MBO Partners’ 10th annual ‘State of Independence in America’ report about independent workers gives COVID-era snapshot

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MBO Partners — which describes itself as “a deep jobs platform that connects and enables independent professionals and microbusiness owners to do business safely and effectively with enterprise organizations'' — has announced the release of its 2020 “State of Independence in America” report.

The report provides a snapshot of the characteristics and trends associated with independent work in the US, based on survey data collected in August of this year. According to the report, the survey resulted in responses from 3,687 residents of the US (aged 18 and older), including 1,023 independent workers, and the survey results were weighted to reflect the demographics of the US.

While MBO’s own business focuses on high-skilled, professional independents and micro businesses, the State of Independence report is largely focused on the broad independent workforce. The report defines this population as “the 38.2 million adult Americans of all ages, skills and income levels — consultants, freelancers, contractors, solopreneurs, microbusiness owners, temporary or on-call workers — who regularly work independently to build businesses, develop their careers, pursue passions, and/or supplement their incomes.” In effect, that means the full spectrum from, for example, gig drivers to small (solo or few person) advisory businesses.

In 2020, COVID-19 obviously impacted independent workers and microbusinesses, causing the number of working independents to fall 7% from 2019 to 2020, to 38.2 million in 2020 from 41.1 million in 2019 (a decline of 2.9 million). The study also found that “the number of full and part-time independents whose primary customers are consumers fell from 15.9 million in 2019 to 10.5 million in 2020, a 34% decline,” equivalent to 5.4 million independents.

Accordingly, not all categories of independents were impacted in the same way, and the report covers variations of impacts related to income, gender, etc. For example, higher earning independents seemed to be less negatively impacted than lower earning ones. And women seemed to be more negatively impacted than their male counterparts.

The study also covered a broad range of other dimensions/trends, such as age/generation breakdowns, remote work, use of online marketplaces, etc. The report also synthesized and explained five broad long-term forces driving independent workforce growth:

  1. Technology continues to enable and empower independent workers while also making it easier to start and operate an independent business.
  2. Using independent workers improves business flexibility and agility for employers.
  3. Workers increasingly want the autonomy, control and flexibility independent work provides — especially true for: (1) highly skilled professionals; (2) aging Baby Boomers; and (3) Millennials and Gen Z-ers.
  4. The need for many workers to generate supplemental income continues to grow because of stagnant wages, fewer middle-wage jobs and increasing costs, especially for housing, health care, education, childcare, and retirement.
  5. A growing support infrastructure of products, services and programs makes it easier, cheaper, and less risky to become independent.

Overall, the “State of Independence in America” report has traced the various trends within the independent workforce for over 10 years now. That includes the clear increase in the population at a higher CAGR than that of the total labor force — a rate that will accelerate over the next five years, according to BLS projections.

But it is also a complex population that harbors different trends and attitudes depending how you carve out the population segments. For example, according to the report, “the number of skilled independents has risen in each of the past 10 years, from 4.5 million in 2011 to 7.7 million 2020, a 71% increase.” Also, the number of “side-gig” or “side hustle” workers (those doing part-time/occasional work usually for supplemental income) rose 5% in 2020 (from 15 million to 15.8 million) and 51% from 10.5 million in 2016.

The State of Independence report provides a broad range of different insights into this complex population, and it should help readers come away with the complexity and trends in this important labor population. It will also provide a baseline for seeing where things are a year from now, when hopefully the specter of the COVID-19 crisis will be largely behind us.

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