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September 22, 2020

The Impact of COVID on the Freelancing Economy

By Lili

Upwork just released its annual study on the landscape of the freelance economy. Bottom line: all the numbers are going up, and freelancing is shaping up to become the way of the future 💪

You’ve all probably already heard of (or are currently using) Upwork. But did you know that besides being one of the leading online talent solutions, Upwork releases every year a thorough study of the status of the US independent workforce? Well, the 2020 study just came out, with a specific focus on the impact of the COVID Pandemic on the freelance economy. Here are the takeaways.

(You can find the press release here, and if you really want to dig in, here’s the full study.)

 

Freelancing is the future.

Bottom line: freelancing is becoming increasingly attractive to every generation in the US workforce. Boomers see it as a smooth way to transition into retirement, and Gen-Zers (18 to 22), are straight-up choosing the freelance lifestyle as soon as they enter the marketplace, with 50% of that age group reporting having freelanced in the past year. Millennials follow with 44%, Gen X with 30%, and 26% of Boomers.

 

Newcomers

In 2020, 59 million freelancers (36% of the US workforce) have contributed $1.2 trillion to the US economy, which is a 22% increase from 2019. Thirty-six percent of freelancers are now doing it full-time, which is also an increase of 8 points since 2019. It’s still early to fully grasp how much COVID has led to this shift in the workforce, but some early indicators show that a year of economic uncertainty, remote-schooling, and work from home has made many American workers rethink their relationship with their job in particular, and their work life in general. 58% of workers with full time jobs who started working remotely because of the pandemic, are now considering freelancing. Taking care of a family member, increased productivity, saying goodbye to commuting and earning extra income to deal with a shaky economy are the main driving factors. Another interesting data point: 12% of the American workforce started freelancing since the beginning of the pandemic and 96% of them are already reporting positive results.

 

Money

65% of people who left an employer to start freelancing say they are making MORE money now than they were at their traditional job (10% say they make about the same – 25% say they’re making less), and 57% of them report it took them less than 6 months to get to that point. The overall median hourly rate for freelancers in 2020 is $20 ($25 for skilled workers) and 44% of freelancers say they have raised their rate in the past year. 

 

Lifestyle

The study shows that freelancers seemed to have been better prepared, emotionally and financially, to cope with COVID pandemic. On all the topics included in the survey: well-being, lifestyle, mental health and finances, freelancers report a lower negative impact from the pandemic than non-freelancers. Being accustomed to economic uncertainty and already trained to work remotely seems to have played a factor, helping freelancers cope with the lockdown better than non-freelancers. 65% of skilled freelancers say their hours have stayed the same or increased since the beginning of the pandemic.

 

Societal change

If there’s one number to leave you with, it’s this one: 86% of freelancers say the best days of freelancing are ahead. Well, actually here’s another one: 71% of freelancers say they believe the perception of freelancing as a career is improving in American society. But there is still a lot of work to do to make sure freelancers can enjoy the same benefits and access as full-time employees. Lili agrees. And we’ll be right there by your side, doing everything we can to become part of the solution.

 

Banking Designed for Freelancers

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