How big is the freelance economy? Depends whom you ask

Two groups are out with surveys this week taking stabs at answering a question bugging economists and journalists in recent years: How many people are now members of the “1099 workforce”?

But as with other reports on the subject so far, the new ones leave more questions than answers—partly because the term “freelance economy” is ill-defined. But even when there is agreement on what it means, discrepancies emerge.

The first, from MBO Partners, which sells products and services to the self-employed, estimates there are about 30 million freelancers, including workers who have a variety of short-term employment situations. That would represent about 19% of the U.S. workforce.

The second, from the Freelancers Union and Upwork, a site where freelancers can look for jobs, says there are 54 million freelancers. That would represent about 34% of the U.S. workforce.

The wide difference is striking because the two studies defined freelancers fairly similarly, with jobs ranging from full-time freelancers to independent contractors to those who have office jobs and freelance on the side.

One explanation may be that MBO surveyed just 2,000 individuals, while Freelancers Union and Upwork surveyed more than 7,100. MBO’s study was also self reported, while Union/Upwork’s involved a more rigorous screening process.

In a statement to me, a rep for Emergent Research, which worked with MBO on their survey, said that while the Union/Upwork study includes anyone who has earned any money in any way during the prior year from a non-traditional full or part-time job, the MBO study includes anyone who regularly, in an average workweek, earns money in anyway from a non-traditional full or part-time job.

The Bureau of Labor Statistics, which has the widest and most authoritative surveys of the U.S. workforce, has defined freelancing as “contingent and alternative work arrangements.” In its most recent survey on the topic, which looked at 60,000 workers, the bureau said about 31% of working population was freelancing

But that was as of 2005 — the datapoint is so horribly outdated because Congress cut funding for research on the topic, according to the Wall Street Journal.

Bloomberg columnist Justin Fox has tried to address this question, and found few signs of recent gig economy growth. In August, he examined data from the Government Accounting Office that suggested 40% of U.S. workers are now freelancing. He found this calculation wanting.

The 40.4 percent number is from 2010 and isn’t comparable to the [BLS’] 30.6 percent number, which is from 2005. They came from different surveys that asked different questions, and the newer survey was smaller and less reliable.

Second, he said, BLS data on rates of workers who identify as self-employed (which the agency still tracks) has shown little growth in recent years.

But even Fox seems to agree that 30% to 40% of American workers now “labor in something other than conventional full-time jobs.”

I asked Harvard University professor Larry Katz, who is now studying this topic with former White House economic adviser Alan Krueger, whether the size of the freelance workforce is growing, shrinking or staying about the same. He said it appears to be growing, but that we also need to settle on a better definition of what “freelance” means.

Their preliminary results show that the share of employed adults filing 1099 forms for independent contracting work increased in the 2000s “even as standard measures of self-employment declined.” The share of individuals filing Schedule-C tax forms to report profits and losses from their homegrown businesses has also increased “substantially” in recent years, he said.

“These discrepancies suggest a growth of ‘gig’ and ‘share’ economy workers who receive 1099 income, file Schedule C forms on their taxes, but don’t answer the standard [government] question as indicating they are self-employed and don’t say they are a multiple job holder,” Katz said.

In a study commissioned by Uber, Krueger showed there are now as many Uber drivers in the U.S. as there are computer manufacturers.

For now Katz and Krueger are likely our best hope for understanding the freelance economy better, unless the BLS gets an infusion of funds to restart their survey.

Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.