Fiverr’s Fourth Annual Freelance Economic Impact Report

Online freelance platform Fiverr partnered with Rockbridge Associates for a fourth year to analyze over tax returns from annually compiled Non-Employer U.S. Census Bureau statistics to explore the size, growth and skills of freelance workers across the 30 largest metropolitan cities for independent knowledge-based work.  These workers include anyone who receives a 1099 at the end of the year for work that requires specific skill, knowledge and expertise. The data in the report aggregates over 20 million tax returns for non-employer entities with at least $1,000 in annual receipts.

The study uses the latest Census data available, which was from 2018. They also conducted interviews with over 850 workers in 2020, along with hundreds of Fiverr sellers (freelancers) in the U.S.

Fiverr had a front row seat in the move to freelancing during the last 12 months.  The online marketplace for independent professionals experienced record growth in 2020 as skilled independent workers flocked to its platform to stay competitive in the uncertain economic environment brought on by the 2020 pandemic.

This study specifically focuses on a workforce referred to as “skilled independent workers.” This group consists of individual business entities that earn income outside of traditional employment, do not employ others, and are in the following industries:

  • creative services (e.g., artists, video producers),
  • skilled technical services (e.g., architecture, computers)
  • skilled professional services (e.g., legal, accounting, marketing).

Professional service providers make up 50.1% of the skilled workers, with technical workers at 28.8% and creative workers at 21.1%.

Full disclosure: I’m especially interested in the study because I have been counted within it as a freelance writer.  Here are some of the key findings.

Skilled independent workers are estimated to have earned $234 billion in revenue in 2020, up from nearly $229 billion in 2018, the latest year for which data are available. This revenue comprises around 1.1 percent of U.S. GDP. In 2020 an estimated $154 billion, or about two thirds, can be attributed to skilled independents in the top 30 markets in the U.S.

Here are the largest metropolitan areas based on the population of freelance workers.

Every recent freelance study confirms that independent workers are highly satisfied with their careers. But over the past year, the Fiverr survey found that  the skilled workers have not just been happy, but also busy offering new services, expanding their marketing, taking on more education and training, and using new resources to find clients in order to adapt to their changing industries brought on by the COVID-19 pandemic. They feel “hopeful,” “productive,” and “confident” about their work in light of the pandemic. More than six in ten skilled independents believe their industry wasn’t impacted or has more opportunities because of the pandemic.

Across the U.S., skilled freelancers earn $38,200 a year from this work on average, which translates into an hourly wage of $26 per hour. Revenues vary based on the type of work: those in technical services earn roughly $51,000 a year on average, skilled independents providing professional services earn $36,000 a year, and those in creative services earn about $25,200 a year from their activities. Six in ten skilled independents say their revenue was the same or greater in 2020 as in 2019 before the pandemic, and eight in ten skilled independents expect to make the same or more in 2021 compared to 2020.

It’s not surprising that these workers are very attractive as local residents. They are educated and have steady work and an optimistic attitude., Cities have started competing to try to entice them to smaller, warmer, or more rural towns with attractive (and lower cost) lifestyles.

Six percent of freelancers moved in the past year and 22 percent are planning to move in the next year, so municipal leaders are interested in what factors motivate them to pull up stakes.  The Fiverr research shows that skilled independent workers believe high-speed internet and friendly people make a community good for their vocation. Low costs of living, low costs of maintaining a business and being near clients also make a community attractive.

Small towns take note: Of those planning to move to a new metro area (outer or inner suburb or within the city), about a third (32%) will move somewhere smaller than where they currently live.

As a whole, skilled freelancers weathered the pandemic crisis better than their traditionally-employed counterparts, and they are more hopeful about the future. It’s why I recommend gig work to everyone who’s concerned about their own future.

Read the full study here.

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