Earlier today I was talking with Donald Grimes, an economist at the University of Michigan, and we got to playing around with some data from the Bureau of Economic Analysis. He was making the argument that a lot of the things in the stimulus bill meant to help people whose livelihoods are threatened—things like extending unemployment benefits and COBRA healthcare coverage—do nothing for the self-employed people out there whose incomes are getting obliterated, too. Think about all those real estate agents. Or even people like independent hairdressers. If all of your clients start getting their hair cut once every five weeks instead of once every four, there goes 20% of your income. This is a bigger problem than it might otherwise be considering the shift over the past 15 or so years towards a Freelance Economy—our increasing tendency to work as consultants, free agents, project employees and other variations of pay-as-you-go help.
I’m not the slickest person in the world when it comes to making charts in Excel, but here’s one I managed. It shows the percentage of personal income that comes from self-employment. You can see how people went out and found their own work in the 1930s during the Great Depression, and then how that seriously slowed down in the 1950s and 60s with the rise of the Great Corporation. You can see the Freelance Economy take off in the 1990s—and the beginnings of another pullback.
In a way, it kind of looks like a ski slope.
From my desk in New York,