The U.S. Freelance Economy: What the Data Actually Shows

Freelancing is a substantial part of the U.S. labour market, but the numbers used to describe it can look surprisingly different.

One widely cited study estimated that 64 million Americans performed freelance work during 2023 and generated approximately $1.27 trillion in annual earnings. U.S. government data from the same year identified 11.9 million workers whose sole or main job was as an independent contractor.

At first glance, those figures seem difficult to reconcile. They make more sense once we look at what each dataset is actually measuring.

The Upwork survey uses a broad definition that captures people who performed freelance work at some point during the year, including people who may also have held traditional jobs. The Bureau of Labor Statistics looks much more narrowly at workers whose sole or main job falls into a specific employment arrangement.

Both tell us something useful. Neither should be presented as the definitive size of the entire U.S. freelance economy.

This report looks at what the available evidence says about the scale of freelancing in the United States, the economic value associated with it, the growth of skilled independent work and the limits of the numbers commonly used to describe the market.

Executive Summary

Upwork’s Freelance Forward 2023 study estimated that 64 million Americans performed freelance work during 2023, representing 38% of the U.S. workforce under the study’s definition. It estimated their annual earnings at approximately $1.27 trillion.

That is the source behind the widely repeated claim that U.S. freelancers power a roughly $1.3 trillion economy.

The figure is useful, but it is not an official GDP estimate. The research was commissioned by Upwork and conducted by Edelman Data & Intelligence among 3,000 U.S. working adults, including 1,142 people classified as freelancers.

Official data gives us another view. The U.S. Bureau of Labor Statistics found that 11.9 million people were independent contractors on their sole or main job in July 2023, equivalent to 7.4% of total employment. BLS explicitly includes independent consultants and freelance workers within that category.

The difference between 64 million and 11.9 million is therefore largely a difference in scope. One measure asks whether someone performed freelance work during the year. The other focuses on the person’s primary employment arrangement at a particular point in time.

The data also shows that professional freelancing is significant. Upwork estimated that 47% of freelancers in its survey provided knowledge services such as programming, marketing, IT and business consulting.

Official BLS data shows independent contracting is not generally an arrangement workers are trying to escape. In its July 2023 survey, 80.3% of independent contractors said they preferred their current work arrangement, while 8.3% said they would prefer a traditional arrangement.

Taken together, the evidence describes a large but heterogeneous market: full-time independent professionals, consultants, side-income freelancers, creators and people combining independent work with conventional employment.

Key Findings

The $1.27 Trillion Figure

The headline number is based on real research.

Upwork’s Freelance Forward 2023 report estimated that freelancers generated approximately $1.27 trillion in annual earnings in the United States during 2023.

The same study estimated 64 million Americans had performed freelance work during the year, or 38% of the U.S. workforce under its definition.

The survey was conducted by Edelman Data & Intelligence between October 24 and November 9, 2023. It covered 3,000 U.S. working adults aged 18 or older, including 1,142 freelancers and 1,858 non-freelancers. Upwork reports a margin of error of ±2.8% for the freelancer sample.

That methodology makes the estimate much more useful than an unsourced market-size claim.

It also tells us how the number should be described.

The $1.27 trillion figure is an estimated level of freelancer earnings based on an Upwork-commissioned survey. It should not be described as an official U.S. government estimate of freelance GDP or as proof that a separately measured $1.3 trillion industry exists inside the national accounts.

That distinction makes the report stronger, not weaker.

Why Counts Look Different

The number of freelancers in the United States depends heavily on the question being asked.

Upwork’s survey asks about freelance activity over the course of a year and uses a broad definition that can include people combining freelance work with another form of employment.

The Bureau of Labor Statistics measures something different.

In its July 2023 Contingent Worker Supplement, BLS identified 11.9 million people whose sole or main job was as an independent contractor, representing 7.4% of total U.S. employment.

BLS defines the group as independent contractors, independent consultants and freelance workers, regardless of whether they are technically self-employed or classified as wage-and-salary workers.

The difference between 11.9 million and 64 million does not mean one source must be wrong. A person with a full-time job who earns money from freelance design projects during the year can qualify under a broad freelancing survey while still appearing as a conventional employee when BLS asks about their main job.

Time period matters too. Upwork measures activity across a year. The BLS supplement describes employment arrangements at a particular point in July 2023.

Any serious report on U.S. freelancing should make that distinction before comparing headline numbers.

Freelancing Is Not One Category

The word freelancer is useful in everyday conversation but much less precise in labour statistics.

