May 21, 2024 - Technology

America's freelance capitals

Bar chart showing the metro areas with the highest average freelancer earnings in 2023, overall and by the service offered. Overall, San Jose, Calif., had the highest average freelance earnings at just over $60k per year. Nashville led in earnings for creative services at $56k, D.C. led for technical services at $75k, and San Francisco led in professional services at $61k.
Data: Census Bureau via Fiverr; Note: Analysis includes tax returns for non-employer entities with at least $1,000 in annual receipts; Chart: Kavya Beheraj/Axios

San Jose, San Francisco and Washington, D.C., are America's freelance capitals, finds a new Fiverr report, with the highest annual earnings per freelancer among the 30 biggest U.S. metros in 2023.

The big picture: Freelancers account for 4.1% of the U.S. labor force, per the report — and many seem to be finding success, with 43% reporting a revenue bump last year.

What they did: The report, which freelance platform Fiverr published in partnership with market research firm Illuminas, is based on data from several government sources, researchers' estimates and a survey of 801 freelancers conducted between Jan. 26 and Feb. 7, 2024.

What they found: The country's freelancers seem a generally optimistic bunch, with 55% expecting to earn more this year than in 2023.

  • 29% of freelancers also have a traditional job, though the share who solely freelance hit 71% in 2023, compared to 61% in 2021.
  • A "striking" 75% of freelancers with a full-time gig say they're highly satisfied with their side hustle, per the report, compared to just 47% who feel the same way about their day jobs.
  • The markets with the most new freelancers between 2018-2023: Orlando, Miami, Las Vegas, Houston, Tampa and Nashville.

Follow the money: What freelancers make can vary widely among cities.

  • Those in San Jose made an average estimated $60,135 in 2023 — hello, tech money — while those in St. Louis pulled in just $36,234.
  • Of course, San Jose and many of the other cities with relatively big freelancer earnings have comparatively high costs of living.

Caveat: The report's earnings data is based on individual tax filings as a "good approximation" for freelancers.

  • Some freelancers may be involved with more than one tax entity, while others may work together on a business that counts as a single tax entity.

Stunning stat: Gen Z freelancers appear to be acknowledging the value of their work, with 76% saying they're at least somewhat likely to raise their rates or fees in the coming months, compared to 49% of freelancers overall.

Friction point: Concerns about companies embracing generative AI are particularly pronounced among freelancers, many of whom are in creative fields and, with no strong ties to any particular employer, may feel especially vulnerable to being replaced with the emerging technology.

  • Yet the report finds that 40% of freelancers are using some form of AI themselves to help get their work done.
  • "Freelancers using AI-based tools experienced a significant boost in productivity, saving an average of 8.1 hours per week," the report finds.

Reality check: While freelancing can have its benefits — like flexible schedules and locations — it can be tough to get started, to be treated well and paid promptly by clients, and to get health care and other benefits.

What they're saying: "We are in our seventh year of putting this report together, and year over year, we see more and more people choosing the freelance lifestyle," writes Fiverr founder and CEO Micha Kaufman.

  • "It confirms my belief that independent work is the future."

The bottom line: Freelancing has challenges of its own, but a regular job simply isn't the only way to thrive anymore.

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