The Rise of the 1099 Economy

    1099 economy
    Source: New Scientist

    The so called ‘1099 economy’ has been booming in recent years and has given rise to a wealth of job opportunities. This has come with the added benefit of greater freedom to pick and choose the hours people want to work while not being tied down to a contract. As more traditional roles have seen sluggish movement in wage growth year on year, the drive towards becoming a self-employed autonomous worker has never been greater.

    What is the 1099 Economy?

    The 1099 economy refers to work carried out by a self-employed contractor rather than someone who is employed directly by a company. It gets its name from IRS tax form 1099, which is filled out by independent workers and is otherwise known as the ‘gig economy’. It allows workers to pick and choose the hours they want rather than sticking to a rigid schedule, providing greater flexibility and opportunity to them. While it is a global phenomenon, it has particularly taken off in major cities across the U.S.

    Why the rise?

    Almost half of independent workers view their work as more secure than a traditional job. This opinion has risen year on year since 2010, recognizing a change in the culture of the traditional 9-5 job as the main source of income. The continued rise of specialized independent workers is also testament to a drive for better working rates. Traditional jobs have seen a continued stagnation in wage growth over the past 9 years, especially in the United States. The notion is particularly prevalent for skilled professionals who have grasped the autonomy of the 1099 economy with both hands. 

    Editors, project workers, market researchers and their kin can expect to see a competitive market where they can earn far more than in a traditional role. This is often due to the increasing demand for flexible workers and the lack of overheads which comes with this. A recent study in the UK demonstrated that skill rather than employment contract is the most important factor in determining income rate. This suggests that the more skills you have, the better the 1099 economy works for you.

    Another benefit of the 1099 economy is that workers no longer have to worry about losing their healthcare. Around 49% of Americans are provided their healthcare by their employers. This means that if you lose your job, you lose your healthcare, making employees feel trapped in a corporate system of employment and the inevitable fear that comes with it. By being able to take their health insurance rights with them from job to job, self-employed professionals are protecting themselves from this potential fallout and making themselves more secure. 


    Not everyone thinks that the gig economy works, and some labour activists are calling it ‘slave labor’. Legal steps are currently being taken in some parts of the U.S to give independent workers the same rights as traditional workers. The main problem here is short sightedness, because it fails to recognise the changing global economy and attempts to attach outdated employment models to it. Furthermore, while there has been criticism of companies such as Uber, even when substantive earnings are deducted by gas and tolls, the $13 per hour the drivers receive is still more than they could earn as a cab driver. The greater flexibility and rights in this instance still outweigh the more traditional equivalent.


    There is a realisation by governments across the globe that the gig economy transcends working sectors. With pensions and unions eroding, the need for change in how society sees employment must adapt. Economic conditions are changing fundamentally, and we have begun to see tests of a universal basic income. The test cases in Switzerland, Finland and parts of Canada all highlighted the benefits of having a minimum income supplemented by independent employment. Individuals across the political spectrum are seeing the benefits and it’s also being embraced by employees. 

    A further benefit of the 1099 economy for workers is that it gives them the ability to avoid dealing with the traditional Human Resources department. Although HR departments sometimes act in the best interests of employees, they are ultimately dictated to by company management and they put company interests first. In some organizations, HR departments lack transparency and have limited value to the employee. This is despite the fact that HR departments are indirectly paid for by the labor and hard work of employees.

    The risks of setting up a new business are high, and being able to rely on a vast swathe of highly skilled independent workers has driven down the risk for new businesses and given rise to a new kind of entrepreneurship. It means that each independent worker is their own boss and responsible for their own successes, creating greater opportunities for those with a passion for their work. The future looks bright for the 1099 economy, and the world is starting to catch up with it.

    Sanvada LLC are addressing this problem and have found a solution by allowing employees to have the independent freedom of a 1099. Employees are independent contractors, and they enjoy more freedom and independence as it pertains to healthcare specific to Sanvada. A full 100% of proceeds go directly to our independent contractors. This is in contrast to traditional work, where around 20% goes to HR alone, on top of withholdings, taxes, and other fees and expenses.