The economy is shifting beneath the feet of workers, pushing a growing share of them into the role of independent contractor or consultant, temporary worker, freelancer and entrepreneur.
Fifty-something and unemployed, Mike McCarron decided that the best way forward was to work for himself.
A year ago he launched a business, Gamle Ode, that makes a clear Scandinavian liquor called aquavit. It’s a big change from his last job, managing Web design projects for a print company.
McCarron spent about a year perfecting the recipe. He has sold more than 2,000 bottles in Minnesota and Wisconsin, and he soon will sell bottles in Illinois. Even now, he still seems a little surprised by his new career path.
“It was kind of a bold choice,” said McCarron, who lives in Minneapolis. “Every once in a while, I’ll still have those moments where I’ll wonder if I’m crazy for doing it.”
Maybe he’s crazy, but like so many Americans, he had little choice but to go it alone.
The economy is shifting beneath the feet of workers, pushing a growing share of them into the role of independent contractor or consultant, temporary worker, freelancer and entrepreneur. More than 40 percent of American workers classified themselves as a “free agent” by the start of 2012, according to Kelly Services research, a huge jump from 2008, when 26 percent of workers gave themselves that label.
“The idea of being your own boss, that’s much more common nowadays,” said Hank Robison, chief economist at Economic Modeling Specialists Intl. “On one hand, it’s driven by necessity, and that’s the necessity of needing a supplementary income. The other thing is that it’s driven by possibility.”
The shift is clear in industries like software development and construction, but it extends to most types of service jobs. The economy shed 8.6 million jobs in the recession, and the available data show that a large part of the gap since has been filled by free agents.
The number of one-person firms in the country doing at least $1,000 in annual sales has been growing way faster than employment for at least a decade, according to the Census Bureau. When the recession hit, these small businesses recovered dramatically faster than the number of American jobs, rising by 1.7 million from 2006 to 2011.
In contrast, overall employment still is struggling to return to its prerecession level, as 3.9 million more people work part-time jobs than in 2006, according to the Bureau of Labor Statistics. Temporary and contract hiring has surged across the country and in Minnesota, where the number of jobs at staffing agencies has grown 14 times faster than employment overall.
Robots, computers and globalization still are erasing traditional full-time jobs as the economy recovers, reorganizes and demands more of workers.
“The baseline level of skills required is going up, and in some ways those skills are the same skills you would need to be an entrepreneur,” said Ryan Burke, director of jobs and workforce for Hope Street, a policy group focused on helping Americans navigate a changing economy. “Being motivated, being able to solve problems, being able to think critically, being able to work in teams.”
A slowly recovering economy, rising health insurance costs and the business world’s ongoing preparation for the federal health care law have led some companies to shelve hiring plans and use temporary workers and freelancers instead. But shifts in the job market and the type of education it requires, Burke said, “will be longer-term trends.”
‘Path to success’
Ethan Cherin, an economics and political science teacher at St. Paul Central High School, stays in touch with former students as they move into the workforce.
“It seems like a world now where, if you’ve got certain kinds of skills and certain kinds of aptitudes and a willingness to take chances, to be entrepreneurial, there’s a path to success,” he said. “But not everybody’s like that. I worry about what the world looks like for the vast majority of people who don’t have that extra something you need to make it in today’s economy.”
Eighty percent of large companies plan to substantially increase their use of contract and temporary workers, according to Intuit, a software firm that publishes reports on the small business economy.