Counting uncounted freelancers

If a tree falls in the forest, does it make a sound? If many, many people work in temporary situations, but don't fall into tidy columns in U.S. Labor Department reports, do they matter?

That's a problem, says Sara Horowitz, who heads the Freelancers Union in New York. By some estimates, this contingent, independent workforce may be as high as 30 percent, but the problem is that it's always an estimate. The last Bureau of Labor Statistics count was 2005. Here's the rub: Most protections afforded to working people come through the employment system, but these independent workers have no protections.

(See my story about this in Monday's Philadelphia Inquirer.)

Most freelancers (or consultants, or contract workers, or day laborers, or temps) lack access to employer-sponsored health insurance, which is still the main way that Americans are provided with healthcare. Their options? Pay high rates on the individual market if they can afford it, or do without, which means that everyone else pays for them if they wind up uninsured in the emergency room. In 2009, 18 percent of the freelancers the group surveyed had to give up health insurance.

Independent workers often don't can't collect from their clients. In 2010, 44 percent had trouble getting paid for their work. That's lost compensation for them, and lost tax revenue for governments. Yes, there is a small claims process, but most freelancers can't afford it. When employees don't get paid, they can call on the U.S. Labor department's wage and hour division for help. Not these workers. They can switch to rice and beans.

Freelance work can be quite lucrative on a per-hour basis, but getting hours of work is a challenge. When independent workers have dry spells, there is no safety net of unemployment insurance. In 2009, 81 percent of independent workers didn't have enough work. Most of them drained savings or racked up credit card debt."

A freelance graphic artist in Glenside wrote, "2009 was brutal. There were times when on one would even pick up the phone to talk about projects. My income dropped by 80 percent. Because of one bad year, I have no retirement savings and $15,000 in credit card debt."

"If the government counted independent workers, they could design more effective policies that support what the workforce needs to succeed," said a report written by the organization. For example, the group supports allowing independent workers to save for periods of unemployment in tax-advantaged savings accounts.

This group is hardly marginal. Littler Mendelson, an employment law firm, estimates that freelancers will account for half of all the new jobs as the economy recovers. Many freelancers are themselves employers, perhaps hiring another freelancer on a temporary basis.

"With reliable government figures, policymakers could no longer ignore independent workers, the strength they bring to our economy, and the challenges they face," the organization wrote a report published earlier this year. "An accurate count could mean that the ignored one-third of our workforce could have access to the same basic benefits, protections and supports that the other two-thirds already receive."  

Freelancers, consultants and temps: How has business been? Have you had problems getting paid? How did you cope? Please comment.

The Looking for Work series that usually appears in Jobbing on Mondays will move to Fridays, starting this week.