs for on-demand services like grocery delivery have skyrocketed.

The Upwork study shows that many workers who said they had to give up freelancing were doing that work on the side, in less-skilled work conducted in person. In contrast, new freelancers are largely in more full-time, higher-skilled remote positions due to corporate America's forced shift to remote work.

"To adapt to the changes and uncertainty of COVID-19, we saw many professionals enter the freelance workforce for the first time," Ozimek said.

Hayden Brown, the president and CEO of Upwork, said, "It's no surprise that freelancing is on the rise, especially now that we have fully disentangled where we work from what we work on. The data shows that independent professionals are benefiting from income diversification, schedule flexibility and increased productivity."

Additional highlights of the Upwork study include:

  • 59 million U.S. workers performed freelance work in the past 12 months, an increase of 2 million people year over year.
  • The composition of the freelance workforce is getting younger, as 50 percent of Generation Z (ages 18-22), 44 percent of Millennials (ages 23-38), 30 percent of Generation X (ages 39-54), and 26 percent of Baby Boomers (ages 55 and older) freelanced in the past year.
  • The top two occupations for new freelancers are in technology and finance/business operations.
  • 96 percent of new freelancers say they will do more freelancing in the future.
  • 58 percent of workers who are not freelancers and are new to remote work due to the pandemic are now considering freelancing in the future.

Choice or Necessity?

With millions of permanent, full-time jobs eliminated this year, freelancing has likely become a means of survival for some.

"Some like the autonomy and control it provides, while others find it lacks employment security," said Arne Kalleberg, a professor of sociology at the University of North Carolina at Chapel Hill who focuses on the work experience. "I think its appeal varies by age, with younger people more drawn to the entrepreneurship factor, and also whether or not someone is doing this work as their main job or whether it's supplementary. I think a lot of people are doing it by necessity."

He noted that there are also differences in the desirability of gig work. "It depends on whether or not the worker has skills that are marketable," he said. "IT professionals probably love it, whereas Uber drivers vary on whether they really want that kind of work."

For employers, the upside to the freelance model is that the services of the worker are gained without having to provide training or benefits, Kalleberg said. The downside is that the labor force may not be as stable when it's needed.

He added that the model is ripe for exploitation, especially on the platforms that control the economic transactions between workers and employers.

No Free-Agent Nation

Futurists have long predicted that the U.S. would become a free-agent nation, and while more people are freelancing, that forecast has not come to pass.

"The notion of a free-agent nation is overrated," Kalleberg said. "We don't know exactly how big the freelance workforce is, but it's still a relatively small segment of the total workforce. The vast majority of people work for somebody else, and the trend in self-employment is still pretty flat. Studies indicate that most people who freelance do it as a supplement to their main work."

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