The U.S. freelance industry is booming.
Americans, particularly younger Americans, are joining the freelance economy in droves thanks to new developments in technology, work flexibility and a host of other factors, according to the sixth annual Freelancing in America report, a survey co-commissioned by Upwork and the Freelancers Union.
“With a strengthening labor market, we will increasingly see people work on the terms that they prefer, and for many that means freelancing,” Adam Ozimek, Upwork’s chief economist, said in an announcement. “The stronger economy provides more optionality and opportunity, and as a result, more people are seeing freelancing as a long-term choice.”
They include dog walkers, Etsy sellers and computer programmers — and they don’t necessarily ascribe to the “gig worker” label. The survey found that they prefer the terms “independent worker” or “self-employed.”
With all gigs considered, the freelance industry raked in nearly $1 trillion in 2019, towering over other mainstay industries such as mining, transportation and construction. The report also found that 35% of all U.S workers, aka 53 million people, freelanced in 2019.
Of those freelancers, nearly 80% said they do so “exclusively,” an indicator that for millions of workers freelancing is not a stop-gap or a Plan B. It’s a career choice.
How to Cash In on the Freelance Economy
Want a piece of that $1 trillion pie? Here’s how to get your footing in the freelance industry.
Build a Portfolio on Freelance Websites
In the budding stages of your freelance career? You may be most comfortable with freelance platforms, which make it easier to find clients. And that’s a big pain point for those new to the industry, Laura Poole told The Penny Hoarder.
Poole is a non-fiction editor with more than two decades of full-time freelance experience. She trains other freelancers at conferences and workshops across the nation.
Freelance websites “should be a launch point,” she said, warning that the steep fees of most sites aren’t always sustainable. They compound in the long term when a lack of traditional benefits and quarterly taxes are taken into consideration.
Still, they’re a place to start. Upwork is one of the best-known sites, but it isn’t the only one. The top freelance websites include Fiverr, Freelancer and Guru. All have similar service fees that run between 10% and 20% of each project.
Network Through Professional Organizations
Freelancing is all about networking, Poole says. The more people you know, the less you’re beholden to the ever-growing fees of freelance websites.
“Figure out who your ideal client is,” she said. “Then go directly to your clients.”
Several industries popular with freelancers have national organizations, such as the American Advertising Federation and the Society of Professional Journalists. Each organization has local chapters that host events and offer resources to members. Their websites often post niche jobs and freelance opportunities as well.
Freelancers Union, the organization that co-commissioned the survey, helps freelancers with job boards, freelancing guides, assistance with health care, portable retirement benefits and more.
Use Apps to Land Gigs
If you’re not up for pitching companies in hopes for a big-ticket project, start small with gig work — what the freelance study deemed “unskilled services.”
Numerous apps specialize in flexible, service-industry work. The most popular gigs include ridesharing, delivering packages or food and running errands around town.
The Penny Hoarder writes extensively about gig apps. You can compare the top companies with our guides and resources:
And for folks in Chicago, Uber recently launched a gig-work app called Uber Works, which pairs job seekers with temporary gigs at local businesses.
Keep Up With Job Boards
As freelance and remote jobs are booming in popularity, more job boards are starting to specialize in aggregating those types of opportunities. While they’re not as comprehensive as the freelance platforms, they do compile freelance jobs… for free.
- Remote.co: Remote.co doesn’t post 100% freelance gigs, but it does post 100% remote jobs, many of which are freelance. Industries include clerical work, editing, writing, marketing, software development, engineering and customer service.
- The Penny Hoarder’s Work-From-Home Job Portal: Our journalists personally vet every single job and company that we write about on our Work-From-Home Job Portal. Our focus is on hourly jobs at legitimate companies. Plenty of our posts are about freelance work, but we also include full-time and part-time gigs. Customer service, writing, editing, marketing and IT jobs are by far the most popular.
- Mediabistro: As its name implies, Mediabistro is focused on jobs in the media industry, an industry ripe for freelance work. You can filter out exactly what you want to see — freelance, full-time, part-time, by industry and by location.
If all else fails, there’s always the old-fashioned way, of course. A cold pitch never hurt anyone. So find a business or publisher in your field and send them an email. Our guide on how to pitch a story walks you through exactly what to include in the email and gives tips on how to find the right people to pitch.
“A polite, cold email can get good results,” Poole said.
Challenges of Freelance and Gig Work
While the industry’s earnings and workforce are soaring, freelancing doesn’t come without setbacks.
The survey found that 59% of freelancers describe living “paycheck to paycheck,” compared to 53% of non-freelancers, and they’re more likely to have debt — especially student loans. That’s likely because freelancers tend to be young and highly educated.
“More than one in three Americans are freelancing,” Caitlin Pearce, executive director of Freelancers Union, said in the announcement. “But this workforce continues to face significant challenges in being able to access affordable healthcare and fundamental protections so they can get paid fairly and on time for the work they do.”
Finding Health Care
Health care access for freelancers has been a major issue for years. A 2016 study also by Upwork noted that 20% of full-time freelancers were uninsured, and that debt and access to benefits were key industry pain points.
In the U.S., employers are major providers of private health insurance. Though there are many upsides to self-employment, freelancers are left to foot growing health insurance costs on their own.
The Penny Hoarder outlined six ways freelancers can find affordable health care, including Freelancers Union benefits, private insurance plans for the self-employed and gig companies that provide health insurance for their workers.
Working Outside the 9-to-5
Flexibility is surely one of the largest draws to the freelance lifestyle. But for 46% of freelancers, that flexibility is a lifeline.
Many freelancers in the survey reported health issues, caretaker responsibilities and other familial reasons that keep them from working traditional jobs.
“Freelancing gives them the flexibility they need because they’re unable to work for a traditional employer,” the study said.
Some disabled workers end up in the gig economy — not always by choice. The Penny Hoarder spoke with several policy experts about working while on disability benefits and found that some people with disabilities scrape by with gig work because they face discrimination in the traditional workplace.
Getting Out of the Gig Economy
Independent work is often romanticized as a way to break the 9-to-5 chains, but the reality isn’t always so glamorous.
The survey found that 60% of freelancers, a solid majority, are in the field by choice. But the flipside means that 40% of freelancers are doing so out of necessity.
Relying on income from inconsistent gig or freelance work could be financially dangerous in the long-term. Rideshare drivers, for example, may love the ability to take fares whenever they want. But if something goes wrong, say a car accident or a breakdown, they’re left to pay for the repairs and to find a new way to cover rent by the end of the month.
To avoid such issues, The Penny Hoarder recommends creating a side hustle exit plan that establishes clear financial or career goals before taking on the additional work.
As the freelance economy continues to balloon year after year, the perks — and there are many — are sure to entice many workers.
Just mind the growing pains.
Adam Hardy is a staff writer at The Penny Hoarder. He specializes in ways to make money that don’t involve stuffy corporate offices. Read his latest articles here, or say hi on Twitter @hardyjournalism.