A self-employed management consultant may describe herself as a freelancer. So may a designer completing occasional projects after work. An independent software engineer operating through an LLC may call himself a consultant instead. A creator earning money from several platforms can sit somewhere else again.

The Internal Revenue Service uses broader legal and tax categories. Its definition of independent contractors generally focuses on whether a person is in an independent trade, business or profession and whether the client controls the result rather than how the work itself is performed.

The IRS also treats independent contractors as self-employed for tax purposes, while noting that whether someone is genuinely an independent contractor depends on the facts of the working relationship.

This is another reason freelancer counts should not be casually mixed with every measure of self-employment or gig work.

The categories overlap, but the populations are not identical.

Independent Work Is Significant

The narrower BLS measure is still substantial.

At 11.9 million people, independent contractors were by far the largest of the four alternative employment arrangements measured by BLS in July 2023. On-call workers numbered 2.8 million, temporary help agency workers 945,000 and workers provided by contract firms 862,000.

Independent contractors represented 7.4% of total employment on a sole or main job.

BLS also identified another 1.9 million multiple jobholders whose second job was as an independent contractor. That represented 22.8% of people holding more than one job.

These numbers help explain why broad annual estimates can become much larger than main-job estimates. Independent work often exists alongside another occupation rather than replacing it completely.

For some people it becomes the career. For others it remains a second source of income.

Knowledge Work Is a Major Share

The U.S. freelance economy is not made up only of short-term gigs and local services.

Upwork’s 2023 research estimated that 47% of freelancers, or roughly 30 million people under its broad definition, provided knowledge services. The study included areas such as computer programming, marketing, IT and business consulting within that category.

That matters for how companies think about independent talent.

A business may use freelance specialists not because it needs someone for a simple temporary task, but because it needs expertise that does not justify a permanent hire.

A startup may bring in an engineer for one phase of a product. A marketing team may need an SEO specialist for six months. A company may use an independent financial modeller, designer, researcher or consultant for work requiring expertise that is not needed every week of the year.

That is a very different market from the popular idea of the gig economy as mainly rides, deliveries and microtasks.

Both exist. They should not be treated as though they are the same labour model.

Workers Often Choose It

Independent work is sometimes discussed as though everyone doing it would prefer traditional employment if they had the option.

The BLS data does not support such a simple conclusion.

Among workers whose sole or main job was as an independent contractor in July 2023, 80.3% said they preferred their current work arrangement. Only 8.3% said they would prefer a traditional arrangement, with the remaining respondents expressing no clear preference.

That is one of the more useful official findings because it focuses on workers for whom independent contracting is their primary employment arrangement rather than occasional side activity.

Preference does not mean the model has no problems. Independent workers can still face irregular income, weaker access to employer benefits, late payments or periods without projects.

It does show that independence itself has value for a large majority of people in this specific BLS population.

Flexibility, control and autonomy should therefore be treated as real characteristics of the market rather than marketing language attached to it.

Age Changes the Picture

Independent contracting also looks different across age groups.

BLS found that 11.5% of employed workers aged 55 and older were independent contractors on their main job, compared with 6.9% among people aged 25 to 54 and 2.2% among workers aged 16 to 24.

Workers aged 55 and older represented 36% of independent contractors.

This is useful because freelance narratives often focus heavily on younger workers.

Younger professionals may be more visible on digital platforms and in surveys covering side work, but independent contracting is also a long-established route for experienced professionals, tradespeople and consultants.

For older workers, accumulated experience, client relationships and specialist knowledge can make independent work particularly viable.

The U.S. freelance market therefore cannot be explained purely as a generational move away from traditional jobs. Some of it is new platform-enabled work, and some of it is a much older model of independent professional practice.

Side Work Matters

Broad freelancer counts become much easier to understand once second jobs are included.

BLS found 8.4 million multiple jobholders in July 2023, with 1.9 million of them working as independent contractors in their second job.

That means a meaningful amount of independent work takes place alongside another primary job.

People may freelance to increase income, test a future business, use specialised skills outside their normal job or maintain several forms of work at the same time.

This is economically important even when freelancing is not someone’s main occupation.

It also creates a measurement problem. A survey asking whether someone freelanced during the year will count this activity. A dataset classifying the worker by their main employment arrangement may not.

Neither approach is inherently better. They answer different questions.

Nonemployer Businesses Add Context

Another useful dataset comes from the U.S. Census Bureau.

