Members of the U.S. workforce seem to be turning to the freelance economy after being let go from more traditional careers during the coronavirus pandemic.
According to a recent study by freelancing website Upwork, those who earn a living contracting full time has jumped 8 percentage points, to 36%, since 2019. The massive dislocations of the labor market, 860,000 Americans filed new unemployment claims in the latest week, have underscored the shift toward gig work.
“A lot of people are for the first time looking to freelance as a way to make a living during the pandemic because of the unique challenges of the pandemic and because of how flexible freelancing is,” Upwork’s Chief Economist Adam Ozimek told Yahoo Finance’s “The First Trade” this week.
Another lure of the freelance economy is the earning potential. According to Upwork’s study, 75% of respondents said they earn the same or more in pay than when they had a traditional employer.
Ozimek added that during the COVID-19 recession “average hourly earnings for freelancing has not taken a huge hit... that's going to be true for the economy, overall, wages tend to be pretty sticky.”
The rise of younger gig workers
The demographic of the freelance economy is also quickly changing due to the pandemic. In the study, freelancers consisted of 50% Gen Zers (age 18-22), 44% Millennials (age 23-38), 30% Gen Xers (age 39-54), and 26% Boomers (those over 55 years of age).
“During the pandemic, we've seen a significant surge in younger freelancers,” Ozimek stated. “A lot of people who graduated from college...it's really hard to find a new job in this environment...it’s easier to find one client than it is to find a long-term full-time position.”
So is the surge in freelancing here to stay? It just might be: Upwork’s data showed 71% said that perceptions of freelancing as a career are becoming more positive.
Brooke DiPalma is a producer for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma.