Make the Economy Work for Freelancers, Too (#askingforafriend)

Summary

Optimist Economy — Episode Summary
Episode: Make the Economy Work for Freelancers, Too (#askingforafriend)
Date: June 9, 2026
Hosts: Kathryn Anne Edwards (economist) & Robin Rauzi (editor)

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Episode Overview

This episode of Optimist Economy tackles the challenges and systemic issues facing freelancers, gig workers, and the broader category known as “non employer businesses.” With warmth, humor, and real-life stories, hosts Kathryn and Robin break down why the U.S. economy is often unfriendly to self-employed workers, how policy and societal structures make freelancing both a privilege and a hardship, and what solutions might actually build a fairer landscape for America’s millions of independent workers.

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Key Discussion Points and Insights

1. Defining “Non Employer Businesses” & the Growth of the Freelance Economy

• Freelancer, gig worker, self-employed—many names for those outside traditional W-2 employment.
• The Census Bureau refers to this whole segment as “non employer businesses,” essentially businesses without employees.
• Approximately 33 million Americans (about 1 in 6 workers) are self-employed—either solely or combined with standard employment.
• The U.S. paradox: Despite the cultural myth of entrepreneurialism, the U.S. has the lowest self-employment rate among comparable developed (OECD) countries.

“It depends on how you measure it because it is, it can be hard to measure this very nebulous group of people...the US has the lowest rate of self-employment out of any country in the OECD.” — Kathryn (24:26)

2. Barriers to Entry: Health Insurance & Retirement

• Freelancing is often gatekept by access to employer-sponsored health care and retirement—these major benefits most Americans get (or don’t) through an employer are expensive and hard to replicate solo.
• Entry into self-employment is easier for those who can afford expensive insurance or have a spouse with benefits.

“Health insurance and retirement savings [are] primarily brokered by your employer. So if you don’t have an employer and you’re out on your own, that means you have to come up with health insurance and retirement savings on your own. And that’s really hard.” — Kathryn (27:20)

3. Double Taxation and Social Insurance Woes

• Self-employed people pay both employer and employee sides of payroll taxes (Social Security, Medicare).
• They pay into some programs (double for Social Security) but are left out of crucial safety nets: unemployment insurance, paid family leave, group health insurance.

“You lose access to employer-sponsored health insurance. You have to pay double for Social Security, and then it's not clear you would have access to paid family leave...you definitely don't have access to unemployment insurance.” — Kathryn (28:33)

4. Privilege and Penalty: Who Gets to Be Self-Employed?

• Self-employment is correlated with age (older workers) and gender (slightly more male).
• There are structural privileges—like professional networks—required for success and survival.
• There are also “punishments”: heavy tax burdens, lack of benefits, legal and financial precarity.

5. Paths Into Freelancing: Choice or Duress?

• Many enter freelancing by necessity after job loss or dissatisfaction; others by choice to maximize flexibility or creativity.
• Statistically, self-employed workers are more likely to be part-time, and often because they want control over their hours.
• Both hosts share their own journeys—from newsroom layoffs and career pivots to the privilege and challenge of independence.

“There’s a lot of reasons, I guess I do like the flexibility. I like the variety of work...But I think I wound up in this out of making the best of bad situations. Duress, yeah.” — Robin (31:29)

6. Policy Changes That Could Make Freelancing Fairer

• Proposals include requiring companies that hire contractors to pay into social insurance (e.g., a “1099 fee” toward Social Security).
• Emphasize the need to decouple essential benefits from employment so self-employment isn't an exclusive privilege.
• Better rules can reduce workplace abuse, empower genuine entrepreneurship, and make freelancing a true choice.

“The better off we can make self-employed people, the more employers have to be better employers. Even if you never want to be self-employed...you should still be really rooting for self-employment to be awesome and for us to have more of it, because that's going to make your employer treat you better.” — Kathryn (43:04)

7. Real-Life Congressional Testimony: Rage & Realization

• Kathryn shares her recent experience testifying before Congress, facing dismissive and hostile questioning from Republican lawmakers (esp. Rep. Jason Smith).
• She recounts the emotional toll, moments of rage, and the importance of speaking up despite opposition.

“I am a real American. My profession does not disqualify me from being any less American than any other person.” — Kathryn (09:40)

8. The Role of Community and Support

• Both hosts highlight how freelance success often depends on community, mutual aid, and the kind words of others—both in personal moments and in response to public testimony.

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Notable Quotes & Memorable Moments

• On US Tax System Bloat:
  “There are 271 coupons in our tax system. And the total cost of all those coupons is roughly one and a half times Social Security in terms of annual spending.” — Kathryn (15:42)

• On Congressional Theater:
  “A lot of them will just yell for five minutes and get up and leave...you have to sit there and look polite while they’re yelling.” — Kathryn (07:23)

• On Personal Independence:
  “I just wanted my voice to be my own...I have an independent streak and it came in so fierce once I left, I was like, I don’t want to answer for anybody but me.” — Kathryn (34:20-34:57)

• On Power of the Freelance Option:
  “From my point of view as a worker, self-employment was a really good outside option. When I was at a job that wasn’t a good fit...self-employment was almost like my backup plan.” — Kathryn (42:10)

• On Community Support:
  “All the people who reached out...it was helpful to remember that behind these images you see on a screen are people that are very different and nuanced in real life than they present.” — Kathryn (17:23, 46:18)

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Policy & Executive Orders (44:30–45:47)

• Robin’s Exec Order: No more Star-Spangled Banner vocal gymnastics—just sing it! More choirs, less showboating.
• Kathryn’s Exec Order: Mandatory presence for members of Congress during committee hearings—if you call the meeting, you stay for the whole thing.

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Timestamps for Key Segments

• [00:59] — Introductions & episode overview: what is a non employer business?
• [21:47] — Explanation of the non employer business definition and demographics
• [27:20] — Barriers to freelancing: health insurance and retirement
• [28:33] — Double taxation and loss of benefits for the self-employed
• [31:29] — Hosts discuss their own entry into freelancing
• [34:20–34:57] — On independence and self-employment as a calling
• [38:21] — Who chooses freelancing, and why
• [41:12] — How lack of benefits shapes workers’ choices
• [42:10] — Self-employment as a labor market “outside option”
• [43:17–43:46] — Policy solutions, the link between freelancing and broader worker power
• [09:40] — Congressional testimony, being called “not a real American,” and the emotional aftermath
• [15:42] — The tax code as a maze of 271 “coupons” and what it means for reform

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Closing Notes

This episode is a must-listen for anyone who’s ever freelanced, considered self-employment, or wondered why the “land of opportunity” makes it so hard to work for yourself. Kathryn and Robin skillfully couple their experiences and economic expertise to advocate for systems where freelancing is neither a punishment nor a privilege, but a real and viable option for all workers.

Memorable advice for the week:
“Even if you never want to be self-employed... you should still be really rooting for self-employment to be awesome and for us to have more of it, because that's going to make your employer treat you better.” — Kathryn (43:04)

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For further resources, check out their website, newsletter, and lively social discussion spaces.

Transcript

[A]

Are you looking for a daily dose of market news without the jargon and the noise? I decided to go take a look and see what those analysts are saying and who those non institutional investors might be. I'm Ann Berry, investor, CEO and board member. And my show Brew Markets dives deep beyond the headlines to break down the stories of stocks with insider insights. So a really powerful chart there you see just massive deviation. Well, it's the lifeblood of trade. There's just one chapter in there which really struck me because, you know, I've been a CEO of business. You'll come away from each episode of Brew Markets able to ask the questions that help you strengthen your market. Not new episodes. Drop every weekday afternoon. So tune in to Brew Markets wherever you get your podcasts.

[B]

Do you need to go get a drink of water or something? Shot of schnapps? What do you need?

[C]

Could you use a beer? I could really use a beer. Hello and welcome to Optimist Economy. I'm economist Kathryn Ann Edwards.

[B]

I'm editor Robyn Rousey.

[C]

On this show, we believe the US economy can be better and we talk about how to get there one problem in solution at a time. On today's show, we will be talking about a group of people that have many names, from freelancers to gig workers to the self employed to the non employed. That was a new one I learned today. Non employers, businesses without employees. We'll figure out who they are and what they need.

[B]

There are about 30 million of them.

[C]

Apparently there are dozens of 30 millions of us. Announcements, announcements.

[B]

I wanted to thank Josh, who made an eternal optimist level contribution. He wrote that he is a real human person consuming leisure in Charlotte, Vermont, which is Charlotte, by the way, not Charlotte. And I also just want to thank anybody who's become either a utility maximizer donor or a desaver donor. We really rely on all of those contributions to keep everything going.

[C]

Here at Optimist Economy production says thank you so much for all of your contributions since it goes right to Andy and Sophie. Okay, Retcon retroactive continuity where we revisit past things. I have two small ones and a big one.

[B]

Okay.

[C]

Like two truths and a lie, but two smalls and a big. Okay, two small ones. First one would be for optimists who do not follow us on the vertical platforms like TikTok and Instagram. We put up clips from the show and some of the most watched clips we've ever had were from the cashless episode when Robin and I told stories about horrible bank treatment. And I just I have to say that the comment section became just a beautiful space of like, say their name. That's clearly bank of America. And someone's like, yo, I know Wells Fargo when I hear Wells Fargo. And they're like, but don't forget US Bank. That one was. I mean, it was hilarious to hear people revel in terrible banking stories and how much it hit a nerve.

[B]

We also got letters that from people who had worked for banks who also ranted about how bad they were, as well as notes saying, hey, you should have mentioned credit unions as an alternative.

[C]

I should have mentioned credit unions as an alternative. Not that credit unions don't also make mistakes. I have another pet story that is from a credit from a credit union.

[B]

But yeah, credit unions certainly are one way to avoid the biggest banks.

[C]

Okay. Over time, we had a lot of

[B]

letters about overtime as well. Most of them saying, hey, you know, people need overtime. People rely on overtime. It isn't just about misclassification of people. You need to recognize that this isn't just flexible income for most people's lives.

[C]

Yes. And I think I wanted to say plainly that we were not in that episode trying to say that we don't want overtime anymore. What we were trying to get across was that overtime is a way to guarantee rights for workers that either you don't have to work so many hours or you get paid more if you do. And a lot of people are dependent on that extra pay that comes from overtime. And that's something that more people should have access to because right now we have so many people who just work long hours with no extra compensation.

[B]

Yeah. Somebody also asked an interesting question or for clarification, about how we had suggested that the no tax on overtime created an incentive for employers to use overtime more.

[C]

So it's pushing more workers into overtime time at taxpayer's expense rather than your employer's expense. And that's the part that I think is very manipulative of the labor market because it's basically telling employers that we're going to subsidize your use of overtime as opposed to having you employer pay for overtime. And I don't think we said that plainly.

[B]

I think we tried, but maybe.

[C]

Oh, we certainly tried trying and missing. I know we do that. But you taxpayers should not be paying for somebody else's overtime when they have an employer who's paying their wage that they do a service for. Why? Why me worker who doesn't get overtime. Why am I subsidizing someone who does? Like that should be the employer's Expense.

[B]

Yeah. Okay. Big retcon.

[C]

The big retcon was that I testified in front of Congress last week.

[B]

Yeah. Which is why if you didn't get an episode last week, that's why. Because somebody was busy.

[C]

I was busy on the Hill, y'.

[B]

All.

[C]

It was a lot. Optimist. It was a lot. So I was asked by the Dem staff to appear in front of the Tax subcommittee of Ways and Means about

[B]

the One Big Beautiful Bill act, which they have renamed. Yeah.

[C]

About four days before the hearing, they posted the hearing information, and it was called the Working Families Tax Act, I think was what it was called. And I was, like, frantically emailing the Dem staff, and I'm like, what the hell is this?

[B]

Yeah.

[C]

I haven't prepared for this at all. And he's like, oh, no. This is what they're calling the one Big Beautiful Bill act now because it polls so horribly that they've decided to rename it the Working Families Tax Cut Act. And the name of the hearing was your paycheck returned. So this is what it's like. Like, I have to prepare 10 pages of written testimony. It has to be in 48 hours at least before the hearing starts. So Monday, 10am I have to have 10 pages in. That is the basis for my oral remarks, which can be no more than five minutes. Means I worked all the weekend. Pulled, like, really late nights because children don't work on the weekend, which is like.

[B]

Or go to school.

[C]

Yes, Andy. I did in fact, work overtime to get the testimony out. So then you show up on the morning of. You're an hour early. So you absolutely hit up the gift shop and buy a stupid amount of stuff from the U.S. house of Representatives gift shop. And then you go and you can only speak when you're called on. You can't just, like, hit the mic and start talking.

[B]

You. They go through each jeopardy. It's not like.

[C]

Yeah. It's not like you could just buzz in, like, Jeopardy. Like, what is a piece of legislation, Ken? Yeah. You don't get to do that. And then each witness has five minutes, and then the chair of the committee will call on people. And each member of Congress who's on the committee who is there also gets five minutes. And when it's their turn, they can call on the. One of the witnesses versus not so.

[B]

So they can either just pontificate or they can actually ask a question.

[C]

Oh, a lot of. A lot of them will just yell for five minutes and get up and leave.

[B]

They just pontificate. Yeah. Yeah.

[C]

So that's fun because you have to sit there and look polite while they're yelling.

[B]

I'd slip in an executive order here, which is that if it's your hearing, you should have to stay till the end.

[C]

You should have to be there the

[B]

whole time was pretty empty by the end of that.

[C]

Well, they come. Once they ask their question, they leave. I mean, it just so happened that the day that I was there was the day after mainly Republican Party primaries in a handful of states in which everyone who was not an avid trumpeter lost.

[B]

An avid Trump.

[C]

And if there was, yeah, whoever Trump endorsed one, whoever had ever stood up to Trump lost. So this was the Cassidy Laws. Massey. Is that that guy's name?

[B]

Yeah, he.

[C]

They all lost on the same day. And then the next morning was the hearing on the tax subcommittee about your paycheck returned. And the only thing that Trump has done in two years I.e. polling even reasonably well, is no tax

[B]

on tips, on tips and overtime.

[C]

So this hearing, like, I'm, you know, good little girl here. I've got like 10 pages on like, economic implications of debt financing, a permanent revenue reduction, and like, what that means for economic policy because it's quite weak. And I'm like trying to make this case. And I mean, they come out guns blazing about how this is the greatest thing that has ever happened to tipped workers. And if you, if you didn't know anything about the bill and you had gone to the hearing, you would have no idea that it had anything other than a tax that reduced tax on tips. They didn't talk about any other part. It was no tax on overtime.

[B]

That's the truth. They talked about the tax credit for adoption expenses.

[C]

Yeah, tax credit for adoption expenses. No tax on tips and no tax on overtime. And like, that is the entire legislation, according to them. So most of the Republicans did take the chance to yell at me about how wrong or bad I was. I mean, obviously the best one was the chairman of the House Ways and Means Committee who was on the subcommittee. Jason Smith from Missouri, who has an amazingly nasally high pitched voice, told me that what's wrong with America is economist and that I'm not a real American. And real American benefited from this bill. I mean, y', all, he is 10ft away from me, looking right at me as he's like, real Americans benefit. Oh, my God. I was like, shaking with rage.

[B]

Should we roll the clip?

[C]

Yeah, roll it. Thank you, Congresswoman. I'm going to quickly correct the record. I am a real American. My profession does not disqualify from being any less American than any other person. It doesn't require any adjective afterwards. Doesn't matter what my profession. I don't have to sit here and list that I have kids or that I have a business or that I have a job or that I have workers. I am just an American. And I don't necessarily appreciate having to tell you a hard truth about how indebted our country is and how much it will cost. You have created the largest program in U.S. history is our debt service. For someone to tell me I'm not an American just because I have to tell you the unfortunate reality that this can't go on for forever. Thank you for letting me correct the record. Investments in children and families tend to have a. You know, they talked about this in the movie you've Got Mail, where it's like, in the moment, you never say the right devastating thing to a person. It's only after they walked away that you think of, like, the actual perfect, devastating comeback to whatever it is someone said.

[B]

Are you guys still working on that?

[C]

Yeah, but in my head, I'm, like, on. I'm on day seven of, like, what I should have said to this. Who said I wasn't a real American because I pointed out that he's bankrupting the country. Yeah, I. I'm still coming down from all that rage. And actually, my editor at Bloomberg, who watched the hearing, said that he could see I was upset because my hand holding the pen, taking notes at one point was shaking. And then I just put it under the table so no one could see. Oh, man.

[B]

Yeah.

[C]

Oh, man.

[B]

It was a day.

[C]

It was a day. Why do I do this? Like, why go. If it's just this moment, I think, is a fair question.

[B]

That is a good question, actually. Do I get that up?

[C]

Do I get anything out of it?

[B]

I. Yeah, I mean, they don't. You don't get paid to go do this.

[C]

You know, they don't. I had to pay everything out of pocket to go.

[B]

They don't pay you. They don't fly you there. They don't put you up in a fancy hotel.

