The Self-Employed as a Political Constituency

Will 3-D printers swell the ranks of self-employed manufacturers?

Will 3-D printers swell the ranks of self-employed manufacturers? Image credit: CNN

The maker movement is transforming the American economic landscape. The number of people who make a self-employed living making stuff is still small — almost imperceptible in a U.S. labor market of 160 million — but it is growing.

In 2014 more than 350,000 manufacturing establishments in the U.S. had no employee other than the owner, up almost 17% over ten years, according to Commerce Department data reported by the Wall Street Journal. By comparison, the 293,000 establishments with employees had experienced a 12% decline in number over the same period. Overall, there are roughly 12 million manufacturing jobs in the U.S.

The boom in self-employed manufacturing is most pronounced in the “food” category, but also notable in chemicals (including soaps and perfumes), transportation, leather, and beverages & tobacco.

I expect the movement to gain momentum as the revolt against mass, industrial-era standardization gives way to mass customization. Technologies such as Computer Aided Design and 3-D printers continue to gain in capability and come down in price, making them available to almost anyone. Many colleges have 3-D printers on campuses, and students are learning how to use them. Meanwhile, just as the Miller-Budweiser beer duopoly has given way to the craft beer revolution — the biggest advertising budgets in the country could not halt that consumer trend — we are seeing the revival of artisinal foods, beverages, and craft products.

The proliferation of self-employed, small-scale manufacturers is part of a larger trend toward the so-called “gig” economy. So far, the needs and aspirations of makers, hackers, craftsmen and free-lancers have gone mostly unrecognized by the political establishment. These self-employed workers are even more politically invisible than small business. They are unorganized politically. They don’t have trade associations, they don’t hire lobbyists, and they don’t donate money to politicians. Indeed, the only politician I can think of who takes them seriously is Sen. Mark Warner, D-Virginia. While the senator has performed a valuable service in highlighting the group and its unique needs, his interest in the topic does not appear to be widely shared, and he can cite few tangible accomplishments yet.

Making a living as a free-lance writer and blog publisher for the past 14 years, I feel a strong affinity for this group. In Virginia, there are hundreds of thousands of us. And as consumer tastes continue to shift from standardized products and services to personalized products and services — our numbers will grow.

We are the petite bourgeoisie. We are noted for our stubborn independence and our ornery attitude toward our “betters” who would tell us what to do. In my view (which, I concede, may not be universally shared), we don’t seek special treatment. We don’t want subsidies, tax breaks or special privileges. We just want a level playing field.

The most important legislative priority for self-employed workers is to gain more control over our health care insurance and retirement plans. Our health insurance should enjoy the same tax status as health plans provided by corporations and other major employers. Our pension vehicles should be portable as we move back and forth between conventional employment and self employment. Oh, and it wouldn’t hurt to keep a lid on taxes.

As I scan the political economy of Virginia, I don’t see anyone (other than Warner) representing the interests of the self-employed. Neither Democrats nor Republicans, beholden as they are to established corporate and bureaucratic interests, provide a natural home for us.

The Libertarian Party could become that home if it moved beyond articulating abstract principles to applying those principles to real-world problems. Indeed, if the Libertarian Party has a natural constituency, it would be the free-lancers and small businesses whose interests are routinely subordinated to those of better organized, more vocal groups who turn to the government for everything. As Libertarians run for office, they would do well to cultivate the large and growing ranks of the self-employed.

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4 responses to “The Self-Employed as a Political Constituency

  1. just curious – are self-employed and independent contractors the same thing?

    because I’d be surprised if independent contractors as a group – which I think what Warner is talking about – would not be burgeoning.

    and good to recognize that employer-provided health insurance is really government-favored insurance – that is not only tax-free for Federal and State but also FICA – which is what social security and Medicare are funded from.

    Independent contractors, without Obamacare, do not enjoy the same benefits as employer-provided. For instance, under EP – everyone pays the same price no matter if they are young or old , sick or healthy – the pool cross-subsidizes all members of the pool.

    Now , if that is not “un-libertarian” what is! and if you expanded that benefit to workers who do not have EP – then you’d have the govt involved in forcing insurers to not only not deny pre-existing conditions but require every insured not pay more than others just like employer-provided is now – that’s the govt directly involved in everyone’s health insurance. How Libertarian is that???

    Like I had opined earlier -folks who say they subscribe to Libertarian “principles” but at the same time – support the govt involved in health insurance – no not what they say!! or if they do – it totally violates the core principles of Libertarian-ism!

    the fundamental question is – if one proclaims they are Libertarian – what role should govt have in health insurance?

  2. LG, I think you expect too much consistency from this “Libertarian” talk. It seems the notion Jim is talking about is a more hands-off approach to business regulation but combined with a robust social safety net — pragmatic conservatism, rather than ideologically-pure, minimalist-government, isolationist, Libertarianism. The latter is my problem with the Libertarian Party, which has been dominated by the purists, the groupie ideologues, not the pragmatists, and it’s why they never seem to catch on with a big popular following. This past election they nevertheless put two experienced former governors at the head of their ticket and I was hoping, given the other party nominees, we might see a big enough protest vote to bump the Libertarian popular vote up over the 10% level required to win federal funding in the next election cycle — but people won’t cast a toss-away protest vote when they feel their vote might make a difference in choosing the winner, and that’s what happened this time. Meanwhile, Jim has put his finger on a big, long-standing problem with the deductibility of personal as opposed to employer-supplied health insurance. The government created this distinction after WWII by encouraging employers to offer health benefits as employee compensation, deductible to the employer, whereas the self employed got no such tax break. And now, the self-financed employed are the growingest, most innovative, part of our workforce. Yes there are ways to structure a sole proprietorship as a small business to accomplish the same thing and the ACA also helped but these are just workarounds. Yes there are Libertarians who bravely want to scrap the entire income tax system, or the government’s entire role in healthcare, rather than fix either, but that’s not going to happen. I’m with Jim here, we need to elect more like Senator Warner with practical solutions to these problems for the self-employed — whatever party label they run under. And right now, neither the Dems nor the Repubs is being very practical.

  3. I, too, have been mostly self-employed since 2003. The good news is freedom and being able to do your own planning and go after new things.

    The bad news is dealing with essentials such as health insurance. In my line of work, another problem is doing well on paper when the money owed you isn’t in your bank account and may not be for weeks on end. You’re not ahead in that case. Why should you carry a client who is in essence forcing you to loan him your brains, experience, internet, electricity, etc?

    • Yeah, I hate it when clients use their free-lancers as a piggy bank. They manage their payables and receivables to earn an extra percentage point on the cash by putting vendors on 60- to 90-day payment schedules. Maybe someone should put their paychecks on 60- to 90 payment schedules! Or maybe we’ll give them their work 60 days after it’s due!

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