Bloomberg works with Freelancers' Union to develop benefits

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In a recent press conference, New York's mayor Michael Bloomberg announced that he was working with The Freelancers' Union to develop an unemployment safety net for the nation's growing population of self-employed workers. The proposal would allow freelancers to deposit pre-tax earnings into a fund that they could then draw upon when they aren't working. The mayor also stated that he is working with the New York state legislature to reduce the unincorporated business tax, which would also ease the burden on freelancers.

The current recession is swelling the ranks of the self-employed. One such worker, Luke Kramer, was let go early this year from his job in the senior care and housing industry. In the following weeks, he called headhunters, applied for jobs, and searched endlessly for positions in his field. He joined Monster.com, LinkedIn, and the Ladders, and started to consider whether he needed to retool for a job in another industry, or just needed to lower his expectations to stay in his current career.

Finally, after weeks of fruitlessly searching for work, Kramer decided to hang out his own shingle. He reasoned that, with the Baby Boomers rapidly working their way into old age, the senior care industry was sure to emerge from the current recession stronger than before. What's more, given his years in the field, he was well qualified to help small-scale senior housing and long-term care owners and operators who were looking to lower costs, increase efficiency, and generally improve the quality of their companies.

Kramer's story is hardly unusual; as companies cut payrolls to reduce expenditures, more and more are turning to freelance consultants to pick up the slack. According to a recent survey, almost 42% of companies plan to increase their outsourcing in the near future. In many cases, this decision is based on cost savings, but some companies are also discovering that their options for outsourcing have massively grown, and they can hire freelancers for jobs that previously could only be done in-house.

Of the freelancers polled in the survey, almost a third claimed that they had lost their jobs in the last year. For a comparable number, freelancing now represented their sole source of income.

As more and more workers become freelancers, they are discovering both the joys and the miseries of self-employment. On the bright side, freelancing reduces the daily commute to a matter of feet and allows one to massively cut down on clothing expenses. On the downside, necessities like health insurance, retirement plans, and dental care become a much bigger problem.

Founded in 1995, the Freelancers' Union is designed to help independent workers procure many of the services that their mainstream colleagues take for granted. With discounted health care and tax advice, they are developing a basic safety net for the estimated 30% of the workforce that is self-employed.

Traditionally, the government hasn't paid much attention to its self-employed workers; this has certainly been true of New York's Mayor Bloomberg, whose focus on big business has often made him seem blind to the needs of New Yorkers who aren't fortunate enough to work in the financial district. However, as the economy has transformed so many former Wall Streeters into independent consultants, Bloomberg has begun to reach out to the Freelancers' Union.

While Bloomberg's plan for a freelancers' unemployment benefit won't automatically clear up all the problems facing this sector, it will certainly provide a great deal more security for a large segment of the populace.

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