The Census Bureau’s Nonemployer Statistics track businesses with no paid employees that are subject to federal income tax and meet minimum receipt thresholds.

The latest available data is for 2023.

These businesses include many sole proprietors and independent professionals, but once again they should not simply be relabelled as freelancers. The dataset covers businesses across industries, including activities that have little to do with professional freelancing.

Its usefulness is different.

It shows the scale of economic activity taking place through businesses that operate without payroll employees, and it gives researchers another way to understand the much wider ecosystem around solo work.

The Census Bureau also warns that methodological changes introduced in the 2022 series affect comparisons with earlier years, another reminder that even official datasets need to be read with their definitions attached.

Freelancers Are Businesses Too

Once someone earns meaningful income independently, the work also has a business and tax side.

The IRS generally considers someone self-employed if they operate a trade or business as a sole proprietor or independent contractor, are a member of a partnership carrying on a business, or otherwise operate a business for themselves.

Its Self-Employed Individuals Tax Center explains that self-employed people generally file an annual return and may need to make estimated tax payments during the year.

Self-employment tax also covers Social Security and Medicare contributions that employees normally see divided between themselves and their employers.

This changes the economics of freelance income.

A $100,000 freelance revenue figure is not equivalent to a $100,000 employee salary. The freelancer may have business expenses, non-billable time, insurance costs and tax obligations that need to be funded from that revenue.

That is another reason the $1.27 trillion estimate should be described as earnings rather than assuming it represents disposable income or pure economic value flowing directly to individual freelancers.

Flexibility Has Real Value

The popularity of independent work cannot be explained only through earnings.

Upwork’s 2023 research found that freelancers frequently cited control over their schedules, location and careers as reasons for choosing the model.

The BLS preference data reinforces that finding from a different source and a much narrower population. Most people whose primary arrangement was independent contracting said they preferred it.

Together, the studies suggest that autonomy is an important part of the market.

That does not mean every form of independent work offers the same level of control. Someone running a consulting practice with several clients is in a different position from a worker whose income is heavily dependent on one platform.

The term “freelance economy” can hide those differences if it is used too broadly.

Income Can Be Less Predictable

Greater independence also means taking on risks that an employer normally absorbs.

Projects can end. Clients can reduce budgets. Payment can arrive late. A busy quarter can be followed by a quiet one.

These issues are particularly important for people who rely on freelancing as their primary income.

The BLS survey provides one useful piece of context around benefits. In July 2023, 74.2% of independent contractors had health insurance from some source, compared with 84.9% of workers in traditional arrangements.

BLS does not report employer-provided health insurance for independent contractors in the same way because most are self-employed, but the difference in overall coverage illustrates one of the practical areas independent workers need to manage themselves.

This is part of the wider balance inside freelancing: more autonomy can come with more responsibility for income continuity, insurance, retirement and other parts of working life.

Our separate report on freelancers and the inconsistent work challenge looks more closely at the instability side of that model.

AI Is Changing Skilled Freelancing

Independent professionals have also been relatively quick to adopt generative AI.

Upwork’s 2023 survey found that 20% of freelancers used generative AI multiple times per week, compared with 9% of non-freelance professionals in the same sample.

That does not tell us whether AI will increase or reduce the number of freelancers over time.

It does suggest independent workers are adapting their workflows quickly.

For knowledge workers, AI can reduce time spent on research, drafting, coding assistance, analysis and routine production. That may allow one freelancer to produce more work, but it can also reduce what clients are willing to pay for tasks that become easier to automate.

The likely effect is therefore not simply more or less freelancing. The mix of valuable freelance skills will continue to change.

Judgment, specialist expertise, client context and responsibility for outcomes become more important when basic production gets cheaper.

Companies Use Talent Differently

The growth of professional freelancing also reflects changes on the client side.

Businesses do not necessarily want every capability permanently on payroll.

A company may need cybersecurity expertise during an audit, additional engineers during a product launch, a specialist marketer while entering a new market or a designer during a rebrand.

Independent professionals allow companies to bring in that capability around the work itself.

This does not mean freelance talent is always cheaper, nor should it be treated primarily as a labour-cost reduction strategy. Experienced specialists can command high rates because the client is buying access to capability without committing to a permanent role.

That project-led model is also central to how we now think about Flexable. Instead of beginning with a large directory and asking clients to find the right person themselves, FLXB 2.0 starts with the project and works toward relevant talent around the actual requirement.

The wider U.S. labour data helps explain why this model matters. Independent professionals are already a meaningful part of how companies access skills.

