Freelancers drive $1.5Tn shift in workforce: Upwork
NEW JERSEY, UNITED STATES — Amid widespread layoffs and economic uncertainty, more American workers are turning away from traditional nine-to-five jobs in favor of freelancing, a move that collectively earned them $1.5 trillion last year.
According to new research, two in three laid-off workers report greater happiness after building freelancing careers, while one in five employees have started freelancing or launched their own business to escape favoritism and instability in traditional workplaces.
The Upwork Research Institute’s survey of 3,000 skilled knowledge workers highlights a significant transformation in the labor market.
Freelancers outperform traditional employees
The Upwork study finds that 28% of skilled knowledge workers now operate as freelancers or independent professionals, with many out-earning their full-time counterparts.
The median income for full-time freelancers reached $85,000 last year, surpassing the $80,000 median for traditional employees. Those who freelance alongside a full-time job earned an additional $40,000 on average.
Freelancers are also leading in continuous learning and AI adoption. Over half (54%) report advanced proficiency with AI, compared to just 38% of full-time employees.
Nearly a third have experience building or training machine learning models, positioning them at the forefront of emerging fields like AI, software development, and sustainability.
Gen Z is accelerating this trend, with 53% of skilled Gen Z workers already freelancing. The movement is also strong among the highly educated-37% of skilled freelancers who hold postgraduate degrees.
Flexibility and control draw workers in
The top reasons for choosing freelancing remain consistent: flexibility, autonomy, and the ability to pursue meaningful work.
However, a recent study by Frontegg found that 35% of freelancers have missed time-sensitive contracts due to login failures, costing them an average of $1,018 and nearly a full workday regaining access.
Despite these setbacks, the freedom and earning potential of freelancing continue to attract a growing share of the American workforce.
