Though the monthly employment report is widely considered to contain the most significant economic data the government publishes, the payrolls report is missing an important, growing segment of the labor market: independent freelance workers.
Nearly one of every three American workers is a freelancer or fractional worker. These 42 million individuals are designing our nation's logos, landscaping its yards, programming its computer algorithms and walking its restless dogs. But while they contribute to our GDP just as full-time employees do these workers have been overlooked by the federal government's statisticians.
Why should the BLS bother with freelancers? Here are five reasons that tracking and reporting their numbers can lead to positive action and genuine change throughout the country.
1) We need data that accurately reflects our era.
BLS methodology is behind the times. The agency continues to dust off worker surveys originally administered under Franklin D. Roosevelt--surveys that contain conspicuously dated questions and misleading prompts such as "did you work last week?". As Sara Horowitz, founder and executive director of Freelancers Union, recently pointed out in an interview for PBS, "There's a whole workforce out there that doesn't fit easily into that box. For many freelancers, full-time employment is really a series of short-term gigs and projects."
With 40 percent of all U.S. workers expected to be freelancers by 2020, it's clear that the BLS needs to break free of the assumption that the 40-hour workweek is the be-all, end-all of employment. Our workforce data should be capturing the cyclical trends that often impact freelancers, feast sometimes closely following famine for many.
2) We need a definition of livelihood that reflects our era.
Millennials make up over a third of our domestic workforce, and many are finding that a 9 to 5 employment culture doesn't jibe with their lifestyle. These young professionals are striking out on their own, setting their own hours and pay rates, and promoting their skills with entrepreneurial zeal. A recent Millennial Branding poll found that 45% of Millennials value flexibility over pay.
Freelance opportunities, of course, can often provide the best of both worlds -- but we won't know if Millennials and other groups are balancing their livelihoods and their ideals until we start asking them. By updating its surveys, the BLS can start to delve into the values that are driving these massive labor market shifts.
3) The economic growth freelancers have led could inspire much-needed confidence in the U.S. economy.
Total freelancer earnings have increased 69% in the last year for U.S.-based workers, according to Elance's recently released Employment Report for September 2013. Hourly wages climbed 5%--which is ten times more than the national average as quoted by the BLS. Given the immense influence that the monthly BLS jobs report has on economists and investors, it's not much of a stretch to say that more inclusive numbers could be more encouraging numbers.
4) We need to promote the opportunity that the freelance market represents to workers.
Over 50,000 new freelance jobs were created in the last month, according to Elance's September Employment Report. None of them were counted in the BLS report released on Tuesday.
Though it's not the government's fashion to partner with the private sector in compiling economic data, if the BLS were to join with online job marketplaces to regularly measure freelance employment, it would foster more respect and visibility for the independent workforce. This could encourage more job seekers to find opportunity by exploring freelancing. In fact, some of the biggest increases in freelance hiring are currently occurring in states with high unemployment rates. The rate of freelancing hiring in Nevada, for example, which has the highest state unemployment rate in the country, has more than doubled over the last year.
5) Recognizing freelancers will encourage entrepreneurial attitudes among American workers and allow them to take more control over their professional lives.
There's a strong bias toward W-2 form-reported labor in the U.S. that runs all the way up to Capitol Hill, which left over 800,000 civil servants furloughed without pay during the government shutdown. The powerlessness of the federal employees provided an apt illustration of how traditional employers don't always prioritize their workers' best interests. When a government or company temporarily closes its doors for whatever reason, the employees are left to fend for themselves.
If the BLS were to acknowledge the freelance market, it would be subtly promoting a rising trend toward worker independence. The new world of work rewards entrepreneurial thinking. Quantifying the growing success that freelancers are enjoying will show that earning and spending through fiscal and policy-making crises is possible -- especially for workers who have control over their careers.
Many people across the country eagerly anticipate the BLS jobs data every month. Investors view them as a gauge of economic performance; lawmakers look to these numbers for policy guidance; and citizens find encouragement or disappointment in the employment opportunities they tally.
A more accurate jobs report, one that includes freelancers, and that truly reflects the values of today's workforce, could positively influence millions of Americans. It could inform more educated economic decisions, encourage more workers to view themselves as entrepreneurs, and provide a much more nuanced snapshot of the state of labor in the U.S. By taking steps to recognize and promote these opportunities, the federal government can provide a fuller view of our nation's employment picture.