It is the dream of nearly every American to own and manage their own business. The financial rewards can be limitless for those willing to put in the work. Many people are also not satisfied with the direction that their careers are heading or are having a hard time finding work and the answer for many of those people is to go into business for themselves. Self-employment is on the rise, and has been for some time.
Because of the internet?
The Internet has largely been behind this rise. In a way it has become the great equalizer. Having a presence on the web is something available to all, not just the Fortune 500 and having technical skills open up numerous avenues. Some call it a new economic model, some just see it as a natural progression of the economy, some call the future. It even has a name: the 1099 economy. The number of workers that make up this part of the labor force could be nearly one third of the workforce.
Nearly every industry could use the 1099 economy to its benefit. Call them what you want, freelancers, temps, contract employees, independent contractors, etc. These workers offer the ability for a company to develop a project like a website or an app and when the job is completed they can move on to their next projects. There is no more need to keep someone on the payroll and try to find other projects for them to be a part of or lay them off. This is particularly a boon for small companies or businesses that do not have a lot of overhead to supply the benefits that come with being a full time employee..
Prompted by the recession
With the worldwide economic recession in 2008 many companies turned to freelancers or temps to do work. Since these employees are not permanent, they would be given a 1099 form to file with the IRS at year’s end. Since the economic crash this new 1099 culture has been on the rise and has been growing steadily. Companies like Uber, Lyft and Airbnb have cashed in on this culture and have built a multi-billion dollar industry out the belief that you can and should be your own CEO. These 1099 workers can work the hours that they want to work, take a vacation or a day off when they want to and work on what projects they want to work on. For some, this is the ideal situation for them.
This is not for everyone. The cost of health insurance can skyrocket being self-employed. The taxes that need to be paid like Medicare and Social Security are not deducted each pay period and can lead to sticker shock when you see your tax return. Saving money for an IRA or other retirement accounts can be difficult. There are numerous other challenges but all can be overcome.
The 1099 culture is on the rise in some of the more obvious places like New York, Los Angeles and the Silicon Valley but it is also helping to spur other markets like Phoenix and Houston. It exists in nearly every city in the United States, even here in York. It is the opportunity to be your own CEO and live the American dream.
Resources:
https://www.forbes.com/sites/joelkotkin/2012/07/25/the-rise-of-the-1099-economy-more-americans-are-becoming-their-own-bosses/#748bbfc3343a
http://www.salon.com/2015/12/29/the_sharing_economy_partner/
https://medium.com/business-startup-development-and-more/building-a-culture-for-1099-workers-26f8c4e48fd3
https://newrepublic.com/article/132407/voters-angry-its-1099-economy-stupid
https://www.linkedin.com/pulse/building-culture-1099-workers-vivian-xue