It may seem that the gig economy is dominated by millennials, but that may be only partly true. Perhaps their desire for independence and the necessity to make ends meet and pay down student debt necessitated their move toward project work. But increasingly, older adults over age 55 are easing into retirement by taking on short-term gigs and freelancing.
The Economic Policy Institute analyzed data from the Bureau of Labor Statistics, comparing statistics for independent contractors and freelancers for 2005 and 2017. Older workers over age 55 accounted for 37 percent of all independent contractors in 2017. For those in the 55-64 age group, 22.97 percent were independent contractors, up from 18.8 percent in 2005. For those over age 65, the numbers were similar. The share was 14.1 percent in 2017, up from 8.5 percent in 2005.
Over the same period, the number of total workers employed as freelancers and independent contractors fell slightly – 10.9 percent in 2005 versus 10.1 percent in 2017. So while the pool of independent workers got smaller, the over 55 workers made up a larger percentage of it. And the folks at EPI expect this trend to continue.
So why are older workers gravitating toward freelancing? According to a recent Forbes article, there are several reasons.
1. The barriers to entry is fairly low. That makes it easier to enter the gig economy. Digital platforms like Freelancers Union, Upwork and Flexjobs have made it easy for anyone to tout their skills compared to traditional word-of-mouth methods. All they have to do is complete their profile, talk up their skills then wait to be connected.
However, as simple as all this sounds, there is no guarantee that there will be a suitable connection between the older worker and an opportunity. It’s a passive approach and there’s a lot of competition. It’s easy for their profile and resume to get lost in the pile of applicants.
2. There’s no apparent cap on what they can earn. As a freelancer, older workers can negotiate their rate more readily than if they were hired. This arrangement can appeal to older workers who may be frustrated by age discrimination that they might have faced in the job market.
3. Older workers’ expertise is more valued as freelancer. When companies hire freelancers, they search for the most qualified candidate. They WANT someone that has experience. They don’t want to train a new person or risk possible mistakes. Experience counts, which is why freelancing may appeal to older workers.
4. Attitudes about “idle capacity” are changing. Older workers don’t want to spend their later years doing nothing but gazing out their window and the world rushes by. They want to participate. They want to be productive members of society and do meaningful work. That’s why many older workers are staying in the workforce longer, and why many of them gravitate toward gig jobs and freelancing.
5. Older workers want to remain connected to the outside world. Without a part-time job or a freelance gig, many older workers would feel isolated. By working, they are more engaged with the world. They join groups and form friendships, which give their lives meaning.
If in doubt about the impact of older workers, consider this statistic by the Bureau of Labor Statistics. By the year 2020 (next year), one-fourth of the U.S. workforce will be over the age of 55.
Older workers are not going away any time soon. They want to work. They want to share their knowledge and expertise. They want to remain relevant and provide meaningful service in our communities. Many of them are choosing contract work and freelancing as a way to do just that.