[C]

No.

[B]

Then to go be accused of being not a proper American American, I did have these.

[C]

Like, were my dad alive, he would have been sitting right behind me. And when Jason Smith made his comment about how Econom or what's wrong with America, because real Americans are the ones sitting at the other end of the table, I mean, it might surprise y' all to know that my dad would not have gotten up to defend me. And he would have been like, she's fine, she'll take care of herself. She's got enough mouth to handle it. He would have followed Jason Smith out of the room to be like, how dare you disrespect your office. And he, I mean, growing up, he always said you have to respect the office even if you don't respect the office holder. And you know, people's power comes from the respect that is given to that seat. And I'm like, when he got up and walked away, in my mind, I couldn't help but think of like, there is a version of the world where my dad is alive following you out of here. And I'm trying to get him to call me so I can listen in on speaker when he chews you out. Because like, man, did that guy have a temper. And you would have heard it. And he wasn't easily intimidated because he was an elected Republican official and a judge. So we do this because you never know who's listening.

[B]

Yeah. In the course of putting your testimony together, did you kind of come to any new realizations or conclusions or insights?

[C]

Yes, I think I came to three realizations. One was I have been undercounting the number of tax cuts that we've had this century. I've been doing this on social media and I do this in my newsletter and I talk a lot about the amount of money we spent on taxes.

[B]

On tax cuts.

[C]

On tax cuts, sorry. On tax cuts. And when I sent my testimony, I don't have an employer. Right. I just like a one woman shop. So I sent it to friends to fact check for me and one of them wrote back like, you know, you're missing like two tax cuts. I was like, are you kidding me? I had seven and I was missing two. The biggest ones were 2001, which was followed by 2003 and then also 2012 which made the 01 and 03 cuts permanent. And then 2017 and now 2025. But there were like three other ones in like 04 and 05 in 10 and then in 14 they were smaller but they all also cut taxes. And the first bunch were about accelerating the Bush tax cut phase in, if that makes sense. And then there was another one that happened in 14 and they're all called like jobs and families and workers and tax act and growth. So brushing up on my tax bills and missing some minor pieces of legislation. That was, that was one. That was one. The second thing I got was just the articulation of it should not be your taxpayers responsibility to subsidize low wage employment.

[B]

Yeah.

[C]

Which is what no tax on tips and no tax on overtime is trying to do. It's. You're subsidizing somebody else's employment. And it kind of cemented to me that the tax system is really used for almost like protecting capitalists from capitalism.

[B]

Yeah.

[C]

My husband came in one night, it's like 11:45pm on a Saturday, and I am at my desk just like buried in documents. And he's like, hey, how's your it going? I'm like, I figured it out. He's like, you figured it out? And I was like, yeah. I got the Joint Committee on Taxation's expenditure survey and then I put that into a document and I decided I was going to typify it for every type of tax expenditure that exists. And it turns out there are 271. And he was like, okay, okay, honey. Okay, okay. Now I got really deep into tax expenditures, which are. It's like spending that goes through the tax code. So like the child tax credit is a tax expenditure. No tax on tips, that's a deduction. The no tax overtime, that's a deduction. All the deductions in credits and adjustments you can make, those are all called tax expenditure because you would owe something in taxes, but they give you a deal. So it's like the total coupon cost of the tax system. There are 271coupons, 271coupons in our tax system. And the total cost of all those coupons is roughly one and a half times Social Security in terms of annual spending.

[B]

Holy cow.

[C]

The largest program we have are all the coupons we send through the tax system.

[B]

Wow.

[C]

I think what I realized when putting this together is I thought the problem was this makes the tax code really complicated. People don't know what they owe in taxes. And it's created a runaway success of the tax preparation industry whose prices run more than twice the pace of inflation. What I realized was that this is like, this is why the tax system won't change. Because now you've created 271 constituencies who have a vested stake in a complex system where none of them would say, I want the tax system to be complicated. They would just say, I want my thing. And the scope of the problem like really laid itself out before me when I was putting that together at like midnight on Saturday with a beer next to me.

[B]

Good.

[C]

You know, thinking about how we actually get past here. And then the third thing I learned was that you should never say to the House Republicans on The tax committee to their face, you are a categorical failure and you need to raise taxes. I mean, I know I got some heat in the testimony, but I did start with the tax system as a categorical failure and you need to raise taxes. So I didn't exactly, like, hold it back.

[B]

No. Yeah. And I love how you became, like, the face, like they all over their social media of like, just that clip, you need to raise taxes. And it was like, democrats want to raise taxes.

[C]

Yeah, that was. That was good. And then I. I guess the other, like, why I do this is because you never know who's listening. But also it's a moment. This is like a test, right? You're in a class. Sometimes you don't really learn as much from the lectures until you actually prepare for the exam. And I feel like I learned so much over the past couple of weeks. Even if it was just like, what were the things that really landed with people. I was very glad to have arrived on something. Even if it was just like the most difficult way to come upon a successful talking point, you know? And if you need an optimist bent, I will say that there were five Republican witnesses, and the majority of them came up to me afterwards and said that they were both impressed with what I said or shocked and dismayed at the behavior of the Republicans, including one person who said that they were deeply ashamed. So, you know, it's helpful to remember that behind these images you see on a screen are people that are very different and nuanced in real life than they present. So maybe a Republican pulled up a big poster to tell me, I don't know what I'm talking about, even though I knew exactly what I was talking about. But I don't know what hit for him because he's performing and so was I. And then I just, like, immediately walked out of the room to go retrieve. Walked out of the room in a huff to go retrieve all the souvenirs

[B]

I bought,

[C]

including a onesie for my six months old that has US House of Representatives sealed and says, this is my house. Next time I'll do prop comedy and I'll hold up of like, what a real American, Biden.

