The 1099 Economy derives its name from IRS form 1099-MISC. This is a tax form sent by U.S. companies to independent contract workers at the end of a tax year.
Tech companies creating services such as Uber or online marketplaces like eBay have spurred a growth in independent income. These companies or services provide income opportunities for more independent-minded workers.
The main reasons for the growth in the independent workforce vary. A lack of traditional job opportunities or the personal freedom to choose work hours are often cited reasons by independent workers.
Others use the opportunities to create additional on-demand income for vacations or holidays. Often simpler than trying to find a part time local job.
Prior to the tech boom, independent workers often were called owner/operators and found in industries such as trucking and delivery. Independent door to door sales was also very common among the group of independent workers.
Critics of the growth in the independent economy point to potential abuses by companies to avoid hiring people with full benefits. Independent contractors are responsible for all taxes, expenses and social benefits such as health insurance.
But a lot of people that have benefited from starting their own jobs or businesses. Recent studies have shown that 55 million independent workers in the U.S. alone contribute over $1 trillion in economic revenue.
OTHER NAMES FOR 1099 ECONOMY
The 1099 Economy is also known as the “sharing economy,” the “gig economy” and the “on-demand economy”.