Classification Still Matters

As independent work grows, the distinction between a genuine contractor and an employee becomes more important.

The IRS states in its guidance on independent contractors and employees that businesses need to determine worker status correctly rather than relying solely on what the relationship is called.

The central issue is the degree of control within the relationship.

Someone operating an independent business and controlling how they perform the work may genuinely be an independent contractor. A person treated like an employee in practice does not automatically become a contractor simply because a contract uses that label.

This matters for businesses as well as workers because classification affects tax withholding, Social Security and Medicare obligations, unemployment taxes and other responsibilities.

The expansion of independent work therefore creates both opportunities and compliance questions.

The $1.3T Headline Needs Context

The original version of this report used the idea of U.S. freelancers powering a $1.3 trillion economy.

The underlying figure is defensible if we describe it correctly.

Upwork estimated approximately $1.27 trillion in freelancer earnings during 2023. Rounded, that is roughly $1.3 trillion.

What we should not do is silently turn that estimate into an official measure of the total U.S. freelance economy.

Upwork’s definition is broader than the BLS measure of independent contracting. Its estimate comes from a survey commissioned by a company operating in the freelance market. That does not invalidate the research, but it is context the reader should know.

For comparison, the BLS counted 11.9 million people whose main employment arrangement was independent contracting during the same year, while the Census Bureau separately tracks millions of nonemployer businesses using an entirely different methodology.

The U.S. does not currently have one official statistic that captures every person and every dollar we might reasonably call freelancing.

The $1.27 trillion figure is one useful estimate inside that larger measurement problem.

What the Data Tells Us

Once the definitions are clear, the U.S. freelance market looks substantial under almost any reasonable measure.

Tens of millions of Americans perform some form of independent work when broad annual participation is included. Millions rely on independent contracting as their primary employment arrangement. Millions more combine independent work with another job.

Professional knowledge work represents a significant part of that market.

Workers who rely primarily on independent contracting overwhelmingly tell BLS that they prefer the arrangement, suggesting that freelancing is not merely a fallback form of employment.

At the same time, independent workers generally carry more responsibility for finding future work, managing tax obligations, maintaining insurance and absorbing variation in income.

The U.S. freelance economy is therefore neither a simple success story nor a labour-market problem waiting to be fixed.

It is a large and varied part of how Americans already work.

What Needs Better Data

There are still important questions that current datasets do not answer cleanly.

How many Americans depend on freelancing for more than half of their income? How much professional freelance work happens entirely outside major platforms? How does annual income vary between full-time independent professionals and people freelancing alongside employment? Which occupations are seeing the fastest movement toward independent work?

The existing sources each capture different pieces.

Upwork provides broad survey evidence about annual freelance participation. BLS provides a rigorous official measure of main-job employment arrangements. Census data captures businesses without paid employees. IRS data tells us how independent work is treated for tax purposes.

None of those datasets alone is the U.S. freelance economy.

Future research would be stronger if it connected those pieces more consistently rather than producing another single headline number.

Report Conclusion

The claim that U.S. freelancers contribute roughly $1.3 trillion to the economy has a real source, but it needs the methodology attached.

Upwork’s 2023 Freelance Forward study estimated that 64 million Americans performed freelance work during the year and generated approximately $1.27 trillion in earnings. The survey used a broad definition that includes people who may freelance alongside another job.

Official U.S. labour data gives a narrower picture. The Bureau of Labor Statistics counted 11.9 million independent contractors whose sole or main job used that arrangement in July 2023, representing 7.4% of total employment. Another 1.9 million multiple jobholders worked as independent contractors in their second jobs.

Those figures are not contradictory. They describe different parts of the same labour market.

The stronger conclusion is that independent work in the United States operates at several levels at once. It includes people building full-time freelance businesses, experienced consultants, professionals selling specialist knowledge, creators and workers earning independent income alongside traditional employment.

It is economically important, but its importance should not depend on stretching one survey estimate into something it was never designed to measure.

The evidence is already strong enough.

Freelancing is a meaningful part of the U.S. workforce, professional knowledge work represents a substantial share of it, and most workers whose primary arrangement is independent contracting say they prefer working that way.

The next step for the market is less about proving that freelancing exists at scale and more about improving how we measure it, how businesses use independent talent and how workers manage the additional responsibilities that come with working for themselves.

For the wider international picture, our report on the global rise of freelancing looks at how independent work is developing across different countries and labour markets.