[B]

What a real American.

[C]

Okay, so that was Congress. Yay.

[B]

Okay, let's take a break.

[C]

And we're back. Today, we're talking about people like us. Yes, people like me, Robin, Andy, and Sophie, the freelancers of the world, I think, who have their own business.

[B]

This whole episode is like, hashtag, asking for a friend.

[C]

Asking for a friend episode.

[B]

You know, we got a letter today, this morning. I don't know if you saw it from somebody who was asking more or less this question. I was like, are our phones tapped? Like. But we have gotten several questions about this, like, how can we make the US economy better for creative workers, for freelancers? You know, not just people who are in the gig economy or maybe abused by Uber, but people who, who actually choose to do this kind of work on a freelance basis for whatever their reasons are. This woman, her name is Rachel Gitlevich, who's currently living actually in France, said that France has some interesting labor and tax solutions that are much more in line with how people are working in 2026. And so she wondered if you had advice or words of encouragement for freelancers on gaining any kind of economic or social benefits in the US what she also said is in spite of how the law sees us, we're not all small entrepreneurs or just employees who absorb all the costs from our employers. Under W9,

[C]

my term and condition was going to be a little bit of like a. I, I don't, I don't know what to call these people. So imagine if you will, like a spectrum and like far on one end is people who have a W2 employer and that company could be big, that company could be small, but they're a W2 employee and that's their only source of income. And then on the other end of the spectrum is someone who owns a business who has W2 employees. It could be a restaurant, it could be a large company, but they have employees and so on. In between is this huge gray area, huge gray area that, that has different tax filing status, different income forms from 1099, MISC and K and NECs for those in the know, you know what I'm talking about. There are people who would say that they're self employed, people who would say that they're freelance, people who would say that they run a business. They're all kind of lumped in. So the, the Census Bureau has been very much trying to understand how large this group of people is. And it's very hard to do in public surveys. So the best way to go through it is through tax records. And so in their brilliance of, of studying this population, they came up with the term non employer businesses.

[B]

Non employer businesses. So that's being self employed, but they don't want to call it that.

[C]

Yes. So one end would be someone who is basically like shoved into being a contractor when they're really an employee where they worked for one company as a contractor. And they probably should be an employee, but all the risk is dumped onto them. And then the next one is like freelancers and gig workers who would probably describe themselves as self employed because they

[B]

have a lot of clients, a lot

[C]

of clients discretion over their business. But they're not a large business. And so they, they file as like say a sole proprietor. Then you have people who own businesses that don't have any employees. So would be an llc. This has multiple clients and they. What kind of differentiates between them is do they file their taxes using their Social Security number or an employer identification number? And so all of those people in between are basically running a business without employees. And that's what they are without frankly

[B]

the benefit of being an employer. And all the, what was it, 271

[C]

coupons to get that coupon. So the Census Bureau has tried to understand like with the rise of platform gig. Yeah. Work like Uber. You're a non employer business, AKA self employed. So they're going through when they're trying to figure out how many of them there are and what they come to is around 33 million. Wow. Around 8% of all workers are self employed. Just self employed.

[B]

Okay.

[C]

Around 83% are wage and salary. Just wage and salary. And then about 10% are both like you.

[B]

Like me. Yeah, yeah.

[C]

So we can do like the Catherine is the self employed only that's me. And then the Robin is the self employed and wage and salary. It's around 17% of the workforce and it's not evenly split, but it's about. If you wanted to know the actual percentages, you can find them. But think of it as around one in six workers falls into the self employment category and about half of them will be solely self employed and the other half will have of also wage and salary employment. And some of that happens because they're looking at tax years. Some of that is gonna be a function of they switched from self employment to work or employee to self employed or self employed to employee. But it's, I mean they look at previous year's filings. I mean it's fairly consistent. I mean Americans, we love to think that we are like the small business entrepreneurial haven. But actually it depends on how you measure it because it is, it can be hard to measure this very nebulous group of people if you were to measure consistently in the US and all of Europe. The US has the lowest rate of self employment out of any country in the oecd.

[B]

Oh really?

[C]

Yes, it now it's that measure of self employment so it's measured consistently across all of those countries. But the OECD is the Organization for Economic Cooperation and Development and it's really just our peer countries. Most of the EU will be in or all of the EU is in there.

[B]

Yeah, Japan, Australia.

[C]

Yeah, Canada and then kind of a handful of Central and South American countries. It's really do you can think of it as just a function of like the richest 26 to 30 countries in the world are what we call the OECD and the US has the lowest self employment rate out of all of them. And even countries that you would say with like oh, they have such like crippling labor policy, all these taxes that employers have to pay, I mean they've got higher rates of self employment than we do. I guess the US has a lot more startup activity like investor backed businesses, people like starting companies in the US but we end up on like two sides because we love businesses so much. This is a great place to start businesses, especially large scale businesses. But because we dislike workers so much, this is a hard place to be self employed. And so you end up with kind of like they want the businesses that we have like we, we would like to have more self employed people. And so I think in some ways I see self employment as like a, a function of worker power because we have so little, we have lower rates of self employed despite having 33 million. I mean it should be, be could be a lot higher.

[B]

That's a lot of people. Can you. How long have you been freelancing or how long have you had. I'm sorry, excuse me, how long have you been a non employer business?

[C]

I've been a non employer business since January of 2023. So I'm entering my fourth year.

[B]

Right. So I have been a non employer business since 2010. For those of you who are not non employer businesses out there, we should just say like why it bites to be a non employer business. I mean there's a lot of great advantages which is why so many people do it. But what is it that people are concerned about when they ask about like how can we make the economy better for freelancers and artists and creatives and non employer business types.

