Down with the corporation!

A revolution in how Americans work will continue over the next two years. Millions of workers are happily leaving corporations and becoming self-employed, a new report says.

“Climbing the corporate ladder is no longer the American dream. Over the last years a significant mindset shift has taken place and with it has emerged a workforce which values flexibility over stability, “according to FreshBooks’ Second Annual Self-Employment report.

FreshBooks offers accounting and invoicing software services. Its services are designed for self-employed professionals, thousands of whom it surveyed along with thousands of workers who retain traditional jobs.

Who Are These New Workers?

The report defines self-employed professionals as those whose primary income is from independent client-based work.

These non-traditional workers want more control over how and why they work. Most won’t return to an organization, the report said. It predicted that the self-employment movement will explode over the next two years.

Millions Going Out the Door

Some 27 million Americans will leave full-time jobs from now through 2020, bringing the total numbers of self-employed to 42 million, FreshBooks officials said. Ironically, I first wrote about the Fresh Books report in the New York Post Sunday business section, a part of the newspaper that is primarily staffed by freelancers or full-time workers who are moonlighting.

Why the stampede to self-employment?

“We hear from customers and workers in general that they like the freedom to choose their own clients and choose the work they are doing,” said Carly Moulton, a co-author of the report. She added that “97 percent of them said they don’t want to return to traditional work.”

A few years ago, added Dave Cosgrave, another study co-author, most people expected to work for a corporation for a long time.

“Now so many people are looking into the future and seeing a strong possibility of self-employment,” Cosgrave says. For the new generation, he said, it could be a signal change in how one earns a living. He added many young people today don’t ever expect to work for others.

A Second Report

The report confirms the findings of another in 2016 that found “a significant rise in the incidence of alternative work arrangements in the U.S. economy from 2005 to 2015.”

Non-traditional workers in America rose “from 10.1 percent in February 2005 to 15.8 percent in late 2015,” according to the study, “The Rise and Nature in Alternative Work Arrangements in the United States, 1995-2015” by Lawrence F. Katz and Alan B. Krueger.

Katz and Krueger, two academics, say independents are becoming more important.

“A striking implication of these estimates is that all of the net employment growth in the U.S. economy from 2005-2015 appears to have occurred in alternative worker arrangements,” they wrote.

Katz and Krueger also found that alternative work “is more common among older workers and more highly educated workers, and the work force has become older and more educated over time.”

More Than Just the Workplace Changes

The transformation from working for someone else to working for yourself will lead to massive changes in American society, FreshBooks concluded.

“Everything from how lawmakers approach policy to how employers hire and retain talent will be impacted,” the report said.

For instance, many self-employed said they don’t trust the federal government to protect their interests, the report said. About a quarter of those questioned by Fresh Books said they might change political parties to protect small businesses.

The movement toward a non-traditional workplace will also affect retirement.

“Nearly 60 percent of the self-employed professionals aged 50-65 want to continue work instead of retiring. Though decades away, 62 percent of self-employed millennials have no expectations of retirement,” FreshBooks said.

More than a GIG

The report also said this movement to full-time self-employment is not about GIG workers, people who use online platforms to find temporary work, but comprise less than one percent of U.S. workers.

The self-employment movement, the report said is “a much more profound shift” than the GIG economy.

Indeed, an official with employment agency Robert Half, agreed the number of the self-employed will rise. But he warned that it will not necessarily be all beer and skittles.

Not All Wonderful

“Working for yourself can be very stressful,” says Rich Deosingh, Robert Half regional vice president. “Not only are you responsible for doing the work, but you are tasked with procuring more work and marketing yourself.”

Gregory Bresiger
Gregory Bresiger

Gregory Bresiger is an independent financial journalist from Queens, New York. His articles have appeared in publications such as Financial Planner Magazine and The New York Post. The eBook version of his latest book "MoneySense" is available now for Free Download by clicking HERE

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