While self-employment has long been a feature of many trades, in recent years a growing number of professionals – particularly in the service sector – have been turning to freelance work. At the same time, companies have dramatically expanded the share of their workload they outsource to external contractors, in ways that would have been unthinkable just a few years ago. A shift in mindset seems to be reshaping the world of work, towards a short-term, project-based model that favours temporary contracts over the traditional approach of investing in, training and retaining in-house staff embedded in each company’s own structure and culture. Cost-cutting increasingly appears to drive many corporate decisions, with firms opting to pay only for specific tasks as they arise. This practice has become so widespread that many organisations now combine a core of permanent employees with a flexible network of freelancers.
This trend – which may offer a glimpse of the kind of labour market we are moving towards – doesn’t bode well for the quality or stability of employment. To help us make sense of it, Equal Times spoke with one of the leading scholars of the social and economic impact of these transformations: British sociologist Alex J. Wood, assistant professor and research fellow in economic sociology at the University of Cambridge in the United Kingdom, and a former member of the team that developed the Online Labour Index at the University of Oxford. This index was the first tool of its kind to measure fluctuations in online labour activity between 2016 and 2024, tracking the work of freelancers across the world’s five largest English-language platforms – along with several Spanish- and Russian-language sites monitored between 2020 and 2024. Together, these platforms account for more than 70 per cent of the global online freelance market.
There is a general sense that an increasing number of workers are either choosing, or being forced, to work as freelancers. What does the data tell us?
I do think there’s been a growing trend towards freelance and self-employed work in advanced capitalist countries across the West. But it’s also true that the real surge came earlier, between 2000 and the Covid-19 pandemic.
Now, in most countries, the number of freelancers is rising again, though not necessarily to pre-pandemic levels, and not evenly everywhere. Much depends on regulation, business practices and the broader way each economy is governed. In Scandinavia, for instance, which has highly regulated labour markets, employment tends to be less fragmented, making companies far less likely to rely on self-employed workers.
So, the stronger the labour protections, the fewer freelancers there tend to be?
Yes, absolutely, although the type of industries in a national economy will also make a difference. For instance, the UK’s economy is very focused on services, which means there is a lot of potential for those services to be provided through self-employment. If you have an economy more focused on manufacturing, such as Germany’s, there is much less potential for this.
Digitalisation has increased the ability to fragment work geographically, while also enabling people who are not formally employed to contribute to the labour process, even if they are scattered across a country or throughout the world. This helps explain the sharp rise in self-employment between 2000 and the pandemic, driven by the growing use of computers and the digitalisation of work. More recently, we have seen the rise of digital labour platforms such as Uber, Just Eat and Deliveroo, alongside freelance marketplaces like Upwork and Fiverr. These platforms reduce the costs of finding freelancers through their algorithms, which guarantee access to available labour. This development has coincided with a decline in labour regulations and a weakening of the ability of trade unions to pressure companies against outsourcing work to non-unionised workers.
This link between technology and job insecurity brings to mind the old strategy of divide and rule. Given the growing fragmentation of work, union representation and collective bargaining have become increasingly difficult, while technology enables many companies to say, in effect: “This is how we operate, deal with it.” Do you think companies are consciously using technology as a disruptive tool to their advantage in this regard?
I think so. We conducted a study of freelancers in the UK – self-employed workers using platforms such as Uber and various freelance marketplaces. In the case of Upwork, we found remarkably high levels of support for trade unions, in fact, much higher than among conventional employees. Some workers even said they wanted to form their own union, which shows a very clear desire for collective representation. I think we should be asking these workers whether they believe there ought to be some kind of works council for platform labour – similar to those that exist in German industry – where a group of workers would be elected as representatives, consulted on major decisions and given the power to veto them. In fact, we found greater support for this idea than for traditional unions, because people recognise how difficult it is to organise a union of freelancers. With platforms, you can at least imagine how such councils might function. We need alternative forms of representation that give workers an effective voice, without that voice depending on whether they are able to organise a union.
Are companies that are shifting from a permanent workforce to an increasing reliance on external freelancers adopting a more short-term approach to their business? Why do you think they prefer to embrace that volatility rather than invest in building a stable team?
Yes, that shift in mindset is indeed happening, and I think a big part of it is due to the fact that there has been a decline of what [German sociologist] Wolfgang Streeck refers to as beneficial constraints on employers, where, if you leave it to employers, to firms, they will choose the low road, the easy option, because they are focused on short-term profitability and short-term share price, even though that’s detrimental to them in the long term. Streeck is a German talking about the German experience, where traditionally works councils and trade unions managed to put a constraint on employers being able to follow the low road, so that they had to invest in their workers and provide training. Once you provide training to workers, you have an incentive to provide them with security because you don’t want those workers to leave and you’ve invested a lot in them.