[C]

Non employer businesses. I think it's a two way street of it's a privilege that's withheld from some and then there are punishments to doing it it. And so making it better is not just about making the actual status of being a non employer business better, but also who gets to be a non employer business. It's disproportionately older workers and slightly more male. So you're not going to find a lot of like 23 year old self employed people. It's much more likely to be an

[B]

older worker, somebody who's developed some kind of expertise that they can take out

[C]

and work on their own and has like a network and things like that.

[B]

It. Yeah. So that's interesting. I just, I hadn't really thought about this that way. That is it because there's a certain amount of, you know like a privilege to it that it also gets essentially penalized. Right?

[C]

Yeah. I mean I think the, the privilege side is on the point of entry. In the US we have health insurance and retirement savings primarily brokered by your employer. So if you don't have an employer and you're out on your own, that means you have to come up with health insurance and retirement savings on own. And that's really hard. And for some people it's just, it's a little too risky. For some people it feels too expensive. For other people, I mean it is completely insurmountable. You have to have your group health insurer plan. You can't really afford health care without it. That really creates a barrier of almost like gatekeeping, this idea of self employment by people who can get over the health insurance retirement savings part. But then once you're self employed then you have your own. Like now that I've gotten into self employment you have all kinds of challenges that come from how the tax system is set up.

[B]

Right. The taxes are a problem. I feel like we've mentioned this before but you know, as a not. I have to learn to use this all the time as a non employer business you wind up paying the taxes as the employee and as the employer, especially for payroll taxes like Social Security taxes. And that's a lot.

[C]

It is a lot. And it, it's two problems. One, you have to pay both sides. That's a newer policy that changed in the Clinton administration. And then the other problem is that you're included on the payroll tax for unemployment. You go off into the land of self employment and you lose access to employer sponsored health insurance. You have to pay double for Social Security and then it's not clear you would have access to paid family leave if your state has it. And you definitely don't have access to unemployment insurance. So you lose, you're double playing for one benefit, you lose the other really good workplace social insurance benefits. So in some ways it is very much a privilege to be self employed.

[B]

Yeah, I mean so. And it Also, shouldn't be a surprise that we maybe don't have as many small businesses because we hit people on both sides of it.

[C]

Hold on. We had to do a really quick timeout. Sidebar.

[B]

Okay.

[C]

Small business is not a normal phrase because it has so many definitions. I think the Chamber of Commerce or the Small Business Administration, if it's under 500 people, it's a small business or under 250.

[B]

I feel like there's some kind of like equivalent to sort of flatter sizing. Like we need extra small, small all the way up to triple extra large.

[C]

Triple extra large, small business. Yeah, but so if you've ever heard anyone talk about small businesses, it is not clear that they're talking about what you are talking about. Because they want to talk about how many small businesses there are. They push that number way up to under 250 or even 500 employees. As a small business, we're talking about people where it's like one, right? The business is one, just the person and that is the non employer business. But yes, non employer businesses are a very key pipeline to actually small businesses where you get enough work and money that you can incorporate and start hiring people. Health insurance is a big problem. The payroll tax is a big problem. That one we talked about in the Social Security episode where I spoke at like 800 words per minute about all the things I wanted to do for Social Security. I did have someone who tells me they listened to all the episodes at one and a half or two times except that one. They're like, I had to slow it down.

[B]

Run that one at 0.75 speed.

[C]

Yeah, run it back. One of my proposals I had is in order to alleviate payroll tax burden on non employer businesses, AKA the self employed, you would have companies that use contractors would have to pay a fee for their contractor.

[B]

Oh, Right, right. The 1099 fee.

[C]

It was like a 1099 fee that for every 1099 you issue, you need to pay into Social Security on behalf of the contractors you use, not just your W2 employees. And so that would be a way to kind of offset non employer businesses. All right, so we got to do some policy. Why do you like or dislike being a non employer business?

[B]

There's a lot of reasons, I guess I do like the flexibility. I like the variety of work that I get to do. But honestly, I mean, I like a lot of people. I think I wound up in this out of making the best of bad situations.

[C]

Duress.

[B]

Duress, yeah.

[C]

So 16 years you've been a non employer Business.

[B]

Yeah, I left the LA Times voluntarily in 2009.

[C]

Bad year.

[B]

So I got another job and I went to, to pivot to a new career and I hated it so much that I was like, I don't know, clinically depressed within about three months and quit within another three. But I was lucky because I hadn't been out of journalism that long and also so many other people had also been sort of forcibly thrown out of journalism that they were all trying different things and creating their own little non employer businesses. And so people just started to call me. And so rather than look for another job, I just began freelancing really just because I was just offered the opportunity. And then pretty quickly I got a big client who kept me on retainer and then I never looked back.

[C]

I had a similar point of entry which was leaving a W2 full time employer under duress. And it was a duress that came from a lot of directions. But the real breaking point was I had just had my second kid and I came back from maternity leave and I was like, I can't do this. Like it's, it was too, it was too much the, the job and I weren't a great work style fit. And so I quit with the intention that I would go get a job elsewhere. And man, your girl did not get a job. I was like, I'll get another one. Like I'll apply, like I'll take some time off, like this will be great. And I just, I never got one and I applied to a bunch of places and you know, it always came apart at the last minute. But I think the real heart of it was that I was offered the chance to write for Bloomberg, which is not something most economists get the chance to do especially. I mean, I was only like 36 or 37 at the time and I didn't have a Nobel Prize. I wasn't like a famous economist. I was just. They said I was a good writer and I could explain things. And so they were going to give me a chance to write a Bloomberg column, which was so exciting. But you know, having an opinion column and an employer are not necessarily a good mix.

[B]

No, they are not.

[C]

I thought it was like too special to risk and that I would take on as much work as I could on the sidelines and like basically give this column a chance. And then it's, you know, it's been three and a half years.

