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In the age of Uber and companies like it, almost anyone can become “self-employed” or an independent contractor. City Paper looked at the lives of some of these “1099 workers” in an issue we published last month, which you can read here.
Still, an analysis released today by D.C.’s Office of Revenue Analysis suggests the District may not have a bustling “gig economy,” at least as far as the number of people who identify themselves as “self-employed in an unincorporated business they own” (that is, those who receive a 1099 IRS form and pay self-employment taxes) indicates.
The analysis, based on tax filings and U.S. Census data from the past decade, shows that while the number of people who pay self-employment taxes rose 36 percent from 2006 to 2014, the overall share of such individuals has plateaued around 14 percent of all District tax filers since 2010. According to ORA Director of Fiscal and Legislative Analysis Yesim Sayin Taylor, this may have “less to do with changes in the underlying economy and more to do with changes in tax policy”: The volume of heads of households who pay self-employment taxes has grown since D.C. began offering Earned Income credits.
The effect of those credits, the analysis posits, is that low-income and single parents were more likely to report self-employment income:
Meanwhile, the Census survey data ORA cites illustrates that both the number and share of “self-employed” people has declined overall since 2005. Last year, only 2.4 percent of residents 16 years of age and above indicated they were mainly self-employed, a decline of one percentage point from 2012, after the economic recession. The data shows that the share of such individuals has gone down nationwide:
As for demographics, ORA reports that D.C.’s self-employed are some of the most educated in the U.S.: about 58 percent have earned an advanced degree, which is more than four times the entire country’s share. Census data (distinct from the IRS tax filings) shows the share of all D.C. residents who say they are self-employed barely fluctuated between four and seven percent between 2010 and 2014.
“It is possible that the District’s gig workers—the Uber drivers, the Amazon flex folks, the Taskrabbits—are not District residents, just like many District workers who receive minimum wage do not live in the District,” Taylor says. “It is [also] possible that some workers do not fully report their income because they do not realize that they must report earnings from Etsy, Sittercity, or airbnb.”
You’re not alone, D.C. dog walkers, but your pack may not be as big as some may think.
Photo by Darrow Montgomery. Graphs via District, Measured
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