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Number of Freelancers in the US 2022/2023: Demographics, Platforms, and Trends

What is the number of US freelancers in 2020?
Freelancers are on their way to becoming a major part of the American workforce. In a 2020 report, an estimated 59 million Americans have freelanced in the past year, which is equivalent to 36% of the country’s entire workforce. The number of freelancers in the US is continuously growing and is expected to exceed 90.1 million by 2028.

Freelancers are a vital part of the American workforce. Hundreds of companies are continuously hiring gig workers both in short-term and long-term contracts. A huge portion of the US population is also considering freelance work, especially during the pandemic when many people have more time on their hands as they stay at home.

This article will explore the gig economy, primarily the number of freelancers in the US and will go into the main categories below:

Number of Freelancers in the US by 2028

The median rate of freelancers in the US is $28 per hour. This rate is higher than 70% of workers in the overall US economy (CNBC, 2019). This fact alone is expected to convince more Americans to leave their office jobs for remote work.

But how attractive is freelance work, really? How many freelancers will join the American workforce in the next 8 years?

In a survey conducted by Upwork and Edelman, the majority of the American workforce will be freelancing in the future. In fact, basing estimates on the annual growth rates of 4.2% in 2016 and 0.6% in 2017—if the growth rate is close to constant (it’s actually increasing)—projections forecast that 90 million Americans will be freelancing by 2028 (Edelman Intelligence).

Why Do People Freelance?

With the continuous rise of Internet users in the US, people between the age of 18 and 29 are 53% more likely to find a job using their smartphones. For American adults, that figure is 28% (Federal Reserve Bank of St. Louis, 2019). Another study found that more than 70% of freelancers find jobs through online markets and gig economy websites, as well as freelance platforms (WebsitePlanet, 2021).

Working as a freelancer is a long-term career choice among 53% of Gen X workers. Research by Edelman Intelligence (2021) state the main reasons why people per generation chose to start doing gig work:

Source: Edelman Intelligence/Upwork, 2020

Gen Z and Millennial freelancers agree that their top answer is that freelancing gives them a temporary way of making money, with 64% and 54%, respectively. On the other hand, 53% of Gen X workers view freelancing as a long-term career choice. As previously mentioned, freelancers get more income than traditional American workers, and freelancing provides more flexibility to their schedule.

In another study, freelancers were asked the same question but segregated their answers by gender. Men love being their boss more than anything—69% of the male respondents found this as their common answer. On the other hand, 74% of women freelancers said that they prioritize flexibility over anything (MBO Partners, 2020). Save for single-digit changes in some of the responses, MBO’s 2020 survey results for this particular question yielded the same results as that of prior years. However, the 2020 study noted a decline in the number of women who are working independently, from an average of 50% throughout the previous years the study was conducted to only 42% in 2020. It is theorized that this is due to women working in roles that were significantly impacted by the COVID-19 pandemic.

Living expenses are also a major factor in why people shift from traditional office desk jobs to freelance work. As housing and food cost continues to skyrocket among top cities in the US, remote work is becoming a more practical option for average Americans. With remote work, freelancers can choose to move out of their cities without sacrificing their jobs. However, not all cities are freelancer-friendly. Neighborhoods.com’s report (2019) listed the best cities for freelancers, determining their ranking by analyzing data across five metrics: average internet speed, median rent, income taxes, number of coffee shops per capita, and ease of getting around that is based on the average of combined walkability, transit, and biking score. According to the list, Spokane, Washington ranked as the best city for freelancers.

Top 10 Best Cities for Freelancers

City | State Median Rent Internet Speed Income Tax Coffee Shops Getting Around
Spokane, WA $903 43.52 $8,739 16.4 44
Vancouver, WA $1,327 52.89 $8,739 18.1 45
Ft. Lauderdale, FL $1,516 59.35 $8,739 12.4 51
Tempe, AZ $965 39.76 $10,089 15.7 57
Scottsdale, AZ $1,237 68.57 $10,089 15.8 37
Orlando, FL $1,290 38.83 $8,739 17.4 43
Las Vegas, NV $977 37.50 $8,739 25.3 40
San Antonio, TX $911 61.82 $8,739 5.6 39
Hialeah, FL $1,251 63.63 $8,739 1.7 53
Tampa, FL $1,120 43.18 $8,739 11.4 46

Freelancers by Age & Gender

Most freelancers in the US are young. More than half of their population or 63.6% are under the age of 34. Moreover, 39% of freelancers are under the age of 24. Only 20.9% of them said that they are over 45 years old.

Males dominate the number of American freelance workers. They take up 59% of the total number of freelancers while women sit at 41% (Forbes, 2019). Men tend to occupy a large portion of the freelance workforce between ages 18 and 34, but as the age grows, women freelancers take the lead.

