Could the coronavirus lead to a long term increase in the number of people who do freelance work?

As the coronavirus pandemic continues to wreak havoc on the US economy, the number of unemployment claims is rapidly increasing.

Over 22 million Americans have filed for unemployment over the past four weeks as mass shutdowns across the country have led to layoffs across a number of industries.

Experts believe that the unemployment rate could hit 15% when the next employment report is released on May 8 and some fear that it could rise as high as 30% before the crisis is over, exceeding the 24.9% peak seen during the Great Depression.

The increasing job loss could lead to more people seeking out freelance work to make up for the loss of income.

Hayden Brown, the CEO and president of the global freelancing platform Upwork, believes that more people may seek out freelancing work due to the security of having more than one source of income.

“We have heard from many independent professionals, particularly in the last ten years since the 2009 recession, that they feel a heightened sense of security having multiple sources of income via various clients they serve,” said Brown.

According to Upwork, 57 million Americans freelanced in 2019, representing 35% of the US workforce and an increase of 4 million freelancers since 2014.

According to a 2019 study conducted by Upwork and the Freelancers Union, freelancing income amounts to US$1 trillion – nearly 5% of the GDP.

The study estimates that the majority of the US workforce will be doing freelance work by 2027. However, considering the effect the coronavirus pandemic has had on employees now migrating to working from home, this could take place even sooner.

“As large portions of the workforce suddenly find themselves unemployed, we are seeing even more seasoned professionals joining Upwork’s existing communities of highly skilled mobile developers, designers, writers, and more,” the Head of Talent Success at Upwork, Nancy Van Brunt, told The Millennial Source.

“With a tough recession likely on the horizon, we expect to see increasing numbers of laid-off workers seeking out the myriad of diverse, well-paying opportunities available on Upwork’s platform,” she added.

In the long run, Van Brunt said she expects the COVID-19 pandemic to “accelerate the trend of workers shifting to flexible contract arrangements” as more companies re-evaluate traditional hiring norms.

A spokesperson for the online freelancing marketplace Fiverr told The Millennial Source that it has seen freelancers from across the globe joining the platform and “creating new gigs in record numbers throughout the past months.”

“It is clear that people are turning to Fiverr to explore new income sources as they now have more time at home and as global unemployment increases,” the spokesperson said. “Because freelancers on the platform do digital work that is delivered online, the work can be done from home.”

Fiverr has particularly noticed that services relating to music and gaming have been trending, “as people are spending more time at home playing games and musicians who can’t play shows are having to find alternative ways to make music.”

Online lesson services are also trending, as people now have more time to learn new skills, while websites and video-related services are trending as businesses are considering how to grow their online presence.

“These trends reflect changes in how businesses and consumers are adapting and make the most of the current environment,” the Fiverr spokesperson said.

The effect COVID-19 is having on freelance workers

While an increase is expected in new freelance and gig workers, unemployment has also been increasing for other independent contractors, such as Uber and Lyft drivers, food delivery workers and construction workers.

The US$2.2 trillion stimulus package passed in Congress last month was largely supposed to help the unemployed, especially after being expanded to include the self-employed, freelance, gig workers and independent contractors, who usually would not be considered eligible for unemployment benefits.

Newly passed unemployment benefits also include a $600 a week payment on top of the benefits people would normally receive by collecting unemployment in their respective states.

However, many who have attempted to file for unemployment have been met with delays, as state unemployment offices have been overwhelmed by the huge increase in the number of claims.

Not only have unemployment offices been overwhelmed, they have also been struggling to set up new systems to calculate how much those who have filed claims are owed in unemployment insurance under new rules laid out by Congress.

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