Weekly interest and loan rates | Northwest stock contest 2003 Tax tips | Consumer affairs | Home values

Job Market
Self-employed, freelance workers on the rise in new job market

By Victor Godinez
The Dallas Morning News

E-mail this article Print this article Search archive

Recruitment executive Jon Davis is seeing the first signs of a recovery in the job market, but most of the employers he talks with aren't looking for full-time workers.

They want contractors — independent workers who are paid by the assignment.

"I would say there are more employers today than there were in the past that like the flexibility of a contingent work force," said Davis, branch manager in Dallas for Matrix Resources, an Atlanta-based technology placement firm.

The rising cost of supporting a full-time work force, diminishing worker-employer loyalty and the proliferation of technology are contributing to what may be a permanent shift away from the traditional employment model.

While most workers will continue to hold conventional jobs, data show that more are becoming self-employed as contractors, freelancers, consultants or owners of microbusinesses.

The self-employed historically make up about 7 percent of the U.S. labor force, but that could grow to as much as 10 percent over the next several years, said Ed Potter, president of the Employment Policy Foundation, a data research organization in Washington, D.C.

Those percentages may seem small, but an increase to 10 percent equates to millions of workers in a labor force of 146 million, he said.

Some employment experts argue that the shift is temporary, saying that the economic downturn pushed many workers into contract status and that they will return to traditional jobs.

Others see it as long term for several reasons.

Workers are discovering that the perceived primary benefit of a permanent job — stability — doesn't exist anymore, says author Dan Pink, who published "Free Agent Nation" in 2001.

"There's a base amount of insecurity in the work force, period," he said. "I can either manage that insecurity on my own or let someone else manage it for me and lay me off whenever they want."

At the same time, employers are reeling from the escalating cost of hiring and maintaining full-time employees, according to Dr. Mike Davis, a professor of economics at Southern Methodist University in Dallas. He pointed to exploding health-care costs as one of the biggest burdens on employers.

If those costs continue to rise, many employers may stop offering some benefits, which Davis said would demolish another pillar of the traditional labor model.

Historically, self-employment has been a bridge for many workers unable to find permanent positions in faltering job markets.

When the economy stumbled in the early 1990s, the number of people describing themselves to the Labor Department as self-employed rose, peaking at 9.2 million in April of 1991 and then falling below 9 million for the next few years as employers started hiring again.

"In the usual scenario, once the economy improves, self-employment goes down to a normal level," Potter said. "But I'm not sure that's going to happen. I think that the difference now is that the nature of work has made it more likely that this could be self-sustaining activity, rather than just an economic Band-Aid in the short term."

Experts say different dynamics are at play in this economic recovery.

One is that technology has advanced to where many workers have fully functioning home offices. Another is that more workers — the older, seasoned baby-boom population and young professionals who received entrepreneurial grounding during the tech boom — may feel confident enough to go into business for themselves.

But job stability could soon be less attainable, said Robert Morgan, president of the employment solutions group for Florida-based staffing firm Spherion Corp.

"We've told people as employers that we're not going to be as paternalistic," Morgan said. "We're going to put benefits management in your own hands. We're going to break the traditional contract of work for life. And guess what? Workers adapted, and they liked it."

Morgan said that researchers in Spherion's latest study on the emerging work force, completed in July, found that 54 percent of workers are confident in their ability to leave their current jobs, set up shop on their own and earn a living.

"We're seeing an overwhelming increase in people's confidence in being able to do that," he said.

Morgan said Spherion explored a trend it noticed in its first survey in 1997: the appearance of emergent and traditional workers.

"Emergent workers are looking at how they take charge of their careers," he said. "They want a good work-life balance."

In 1997, Spherion found that only 20 percent of workers were emergent. That number is up to 31 percent this year and is predicted to rise to 52 percent by 2007.

Copyright © 2003 The Seattle Times Company