[B]

It's funny, I remember when I started this, when I started freelancing, people said, God, I could never do that. Like I just don't have enough courage. But man, if you work in a business that's been as disrupted as, as the news media, like there's no security in being in the workplace either, right? So I don't know, I'd rather have my fate be my, my own. To a certain extent I think I,

[C]

I just wanted my voice to be my own. I was embarking on this journey where I'm trying to communicate on every platform, right. Go on TikTok and Instagram, go on, have my own newsletter, write a column and then start a podcast. And I just, just wanted it to be just my name, nobody else's words but mine. Which is why sometimes they're bad and sometimes they're okay and I mess up a lot and we have to do retcon every episode. But at least it's just me. I speak for me. I have an independent streak and it came in so fierce once I left, I was like, I don't want to answer my opinion. Any employer who's operating in their interest instead of mine, my interest is a better economy. And that's it.

[B]

Yeah, I mean there is a certain amount of. It's hard to go back if you can make ends meet, but it can also be lonely.

[C]

Now statistically it is the case that or at least in the evidence and data we have about self employed workers, they have very high rates of part time.

[B]

They work in their non employer business

[C]

part time, their non employer business is part time. Because the current population survey where we get our unemployment rate, it has a measure of self employment that is going to be more limited because. Because it misses all the people who are like formally incorporated businesses without employees. Technically they are employee of their own business for the current population survey. So you miss a big chunk of people. But of the people who are freelancers, gig workers, contractors who are self employed in the survey, they're much more likely to be part time than workers overall. And they're more likely to say that they want to be part time. Like they're not part time because they can't find work, they're part time because they don't want full time work. Granted, the part time cutoff is 35 hours a week.

[B]

That's pretty.

[C]

And I'm like, that's kind of like about my full time cutoff.

[B]

Exactly.

[C]

I feel like 35 is full time, 30 is really full time. Right. But you do get people who are bringing in money, have more control and flexibility and are working less than 40 hours a week. Yeah, I was looking with a set of co Authors we looked at, is being self employed a choice or not? Is it something that's empowering that people want to do and that they move towards? Or is it something where they would prefer to be an employee but they can't get wage employment or they don't want to be an employee and they prefer to be a contractor? Here's the amazing term we alighted on non employee employment. It's almost as good as non employer business. Non employer business, but it's non employee employment. So we called it non employee employment because we hate ourselves and people who would read our report because people who, who say like Uber gives people doordash, gives people opportunity to have control over their schedule, to pick their own hours, pick what they do and they don't want to be employees.

[B]

Or is this just a desperation job because this is you find yourself in some sort of duress?

[C]

What we found was that it was path dependent. Like a lot of people arrived into non employee, employer, employer hood, non employee arrangements because it was like obvious they didn't have a choice. They hadn't worked steadily in the past two years, they didn't have a lot of prior W2 work and they were from malemployed groups.

[B]

Mal employed.

[C]

Are you picking up on the baby crying? Yeah, I am. Malemployed groups be like people who have really high unemployment rates. So workers with less than a high school degree, they have very high unemployment rate all the time. So if they have really high rates of contracting and being a non employee, that's probably because they couldn't get a W2 job. Certain immigrant groups had really high non employee arrangements. But then on the other hand, the other kind of really high rate was amongst people who have like advanced degrees and were 60 and made incredible money and had worked in a salary job in the past year.

[B]

And so you just wanted anyone to take Fridays off to go golfing.

[C]

You wanted to take Fridays off and go golfing and build their best friend as a contractor, you know, as a, as their own business. Yeah, I mean it encompass encompasses so much. So I think one of the problems that the contractor classification fight ran into is the there's people who want to

[B]

be in this position.

[C]

There were people who desperately wanted to be a contractor and didn't want to be an employee who would have benefited from being an employee because they would have made more money and had benefits but they didn't want it. And so making companies behave and telling workers what to do are not the same thing.

[B]

Well, and there are a lot of people who Just don't want to work for someone else. They just don't have the personality for it. They don't have the disposition, they don't have the, you know, mentally like to work in a 9 to 5 kind of slot. They, there's, they had such a good

[C]

first employer that they find every other management structure to be so subpar that they become ungovernable and really hard to actually manage because their management expectations are so high. And they make that clear in every meeting possible that the people who run the plays are not doing a good job. That could be anybody. Yeah, this, this is the problem that you have in trying to regulate this on workers behalf is that there are lots of workers who even if they could make more money, would opt out of it. So I, you know what it actually reminds me of? Childcare.

[B]

Yeah.

[C]

Right now we have this culture war around moms about whether or not they choose to work or put their kids in care. It's dumb. We don't need a culture war around this. And it's also the wrong division because you see that women either work and pay for care or they don't work and stay at home and take care of their kids. Well, that's not the right dichotomy anyway because there's also lots of women who work and don't pay for care because they can't afford it and they just put their kids somewhere that is sometimes safe, sometimes not safe, sometimes quality, sometimes not quality. We don't know like what share of women would stay home or work if childcare wasn't this massive separator in between. Like if childcare was free, universal and high quality. Wait, are you hearing, Is it the baby? Can you just hear it? She feels very strongly about this. Her mom's self employed. But like how many workers would legitimately prefer to be running their own place and being their own non employer business versus working for an employer? We don't know because we've never had the health and we've never had the retirement and we have this like very lopsided payroll tax structure that they get hit by. And my view as a labor economist is that anything that gets in the way of a worker making a decision where they're optimizing their career in terms of what they do and how they do it, that's bad. The economy is losing out on a better decision. Like I would be an amazing wage and salary worker, but I have to be home to take care of my kids or I have to be home for this. And so I have to run my own business. It's not what I really want to do. Right.

[B]

Conversely, yeah, I, I need health insurance and so I'm still an employee where I could be building a business that would employ other people or.

