When Brooke Dixon move to New York and began looking for work a few years back, the Web developer turned to freelancing to earn a living and found himself in demand. But he quickly discovered that there was a downside: getting paid on time -- or at all.
Dixon (pictured above) says he was hired to build a new website for a well-known multimedia company, which he prefers not to name because he was working for a subcontractor. After four months of nonstop work, which he valued at about $50,000, he was paid just $15,000, he says. ("I was so frustrated by it.") On another project, the Long Island resident says that he was paid just $10,000 of an expected $30,000 after the startup that hired him ran out of money.
"It's sadly widespread," says Dixon of freelancers not getting paid. The problem has become so acute that Freelancers Union, an advocate for independent contractors in numerous fields, has created a website -- The World's Longest Invoice -- that lists the amounts that some freelancers claim that they've been stiffed. The accuracy of their claims isn't verifiable, but since its inception last year the total has reached $16 million. Freelancers Union has also pushed for legislation that would give freelancers a more viable recourse than going to court -- should those who hire them fail to pay.
More Americans are turning to freelancing to make a living, whether voluntarily or simply because they've been unable to find a full-time job. Though the economy continues to create jobs, it isn't creating enough of them to make a substantial dent in the number of jobless workers: Fresh data from the Labor Department on Friday showed employers added 155,000 jobs in December and the nation's unemployment rate remained steady at 7.8 percent.
It isn't known exactly how many Americans work as freelance contractors. The Bureau of Labor Statistics, citing a lack of funding, stopped counting "contingent workers" six years ago. In its last report in 2005, the agency estimated that about 4 percent of the nation's workforce considered their jobs temporary.
But as Sara Horowitz, founder and executive director of Freelancers Union, noted in a 2011 blog post, the method that the government used to count freelance workers wasn't comprehensive.
The BLS didn't include those who are self-employed, temps, contract workers or work part-time -- job paths that, especially in the aftermath of the Great Recession, many workers have come to rely upon. Horowitz is pushing the government to reinstate the count using the broader definition of "independent worker."
By that definition, BusinessWeek reports, independent workers constitute at least 30 percent of the workforce, based on a 2006 report from the Government Accountability Office, which included the following categories:
- Self-employed workers
- Contract workers
- Day laborers
- On-call workers
- Part-time workers
Though the BLS hasn't counted the number of contingent workers in nearly eight years, it says that any American who is working shows up in the Labor Department's monthly employment report. The agency conducts two separate surveys each month -- one of households and another of businesses -- that count all workers.
Dixon's difficulty in getting paid while freelancing, and in controlling the type and nature of the work, inspired him to start his own online business two years ago. Known as Hourly.com, the site is designed to connect freelance workers with employers looking to hire them -- and vice versa -- for free, though it does charge for "premium services" that allow jobs to be filled more quickly.
It also led him, he says, to build the entire site himself. "We don't want to be in the position," he points out, "where we owe people money we can't pay."
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