Independent contractors a boon for U.S. economy

The American economy is shifting. In the past decade, there has been a significant increase in the number of business owners who are not wage and salary employees, but instead independent contractors. Since the “end” of the recession, there has been an increase of more than 1.8 million sole proprietors.

Across Nevada, we continue to see high unemployment. That is why thousands of people over the past few years have decided to open their own businesses and venture out as independent contractors. In 2012, about 80 percent of businesses in Nevada had no employees. And the trend continues. Over the past few months I’ve met software engineers, graphic designers, event planners, package deliverymen and business consultants who have made the choice to venture out on their own. They are contributing to our economy, creating a job for themselves, and in some cases creating jobs for others.

But when you are independent, who is looking out for your welfare in the political world?

Recently a national coalition, It’s My Business (www.itsmybusiness.com) launched to give a voice to the millions of people like me who have decided to be their own boss. At a time when the workforce is changing, it is crucial to raise awareness about the contributions independent contractors make to our economy.

Independent contractors are virtually everywhere. There are more than 10 million of them across the United States — more than 7 percent of the total workforce. They are essential to our economy, accounting for $473 billion in personal income, or $1 of every $10 earned in the nation.

More and more women are finding that the independent contractor model works for them and their families. Females comprise about 35 percent of all independent contractors in the United States, and that number continues to grow.

I am one of those women. When I got divorced years ago, I was faced with needing to make a living for my son and I. I chose to become an independent contractor because it let me set my own schedule and structure the cadence of my business to be in step with my life. It allowed me to better serve customers while still making it to my son’s activities. That life choice has provided a great life for me, and for my son, who is now in college.

Beyond the individual advantages for independent contractors, many are expanding their independent contractor status into small businesses that create jobs for others. According to the U.S. Commerce Department, small companies — many of them arising out of independent contracting beginnings — create three out of every four new jobs. They are crucial to job growth and economic recovery.

Yet despite their crucial role in our economy, some states are making it difficult for independent contractors to grow and prosper. The economic survival of these “self-starters” is being jeopardized by legislation and regulation at the national level, as well as here in Nevada.

In the 2011 Nevada legislative session, two bills that sought to identify and penalize employers who misuse independent contractors were passed by the Democrat-controlled Legislature, but were vetoed by Gov. Brian Sandoval. Those same two bills returned in the 2013 session, but they failed to get hearings this time, thanks in part to the fervor raised by supporters of independent contracting during the 2011 session.

Nevada already has adequate laws that penalize employers who wrongly classify an employee as an independent contractor. But that doesn’t seem to stop those who would prefer to see this business model banned. Across the United States, more than half the states have either approved or proposed laws restricting independent contracting arrangements. Several states have formed task forces to increase audits and prosecutions of independent contractors and their clients.

There’s no question that independent contractors should obey all laws and pay taxes as required. But broad-scale attempts to reclassify independent contractors and turn them into company employees is harmful to those who play by the rules.

That is why I joined It’s My Business. I am joining with others to protect the right of independent contractors to choose a way of life that works best for them. Visit the website at www.itsmybusiness.com to learn more.

Our entrepreneurial freedom makes our economy the envy of the world. The hardworking people of Nevada should be free to pursue jobs that fit their needs and their lifestyle, especially when their prosperity benefits us all.

Alice Heiman owns Alice Heiman LLC, a Nevada-based sales consulting company (www.AliceHeiman.com).