[C]

Yeah, I can't start. Yeah, yeah, I can't start my business for five years because that's when like I'll be eligible for Medicare or I'll be able to afford health insur or you know, like you just those type of. They mar our decision making and they make our economy worse. If for no other reason people aren't doing what they want to do, we'd

[B]

just be happy, just be happier. Do you think that we can, we have both? You know, in other words, if people don't want to have an employer, but they want to be contractors, are we just always going to have a system that companies abuse?

[C]

No, not if we set good rules and policies in place. I mean, they, they employer and company abuse is the moving van. You will fill it however big it is. That's how much stuff you'll put in it. I think workers should have the same type of power that companies do and that they get to run their business how they run their business. I think this kind of goes back to me being a capitalist at heart. You know, from my point of view as a worker, self employment was a really good outside option. When I was at a job that wasn't a good fit that I, you know, I wasn't doing well at, self employment was almost like my backup plan. And the better my backup plan is, the more employers have to try hard. For me. There are lots of paths that lead into self employment and there are lots of paths that lead out of self employment for people. But the better off we can make self employed people, the more employers have to be better employers. Like, even if you never want to be self employed, even if you're like, listen, it's just not for me, like I want to have an employer and that's it. Like, you should still be really rooting for self employment to be awesome and for us to have more of it, because that's going to make your employer treat you better. Yeah, I don't think people see it like that. I don't think they see it as, you know, the pipeline to entrepreneurship or like a real clear channel of worker power, but it's both. So we can make it better.

[B]

We can do this and we can do this.

[C]

We can do this.

[B]

All right, let's take a break. We'll be right back. Shall we go to Executive orders.

[C]

Executive orders.

[B]

So my executive order is inspired by all these sportball games I've been to in the last couple of months, seeing the actual notes to the Star Spangled Banner. Honest to God, I don't know who. I mean, why everybody thinks that they are the new Whitney Houston. Just sing. Sing the song.

[C]

It's a pretty good song.

[B]

It's an okay song. You know what? And it's hard to sing. And it's hard to sing well, so you can just sing it. Well.

[C]

One time I was on a study abroad. I was in Paraguay at a rural university. The whole program was about, like, urban and rural poverty in South America and, like, what are successful strategies that they use. And the Americans and the Paraguayans, like, were doing skits and stuff. And then at the end they're like, well, why you don't we. Why don't we sing? And we start singing the Star Spangled Banner. And like, the one girl on the trip who could actually sing was like, y' all started way too high. You can't. You can't start that high. It's such a high song. And I mean, we got to the point the land of the free. And I mean, I don't think anybody's voice didn't crack. And those kids, those Paraguayans laughed their off at us. They thought that that was. I mean, they were rolling. And we, you know, know, we laughed too. It was hilarious. It was hilarious. It's not an easy song to sing.

[B]

It's. It's not an easy song to sing. And I would like to see more choirs sing it and, you know, just do it in harmony and do some. Do some interesting things with it. But I'm really tired of the, like, gymnastics. The high vocal gymnastics as. That's not the song. Okay.

[C]

All right. My. My executive order, inspired by my travels this past week, congressional district would be the. That in Congress, you have to be present. So you have to be present during a committee hearing, and you have to be present on the floor if there is debate. And you're going to have a mandatory attendance for all of these things. And honestly, there's going to be a lot of hearings that could have been an email as a result, But that. That'd be.

[B]

That's a win.

[C]

Win. It's very selving of like, you need to be there and look at me and hear the things I say.

[B]

That's right. If you're. Well, I mean, really, if you're going to have a hearing and it's going to be a certain degree of theater Stay for the curtain call.

[C]

Stay to the end. Yeah. If it's theater, you're in the audience, like, get popcorn. Watch it all go down. All right, spiritual sponsors.

[B]

My spiritual sponsor last week was horchata with cold brew coffee in it. Now you might say to yourself, there's cinnamon in horchata. There is, but I know that there's cinnamon in horchata. So it's like, surprise. Cinnamon. Cinnamon. No.

[C]

The big Cinnamon lobby got to you. Did Robin. What did they do? What did they say?

[B]

No. Yeah. No. Orchata with cold brew coffee.

[C]

Really good question for production. How much does Big Cinnamon pay you to say that? My spiritual sponsor for the week is listeners and readers and followers across the platforms who very much boosted me up after tough bruising hearing, which I can talk about now. But I was very. I was wrecked for the rest of the day. Just like held it together, but like extremely unhappy in how I was treated and felt like I was, like it was pointless. I was silly for preparing so much. And I had this like, what does it all mean? Why does it even matter? Kind of moments and all the people who reached out in response to the clips and I posted on my newsletter my. My written testim and so many people wrote back and posted so many nice things about that and so was helpful to remember. This is really much in contrast to the executive order where Congress has to stay and listen to me. My spiritual sponsor is remembering that they don't actually need to listen to me because you are nice. Optimist Economy is a nonprofit media company. We can accept individual donations at our website or you can direct a contribution through a donor advised fund. We're also on benevity. If your employer is one of the hundreds that use that. And why do you change the words every time we talk about the Optimist Economy baseball cap. But we've neglected to hype the Optimist economy stickers that are also available at our merch store. Honestly, the tote bag is the biggest hit in my family. Is everybody. Everybody loves the tote bag, which you didn't write about, which is something different. And I can read Robin.

[B]

The tote bag is also so good. That sticker's only two bucks. This podcast is edited by Sophie Lalonde. Our social media videos are produced by

[C]

Andy Robinson, the four non employer businesses today.

[B]

Andy makes all the video clips that you see on TikTok, Instagram, Facebook, YouTube or LinkedIn. Feel free to share those and if you're on substack as a free or paid subscriber, to optimist economy. You can join our chat room. That's it.

[C]

That's it.

[B]

Let's stop talking.