MBO Partners released their 2017 State of Independence report today.
In 2017, the total number of independent workers (self-employed, freelancers, independent contractors, etc.) in American rose to 40.9 million, up 2.8 percent from 2016.
And MBO Partners is forecasting the independent workforce will continue to grow over the next 5 years, reaching 47.6 million in 2022.
It's the 7th year MBO Partners has conducted this study, which gauges the size, growth, motivations and attitudes of independent workers. We work with MBO Partners on this study.
While the overall independent workforce continues to expand, how it's expanding is quite interesting and reflects broader cyclical and structural forces impacting the overall economy.
1. The number of full-time independent workers declined for the second straight year.
The number of full-time independents (those working as independents at least 15 hours per week in an average work week) declined by 4.1 percent to 16.2 million in 2017.
The main driver of this decline is the strong jobs market is allowing "reluctant independents" - people who work independently but would prefer a traditional job - to return to traditional employment.
In 2017 the share of full-time reluctants declined to its lowest level of 24%, down from 26% in 2016 and 34% in 2012.
In addition to reluctants returning to traditional jobs, so did some independents who are highly satisfied with independent work. Despite being highly satisfied, opportunities presented by the strong jobs market lured them back to traditional employment.
2. The number of high income independents continues to grow.
Despite the decline in full-time independents, the number of full-time independents who earned $100,000 or more increased for the sixth straight year.
In 2017, 3.2 million full time Independents reported making more than $100,000 annually, up 4.9 percent from 2016. This group has grown steadily throughout the study time frame and now represents nearly one in five full time Independents.
The tight labor market and ongoing economic expansion is enabling those whose skills are in demand to get more work, and to command a premium for their services. It's also leading to more highly skilled people to choose independent work over traditional employment.
3. The number of part-time independents also declined.
The number of part-time independents (those working as independents less than 15 ours per week in an average work week) declined to 11.8 million in 2017 from 12.4 million in 2016.
This again was largely due to the strong job market pulling people back to traditional employment.
4. The number of occasional independents continued to surge.
Occasional Independents (those working irregularly or sporadically as independents but at least once per month) soared 23% to 12.9 million, up from 10.5 million in 2016.
Stagnant wages, declining middle class jobs and rising costs (particularly for housing, education and healthcare) are resulting in more Americans supplementing their income through regular but occasional independent work.
It's clear that both cyclical and structural forces are impacting independent work.
The cyclically strong job market and the related "war for talent' are impacting the growth of the independent workforce several ways.
It's pulling some independents back to traditional work. At the same time, it's enabling independents with in-demand skills to find more work and earn more. This is making independent work more attractive to highly skilled workers.
The structural shift towards independent work is also made clear by the fact that overall independent workforce continues to grow despite an extremely strong traditional job market.
The unemployment is 4.3%, a level last seen in the late 1990's and only reached a couple of times since 1960. The number of open jobs, a bit over 6 million, is at an all-time high.
Yet despite this historically strong jobs market, more people continue to join the independent workforce.
This is due to a combination of structural factors that are leading to growing numbers of independent workers.
These include such factors as changing demographics, social shifts, organizations shifting to contingent talent, technology enabling independent work, wage stagnation, the hollowing out of middle class jobs and many others.
We'll have more on this study in the coming weeks.