America's economy is experiencing a fast, permanent shift towards self-employment across nearly every industry. Even as unemployment continues to decline, currently holding at a 2015 low of 5.1 percent, the independent workforce holds strong at 30.2 million Full- and Part-Time workers aged 21 and over. Add in Occasional Independents, those workers who do independent work on a non-weekly basis, and this number rises to an impressive 42.1 million strong.
Despite fears that independent workers would return to "traditional" employment as the economy recovered from the Great Recession, the independent population continues to grow -- nearly twice as fast as U.S. employment, according to MBO Partners 2015 State of Independence in America, the industry's only comprehensive dive into five years of independent workforce data.
We're in the middle of a sea change in how American employment works, and that's a very good thing.
As the traditional stability of employment has declined, it's increasingly up to the individual to ensure his or her own employment security. The primary reason independent workers give for their choice is that working for themselves means they are not under the control of a single employer or boss. In fact, 43 percent of Full-Time Independents say they are more secure working independently, up from 33 percent in 2011. This may be due to the fact that the average independent has four or more clients to diversify financial risk.
The 2015 State of Independence finds that 79 percent of independent workers said they are happier working for themselves than in traditional jobs. And while the numbers are impressive, in a way they aren't surprising, given that the average full-time independent worker earns more than the average American in a traditional job. What is surprising to many people is that income barely cracked the top five most commonly cited reasons that full-time independents said they chose to go out on their own. Far ahead of income were "controlling my own schedule," "more flexibility," "being my own boss," and "doing what I love."
In fact, there is widespread interest among the general population in going solo --1 in 7 non-independent Americans at least 21 years old are considering the move.
Independent work been widely reported on in the media, although the discussion has mainly centered around the pros and cons of the On-Demand Economy, highlighting well-known companies like Uber and new breeds of startups alike that promise nearly any service or good at the push of a button or tap of a smartphone. I champion these innovations and the freedom for people to work on their terms.
We've seen the dark side too; stories of misclassification costing employers tens of thousands of dollars and the growing ranks of "Unsatisfied Independents" who report that they'd rather be traditionally employed. This is true as well: independent work is not for everyone, and employers must increasingly seek to engage non-traditional workers compliantly.
There's no denying that independent work is a major positive contributor to the economy -- the revenues of American independents hit $1.15 trillion in 2015. This staggering figure represents 7 percent of U.S. GDP. If the independent workforce were a country, its "Gross Independent Product" would be almost equal to the GDP of Mexico.
Americans have always been known for their entrepreneurial spirit, and the growth of self-employment reinforces this idea. 2.8 million current independent workers (16 percent of the total Full-Time Independent workforce) plan on building bigger businesses in the next few years, creating a major pipeline of future employers in the U.S. economy.
Should independents grow at the same rate as they do today, the ranks of the self-employed will grow 26 percent to hit 38 million independent workers by 2020. Add in the subset of "occasional" independent workers, and those numbers swell to a massive 54 million, nearly 45 percent of the total non-farm U.S. workforce.
Independence represents a major change for America, and one that the data and analysis show is positive for both those directly involved and the country at large. As we move in to the 2016 elections and beyond, I challenge lawmakers to find better ways to adapt and serve this new 21st century independent economy.
This is what innovative Independent Workforce Solutions like those provided by MBO and others emerging in the market are already doing. In fact, the very need to support this new workforce is creating a new industry of its own supporting more jobs, deploying more capital and enabling Americans to do work they love, when and where they want.
The future of work is already here, and the innovation and entrepreneurship it will unleash are unprecedented. Will the trend towards independence continue? All signs point to "yes."