"Where Are All the Self-Employed Workers?"

I've mentioned that I had pretty much quit reading the HBR, this sidebar of the most read articles is almost a caricature of why:

1. Develop Strategic Thinkers Throughout Your Organization
2. Limit the Time You Spend on Email
3. How to Write a Cover Letter
4. The First Strategic Question Every Business Must Ask
5. Your Weakness May Be Your Competitive Advantage
6. Make Yourself Sponsor-Worthy
7. How Netflix Reinvented HR

But then Mr. Fox came on as editorial director in 2009 and I got interested again
Justin Fox writing at the Harvard Business Review:

Along with a bunch of other, more headline-grabbing numbers, the Bureau of Labor Statistics reported this morning that 14.4 million Americans were self-employed in January. Of those, 9.2 million were unincorporated self-employed workers and another 5.2 million were incorporated.

That’s interesting, given that back in January 2000 (which is as far as the BLS tally of the incorporated self-employed goes), the number of self-employed was  … 14.4 million. Since then there have been some modest ups and downs, but overall no change. And as you can see in the chart below, the long-term trend in the percentage of workers who are self-employed actually appears to be downward:

But isn’t this the age of Free Agent Nation, as Dan Pink declared back in 1997? What about “The Rise of the Supertemp” that Jody Greenstone Miller and Matt Miller reported in HBR in 2012? Or “The Third Wave of Virtual Work” described by Tammy Johns and Linda Gratton last year in HBR, which has untethered knowledge workers from offices and made independent work more practical? It is as if, to paraphrase economist Robert Solow, you can see the age of self-employment everywhere except in the self-employment statistics.

Why is this? Two reasons, mainly. One has to do with definitions — the BLS standard for self-employment isn’t the only valid one. The second is really about history. We may well be witnessing the rise of a new kind of independent worker, but there have been different kinds of independent workers in the past. Far more of them as a percentage of the workforce, in fact, than we see today or are likely to see anytime soon.

Defining Independence
First, the definitions. The BLS gets its self-employment totals from the Current Population Survey, a.k.a. the household survey, a monthly quiz of 60,000 American households conducted by the Census Bureau (this is the same survey that generates the unemployment rate). Respondents are asked, “Last week were you employed by government, by a private company, a nonprofit organization, or were you self-employed?”

This either/or choice excludes a lot of people who are doing independent work on the side, or whose jobs are really more like gigs. A survey conducted for the past three years on behalf of MBO Partners, a provider of support services for independent workers, counts temp workers, on-call workers, and those on fixed-term contracts as “independent workers.” That gets the total to an estimated 17.7 million in 2013, up from 16 million two years before. “When you start throwing these other people in, that’s where the growth is,” says Steve King of Emergent Research, which designed the survey.

“The household survey is really good,” continues King. “I don’t think they’re missing people who are working; they’re just categorizing them using methods they developed in 1950. Changing that survey takes an act of God, because it messes up all the time series.”...MUCH MORE