And yes, we’ve seen a real decline in these once-beneficial constraints. As a result, some companies now view the agencies and platforms that supply freelancers as a way to cut labour costs almost instantly, even if doing so undermines their productivity. Part of the reason lies in the 1980s and 1990s, when share prices increasingly became the yardstick by which firms measured their long-term performance. And of course, one way to boost share prices is to reduce labour costs, even if, in practice, that’s not in the company’s best interests. I think part of this story also stems from the decline in capital market regulation and the growing influence of venture capital and investment funds. These Wall Street corporate raiders have come to dictate many management decisions, rather than allowing workplace managers themselves to make such strategic choices.
So, this shift in corporate thinking isn’t something that’s happening now, but predates the internet, originating from this neoliberal obsession with valuing companies by their share price, which fluctuates from day to day.
Yes, it’s undoubtedly a shift that was already under way, marked by the decline of trade unions, the erosion of those once-beneficial constraints, and the growing influence of capital market deregulation. Economist David Weil, who served in the Obama administration, has written about the different ways companies have responded to this fixation on share prices, notably through the fissuring of employment, which refers to the use of temporary employment agencies and self-employed contractors. Then came the 2000s, with the advance of digitalisation, and now the 2020s, with the rise of online labour platforms. These have opened up new ways to extend that fissuring of employment by deploying platform workers and freelancers on a much larger scale, as technology has dramatically reduced the costs of finding, hiring and monitoring workers.
Has there also been a shift in the way workers relate to companies?
I think that, despite everything, people are constantly trying to organise and build communities, and this creates a degree of informal regulation. For example, we see workers compiling their own blacklists of the worst clients and warning others not to work for them, or insisting that no one should take on certain jobs for less than an agreed rate. There’s also strong support for trade unions, even though organising them in this kind of work is difficult. I think much of the frustration people feel about their precarious working conditions is pushing them to look for alternatives that progressive parties have failed to offer. That, in turn, is driving some towards more populist far-right ideas, and leading others to wrongly blame immigration for the decline in their living standards.
In fact, democracies began to deteriorate after the 2008 financial crisis, and perhaps the best way to defend democracy is by ensuring decent working conditions. Do your sociological findings reflect that in any way?
Yes, and I think that’s exactly what we need to do to provide people with a real alternative. I don’t believe that stopping immigration will do anything to improve people’s lives. If we are to provide that alternative, it must come through a system that guarantees democracy in the workplace – through works councils and trade unions – because that’s what will genuinely improve working conditions and provide greater job and life security.
What’s striking is that this would also be in the interests of companies themselves. Yet there are still no specific labour regulations for freelancers. In 2024, the EU approved its Platform Work Directive, but it applies only to platform workers. How should we, as a society, address these regulatory gaps?
I was actually involved in some discussions with EU lawmakers about this directive. I told them it’s a good piece of legislation, but it only covers workers who have been classified as self-employed, not people who are genuinely freelancers. What we need to say, I think, is similar to what we would say in a case of tax evasion: a company can’t simply claim, “Oh, well, they’re self-employed,” or that it has merely subcontracted the work and bears no responsibility for ensuring those workers are paid the minimum wage. No, if a company is creating a type of work, it has a duty to pay at least the minimum wage. That’s what it’s there for: to make sure no one earns below that amount, freelancers included.
So, if you’re a freelancer working through a delivery platform, and it’s not possible for you to earn a minimum wage based on the amount of deliveries you get on average, I think you should have the right to claim that your rates are too low, and that the platform should be required to raise them. One way to make that possible is through the kind of works councils we discussed earlier. It’s about democratising the platforms, but also about ensuring that labour rights genuinely apply to everyone, freelancers included. Anyone doing paid work should see their basic labour rights upheld, including the right to a minimum wage.
How could all of this be guaranteed?
I think labour platforms should have a council elected by the workers, one that is consulted on any changes to the platform, but also has the power to review the prices being set for different tasks. The aim should be to ensure that these rates are high enough to meet the needs of workers and ensure that they receive the minimum wage.
Should the state guarantee that in some way?
Yes, exactly. What needs to happen is that this legal protection should be extended to people who are genuinely self-employed, but who work through platforms.
Finally, what can workers do to make that protection a reality? What would you say to a freelancer who wants to help push things in that direction?
Above all, join a trade union, or build communities of workers, or even new unions. Get involved in a political party, or start a new one if necessary. The point is to push for stronger protections and to give a greater voice to all these self-employed workers.