Plight of freelancers a key economic issue in mayor's race
Freelancers play a major role in New York City’s economy. Mayor Michael Bloomberg and his challenger City Comptroller Bill Thompson, are both trying to woo freelancers with promises of tax breaks and help for the unemployed.
Both candidates have said that the instability and economic hardship facing independent workers—that is, freelancers, consultants, independent contractors, temps, part-timers and the self-employed—are a priority this year.
Bloomberg, who made his fortune as the founder of Bloomberg LP and is running for a third term, has focused on tax adjustments for independent workers.
Thompson, a lifelong city resident and longtime public servant, is proposing measures that would make it easier for freelancers to live and work in New York City by changing zoning regulations to allow freelancers and contractors to work from home and making it easier for them to collect wages.
Independent workers, who currently make up roughly 15 percent of New York City’s workforce, have represented two-thirds of the city’s job growth since 1975, according to a 2007 study by Thompson’s comptroller’s office.
In 2007, the City Council enacted a tax credit that granted independent workers up to $5,000 in yearly savings. Bloomberg pushed for the measure.
Then, this spring, the council passed an exemption that was proposed by Bloomberg and freed the city’s independent workers from paying the Unincorporated Business Tax, an additional levy of up to 4 percent of yearly revenue. The elimination of the tax, whose goal was to target businesses trying to evade taxes, means up to $3,400 in yearly savings for independent workers.
Bloomberg has said that he plans to continue cutting taxes for independent workers. Because they pay into Social Security as both the employer and the employee, the self-employed currently pay double the rate of traditional employees, experts say.
Plus,according to a 2007 study, independent workers face an average of two-and-a-half months of unemployment per year, an estimate likely to be greater this year in light of the recession. In response, Bloomberg has pledged to work out a “safety net” for self-employed New Yorkers, who aren’t eligible for unemployment benefits.
“One way this could work is to create a fund that workers would contribute to and that would also offer freelancers some level of tax benefits,” Bloomberg said in a speech this past March.
The Freelancers Union, an advocacy group representing 75,000 of the city’s independent workers, recently endorsed Bloomberg’s campaign and says affordable healthcare, fair taxation and unemployment insurance are items that it would like to see addressed by the elected candidate.
“We need a mayor that puts freelancers’ issues at the top of the agenda,” said Sara Horowitz, executive director of the Freelancers Union. And by “making independent workers a priority of his administration,” Bloomberg has done just that, she said.
Thompson, on the other hand, has said it is important that city officials increase the threshold at which independent workers must file an Unincorporated Business Tax form. He wants the threshold, currently $100,000, indexed for inflation, according to Thompson's campaign Web site.
In his economic plan, Thompson said that the estimated 79,000 independent workers in the city’s creative industries – 29 percent of these fields’ workforces – are of growing importance to the city’s economic diversity.
“As Mayor, I will work to develop the resources, benefits, and incentives necessary to support and nurture self-employment—for the good of our city and for the good of our city’s independent workers,” he wrote in a mayoral candidate questionnaire from Citizens Union, a government watchdog group.
Thompson highlighted in his economic plan measures that would remove some of the hurdles the city’s 375,000 freelancers face.
The comptroller advocated changing state law to allow independent workers to buy into the state’s unemployment insurance program. He also supports the creation of special savings accounts that would allow freelancers to make pre-tax contributions that they could withdraw when unemployed.
To help independent workers collect the wages owed them, Thompson backs increasing the jurisdiction of small claims courts to $25,000, up from $6,000. It is often easier and cheaper to file suits in small claims court. He also supports creating a state Department of Labor position to work exclusively on freelancers’ unpaid wage claims.
And he wants to make it easier for independent workers to find places to work. The comptroller advocates creating non-profit affordable workspaces and changing the zoning rules to make it legal for freelancers to work from home.
“And independent workers – freelancers – are a fast-expanding part of our workforce,” Thompson said. “They are especially important to the creative industries. By helping them we help ensure that New York retains its creative vitality and uniqueness.”
