Commentary

Independent Contractors Are Growing

Newgeography.com has a series of very interesting articles on the growth of independent contractors-the “1099” workers (those filing miscellaneous income for non-traditional (re: W-2) work). Nearly one-fourth of all workers are now in the “noncovered” or workforce, up from 19% in 2001 according to the economic modeling firm EMSI. States with more than a quarter of their workforce filing 1099s include: Montana (29.4%), Idaho (28.3%), Vermont, Oklahoma, Colorado, South Dakota, Utah, Wyoming, Tennessee, Maine, Texas, Oregon and California. Yet, every state in the US has experienced growth in these workers since 2006, with some potentially important implications for entrepreneurship.

1099 workers aren’t tied to specific companies, so they typically work on contract and with multiple clients. Their employment is inherently entrpreneurial, suggesting the labor market is becoming more dynamic.

  • A discussion of the implications for the economy by Erik Pages (July 2, 2011) can be found here;
  • A statistical break-down of 1099 workers by EMSI can be found here.
  • And a quick take by Joshua Wright (Aug. 16, 2011) on the states with the fastest growing number of 1099 workers can be found here.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.