Are freelancers better off or worse off in this economy? Some may think the current economic downturn has forced companies to hire independent contractors to replace some of their laid off workers, but according to The New York Times Magazine article by Emily Bazelon, "The Self-Employed Depression" [June 7, 2009], freelance workers are worse off, too.
Self-Employed Consultants– Independent Contractors – Freelancer
According to the New York Times Magazine article, the federal Bureau of Labor Statistics states the number of self-employed who work as independent contractors (those who are self-employed but aren't owners of a small business like a retail shop) had increased dramatically between 1995 and 2005 and has grown even larger in the last few years. This group of workers includes consultants, personal chefs and trainers, artists, writers, actors, tutors, software and web developers among others.
Unemployment of the Self-Employed
What makes this economic downturn even more difficult for freelancers, is the lack of a safety net. Independent contractors do not have access to state unemployment insurance compensation. When they're contracts end or those who have contracted them terminate their contract, there is no compensation to keep them afloat until another contract is signed.
Independent contractors or freelancers, in general, are also paying high rates for health insurance, or are not insured at all, and have no company-sponsored retirement plan. During these uncertain times, those who are age-qualified for social security might want to consider starting social security benefits to supplement income.
Freelancers Union Affordable Health Insurance
An organization that formed to address these difficult financial issues is the Freelancers Union. According to their website, they are "a nonprofit organization that represents the needs of America’s independent workforce though advocacy, information, and service." A 501(c)4 that grew out of the Working Today organization, Freelancers Union evolved from the Portable Benefits Network for New York City workers to the current advocacy arm that has members nationwide.
The Freelancers Union is organized to negotiate more reasonable group rates for health insurance, dental insurance, as well as life and disability insurance. According to their website, they have partnered with Charles Schwab Trust Company and Milliman to offer a Freelancers Union 401(k) retirement plan, and are advocating and lobbying for unemployment compensation reform.
Benefits of Freelancers Union Membership
Membership for the Freelancers Union is free, but there are fees for enrollment in group insurance programs. The Union provides networking opportunities, seminars and workshops. Having been founded and headquartered in New York City, the opportunities and membership seem to be most heavily in NYC, but they have 100,000 members nationwide.
Benefits of membership include:
- Access to affordable health & dental insurance
- Term life and disability insurance
- Professional networking, seminars & workshops
- Exchange services with other freelancers
- "Gigs" board to search for new clients & opportunities
- Listing in the Member Directory
- Discounts from Staples, Zipcar, YMCA, Duane Reade and more
Self-Employed Getting Through Economic Downturn
For freelancers, this deep recession can be devastating. Not protected by the safety nets of unemployment insurance, the self-employed security can tumble as the recession continues. With the support of the Freelancers Union, the self-employed freelancer and independent contractor can benefit from this grassroots network of peers who advocate for those who have chosen to go it alone.
Barbara Shema - Barbara Shema is a freelance writer and artist from the USA currently living in Europe to teach English as a foreign language.
