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Freelancers labor on the fringe of U.S. work force

Folks like Leonard Lamkin are part of an emerging, re-shaped freelance work force.

Lamkin, 58, started doing independent contract work two years ago, after he left his position as head of a Chicago patient-safety advocacy group to care for his ill mother. He's juggled two or three assignments at a time -- including writing grant proposals for food pantries and training a nursing home's staff.

He likes the flexible hours that let him take his mother to the doctor and see his children. And, he said, "I can turn down projects" that aren't interesting.

Still, Lamkin would prefer a full-time job. He has faced long dry spells and is earning less than half his former salary. He had to take $6,000 from his savings to pay bills, dropped his health club membership and can't get health insurance because of a pre-existing condition.

The portion of "contingent workers" in the labor force has increased to 10 percent from 8 percent five years ago and will grow at least at that pace for the next few years, estimates Barry Asin, president of Staffing Industry Analysts, a research group.

Since September, the number of workers placed by temporary-staffing agencies has increased 404,000, making up 68 percent of the 593,000 jobs added by private employers, according to the Bureau of Labor Statistics. Meanwhile, many laid-off workers, often unable to land permanent jobs, have become independent contractors and consultants.

By using more freelancers and consultants, businesses hope to become more nimble and cut costs -- boosting or reducing staffing to meet fluctuating demand or using workers with specialized skills for short-term projects.

Lancaster Advertising of Dallas began using freelancers to cut costs after the 2001 terrorist attacks pummeled the economy and its business. Owner Ken Lancaster found freelance graphic artists, Web designers and illustrators for as little as one-tenth of the cost of traditional employees.

Revenue is down, but profits are up 50 percent. "You never have to fire anybody, and if they don't live up to expectations, you just don't use them again," he said.

The expanding use of contract workers is partly fueled by some Americans who see more flexibility, and even security, in such setups. Many young workers who saw their parents lose jobs "are taking on a free-agent mentality," said Steve Armstrong, general manager of U.S. operations for staffing firm Kelly Services.

Francoise Carre of the University of Massachusetts warns that government safety nets are not set up to support a large share of workers who lack unemployment benefits and health insurance. A Freelancers Union survey of 3,000 of its members found that 18 percent were forced to give up health insurance last year and 39 percent cut back on coverage.

The IRS is seeking unpaid taxes from companies that classify workers as contractors when they function as employees, and a growing number of contractors are suing for unpaid benefits.

Gannett News Service