NCPA - National Center for Policy Analysis

Free Agent Nation

July 12, 2011

There is a growing number of Americans who don't have a "regular job" but instead work on individual contracts with employers or customers.  These folks don't get the traditional W-2 paystub at the end of the year; they report their taxes with the IRS form 1099.  The 1099ers are a growing part of our economy, says Erik Pages, president of EntreWorks Consulting, an economic development consulting and policy development firm.  

  • Looking at U.S. Census Bureau figures on the self-employed, we find 21.4 million self-employed Americans in 2008.
  • There are many benefits to this status: more flexibility, more opportunities for unique and creative work, and more control over one's work circumstances.
  • And, 1099 status can be profitable.

The 1099 economy has emerged somewhat below the radar over the past decade.  Few economic development organizations have devoted much thought or research to the needs of this segment of the economy.  Pages sees several segments within the broad category of the 1099 economy: the reluctant 1099ers, the entrepreneurial 1099ers, and the "gig economy" work force.

  • The reluctant 1099ers includes those who operate in the 1099 economy because they have no choice, especially those sectors that have previously operated with traditional employment contracts, but have now shifted to the new structures.
  • The entrepreneurial 1099ers: Sole proprietorships and LLCs/LLPs may have numerous workers under contract, yet appear in government statistics as a self-employment venture.
  • The "gig economy" workforce refers to those who operate in industries that traditionally operate on a project or "gig" basis, such as filmmaking crews.

Regardless of how one classifies these workers, they remain largely invisible to policymakers and to economic and workforce developers.  That needs to change.  In addition to recognizing the importance of this part of the workforce, we also need to develop a more nuanced understanding of their concerns and needs, says Pages. 

Source: Erik Pages, "Living and Working in the 1099 Economy," New Geography, July 2, 2011.

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