John Preussner gets paid more as an independent information-technology consultant than he did working at a full-time job.
He has a flexible schedule and gets to meet new people all the time. There’s never a dull moment, he said, and that’s the problem.
“It’s sporadic. I’m always job hunting. There are a lot of people competing for those positions,” said Preussner, 55, of Schaumburg, who added he’d rather be on a payroll.
For Preussner and others who’ve turned to self-employment, the so-called jobless recovery feels more like one big non-stop hustle.
Because businesses burned in the recession remain reluctant to add employees, work-for-hire arrangements have grown in popularity for everyone from Web page designers and graphic artists to recruiters and carpenters.
Statistics show self-employment surged 7 percent since the recession ended in November 2001 through December, to 9.5 million workers. But these people don’t show up in another key statistic.
When the Labor Department releases its unemployment report every month–the January one is scheduled to come out Friday–it is scrutinized to see how many jobs were created. But that figure is drawn from the payroll report, a survey of businesses that doesn’t include people like Preussner.
The government said only 1,000 jobs were added in December. But the unemployment rate, which in December fell to 5.7 percent from 5.9 percent, is drawn from an accompanying survey of households, which does count the self-employed.
From November 2001 through December, the payroll survey shows the economy lost 776,000 jobs. But the household survey shows it added 2.2 million.
“These people are not on the payroll, but they’re working,” said Andrew Sum, a labor economist and professor at Northeastern University’s Center for Labor Market Studies in Boston.
Some say the spike in entrepreneurship is a carry-over from the free-agent mindset of the late 1990s economic boom, when workers sold themselves to the highest bidder. But experts caution that today’s free agents could be sorely disappointed if they’re banking on returning to the corporate world.
“Companies don’t want to bring in workers for the long haul,” said Jeff Phelps, chief executive of ABE, a firm that assesses employer compliance with tax laws in regard to contract workers. “If you look at major companies that are really on the ball, they’ve been using flexible workers for years.
“It’s the wave of the future,” said Phelps, whose business has grown 39 percent in the last year.
Labor economists like Dan Arronson of the Federal Reserve Bank of Chicago disagree. Arronson said that the spike in self-employment is temporary, and so is the freeze on payroll jobs.
“It’s cyclical. Once the wage sector improves, a lot of those [self-employed] will disappear,” Arronson said.
The dip in the December unemployment rate can be explained partially by the fact that the labor pool has shrunk as a result of discouraged job seekers dropping out of the market. But some economists believe that the rise in contract-labor arrangements, and people creating jobs for themselves, is making the labor market appear healthier than it really is.
“You’ve got a lot of people pounding the pavement,” said Sum, “and they’ll be glad to take any offer.”
William Baker, 41, of North Aurora, an independent contractor, counts himself in that group.
“I’d much rather be full time on the payroll,” said Baker, who was downsized from a technology company in September 2002 and hired back as a part-time independent IT consultant.
“Getting insurance is complicated and difficult. I like the stability of working for a consulting firm,” he said.
But after witnessing the past three years of mass layoffs and corporate scandal, Sherri Trouse begs to disagree.
The 32-year-old from Bartlett quit her job as a corporate recruiter in April to become an independent contractor. She said she feels more secure on her own.
“In corporate America, there was constantly downsizing and hiring freezes. You were always wondering if you were going to be the next victim,” she said. “I don’t regret making this move at all.”