Freelance Platforms: Work and Get Paid

Freelancers contribute to about $1 trillion in the US economy, which is equal to 4.8% in the country’s total GDP, putting the gig economy toe to toe with other major industries. In our previous article, we listed the best freelance platforms where companies can hire freelancers best suited for your companies’ needs:

Most Popular Freelance Platforms

  1. Fiverr – Started off as a service with the simple premise of offering $5 worth of quick jobs, Fiverr has since become an award-winning freelance service marketplace. Read our review of Fiverr for more details.
  2. Upwork – Known as oDesk in its formative years, Upwork is a trailblazer on the freelancing front, essentially offering a platform for freelancers before the remote working boom. Learn about Upwork‘s ecosystem through our review.
  3. Freelancer.com – An excellent domain name kept Freelancer.com top-of-mind for anyone claiming to be a freelancer, and the freelancing and crowdsourcing platform has withstood the test of time and remained one of the pillars of the industry. You can read about Freelancer.com‘s features and offerings here.
  4. Envato Studio – Designers, developers, and creatives often gather on their own freelancing platforms and marketplaces, such as Envato Studio, which we also reviewed as one of our top freelance platforms.
  5. PeoplePerHour – With their core paradigm in their domain name, PeoplePerHour excels in providing freelance experts to clients. PeoplePerHour also nabs one of our top spots for freelance platforms.

Freelance platforms also provide easier payment methods for freelancers regardless of their payment structure. This is especially because freelancers in the US have different preferences in terms of payment structure (Edelman Intelligence, 2019).

Typical Payment Structure for Freelancers in the US

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Source: Statista, 2019

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Companies can then utilize these websites’ payment support systems for safe and secure transactions. Other than these freelance platforms, there is a wide array of payment methods both employers and freelancers can use.

PayPal is the top payment method with 70% of the respondents saying that they have used the site to receive their payment. This is followed by credit or debit card with 40% and bank transfer at 39%. Surprisingly enough, even though freelance platforms have built-in payment support systems, only 23% of the respondents said that they prefer being paid through these sites (Paypal).

Industries with the Most Freelancers

Freelancing provides a diverse set of activities for people who want to be a remote worker, with the largest type of freelance work being skilled services. The arts and design industry has the biggest percentage of freelancers at 75%. Other industries with a high percentage of freelance workers are entertainment (55%), construction (52%), and architecture, engineering (42%) (Edelman Intelligence, 2019).

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Share of Freelance Workers in the U.S by Industry

Share of Freelance Workers in the U.S by Industry
Arts & Design: 75%

Arts & Design

75%
Share of Freelance Workers in the U.S by Industry
Entertainment: 55%

Entertainment

55%
Share of Freelance Workers in the U.S by Industry
Construction: 52%

Construction

52%
Share of Freelance Workers in the U.S by Industry
Architecture/Engineering: 42%

Architecture/Engineering

42%
Share of Freelance Workers in the U.S by Industry
Computers/Mathematics: 42%

Computers/Mathematics

42%
Share of Freelance Workers in the U.S by Industry
Transportation: 35%

Transportation

35%
Share of Freelance Workers in the U.S by Industry
Retail/Sales: 32%

Retail/Sales

32%
Share of Freelance Workers in the U.S by Industry
Education: 32%

Education

32%
Share of Freelance Workers in the U.S by Industry
Finance/business operations: 31%

Finance/business operations

31%
Share of Freelance Workers in the U.S by Industry
Management (of any industry): 29%

Management (of any industry)

29%
Share of Freelance Workers in the U.S by Industry
Food/prep service: 29%

Food/prep service

29%
Share of Freelance Workers in the U.S by Industry
Healthcare: 27%

Healthcare

27%
Share of Freelance Workers in the U.S by Industry
Office work/administrative support: 25%

Office work/administrative support

25%
Share of Freelance Workers in the U.S by Industry
Healthcare support: 25%

Healthcare support

25%
Share of Freelance Workers in the U.S by Industry
Production/manufacturing: 21%

Production/manufacturing

21%

Source: Upwork and Freelancers Union, 2019

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Also, a new quarterly series called Upwork 100 released the 100 hottest skills demanded by employers in the current freelance market in the US. This list is updated quarterly and here are the top 10 skills included:

  1. .NET Core
  2. TypeScript
  3. Landing pages
  4. eBooks
  5. Android
  6. Electronic design
  7. Presentation
  8. Sketch
  9. Research
  10. Technical recruiter

According to Adam Ozimek, Ph.D., and chief economist at Upwork, the top 100 list is culled from within to rank the top 100 fastest-growing skills based on year-over-year growth rates in freelancer billings for Q3 2019 versus Q3 2018 (Upwork, 2019).

