Dive Brief:

• Skilled workers are driving both growth and pay increases in the independent labor force, according to a report from Upwork and Freelancers Union.
• Based on a survey of 6,000 U.S. workers over age 18, the sixth annual Freelancing in America 2019 report showed that freelancing is becoming more of a long-term career choice. "For the first time, as many freelancers said they view this way of working as a long-term career choice as they do a temporary way to make money," the groups said in a press release. The number of workers who work as independent contractors full time has increased from 17% in 2014 to 28%.
• Additionally, freelancers are most likely to be skilled professionals working in programming, marketing, IT and business consulting. This means that while the median hourly rate for American workers is $18.80 per hour, freelancers have a median rate of $20. And those performing skilled services have a median rate of $28, the organizations said.

Dive Insight:

In announcing the report's findings, Upwork's chief economist, Adam Ozimek, said the results show improved confidence in a strengthening labor market. As conditions improve, "we will increasingly see people work on the terms that they prefer," he said in a statement.

An MBO Partners study released in June offered a similar take: It showed that that more than half of full-time freelancers polled feel more financially secure than they did as permanent full-time employees. 

Employer demand may be at play, too. While the labor market may be strengthening by some counts, employers also are seeking to remain agile ahead of a predicted recession. The Business Talent Group's (BTG) 2019 Skills Index showed that areas were once reserved for in-house staff increasingly are being outsourced.

Some workers are on board with the change, as Upwork noted. In fact, a 2017 ManpowerGroup poll found that an overwhelming number of respondents were open to nontraditional forms of work. Some workers, of course, will prefer the stability and benefits that are more often found with employee status, but others will prize flexibility. Employers should remember, however, that worker preference cannot factor into employee classification when it comes to compliance with federal laws.