Time Commitment for Freelancers

Employment status among freelancers vary. This is evident in the survey conducted by Morning Consult.

More than half or 58% of the respondents said that they only work for 30 hours or less per week. This could mean that these freelancers are only working part-time. 7% of the respondents said that they work for more than 50 hours per week. We can also assume that these freelancers are working on multiple projects at the same time. In the same study, 56% of the freelancers answered that they are currently working on 2 projects or more.

Gig Economy by Revenue

In 2019, the freelance economy in the US was valued at approximately $1 trillion, and the average hourly rate of a freelancer is much higher than 70% of the American workforce. In another study by Morning Consult, they found out that 55% of freelance workers earn under $50,000 per year. Meanwhile, 42% percent said that they earn $50,000 or more. What is more, those who earned a high school diploma earn a higher hourly rate than freelancers with bachelor’s degrees (Payoneer, 2020).

Source: Payoneer, 2020

Freelancing may be a lucrative job, but not everyone gets paid. PayPal reported that a staggering 50% of freelancers experienced not getting paid. In the same report, the top reason why freelancers aren’t getting paid is that they are not taken seriously by their employers.

Gig Economy Trends

So do these statistics show any significant insights when it comes to the future? We’ve looked into some of the future trends in freelancing that show a much higher staying power compared to the others.

AI and automation will play a major role in the industry (Buffer, 2020). As the number of IoT grows and cloud technologies become more relevant, we can see that more freelancing processes may become automated. Processes like billing, invoice management, and project management can be heavily influenced by automation.

Prior to the pandemic, co-working spaces were expected to become a major part of the lives of freelancers. But with lockdowns and social distancing restrictions in place, there has been a 72% drop around the world in the number of people working in such spaces (Entrepreneur, 2020). In the age of remote work, people leaning into starting a career as a freelancer will continue to increase. A major problem that greenhorns in the industry will face is the lack of social interaction. According to Buffer, 21% of freelancers said that the number one struggle of working remotely is dealing with loneliness. This is one of the reasons why the demand for co-working spaces continues to gain traction (Buffer, 2020).

With the current state of the relationship between freelancers and employers, trends such as flexibility in work schedules and the ability to work remotely are expected to continue. And with the continuous growth in the number of freelancers in the US, it is expected that freelancing will change the employment landscape that is impacted by record unemployment rates due to the COVID-19 pandemic. For anyone interested in starting freelancing, our list of the 20 best freelance sites for beginners is a good starting point.

 

References:

  1. Booth, B. (2019, October 3). Skilled freelancers, earning more per hour than 70% of workers in US, don’t want traditional jobs. CNBC.
  2. Edelman Intelligence. (2017, September 28). Freelancing in America: 2017. SlideShare.
  3. Bayles, M. (2019, January). Will your smartphone get you a job? Federal Reserve Bank of St. Louis.
  4. Warner, A. (2021, January 27). 60+ freelance stats – Why the gig economy is growing in 2021. Website Planet.
  5. Edelman Intelligence. (2021, March 22). Freelance forward 2020. Upwork.
  6. MBO Partners. (2020). The state of independence in America 2020. MBO Partners.
  7. Neighborhoods.com Staff. (2019, September 18). America’s best cities for freelancers 2019. Neighborhoods.com.
  8. Younger, J. (2019, December 22). The last five years of ‘freelancing in America’: What’s changed? Forbes.
  9. PayPal. (2018). U.S. freelancer insights report. PayPal.
  10. Edelman Intelligence. (2019, September 23). Freelancing in America: 2019. SlideShare.
  11. Upwork. (2021, March 24). Upwork debuts the Upwork 100, ranking the top 100 in-demand skills for independent professionals. Upwork.
  12. Morning Consult. (2021, March 24). National tracking poll #180825. Morning Consult.
  13. Payoneer. (2020). The 2020 freelancer incomer report. Payoneer.
  14. Buffer, & AngelList. (2020). State of remote work 2020. Buffer.
  15. Entrepreneur NEXT. (2020, September 30). Will Co-working studios survive COVID-19? Entrepreneur.
Astrid Eira

By Astrid Eira

Astrid Eira is a resident B2B expert of FinancesOnline, focusing on the SaaS niche. She specializes in accounting and human resource management software, writing honest and straightforward reviews of some of the most popular systems around. Being a small business owner herself, Astrid uses her expertise to help educate business owners and entrepreneurs on how new technology can help them run their operations. She's an avid fan of the outdoors, where you'll find her when she's not crunching numbers or testing out new software.

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