Most developed countries provide health care through some kind of government system. And plenty of other systems are imaginable -- regional or insurance co-ops (as in the Clintons' ill-fated plan), hospital-based coverage, individual policies, whatever. But nearly all Americans under the age of 65 who have health coverage get it from one source: their employers. (The system dates from World War II, when large manufacturers and unions agreed that the companies would pay for health insurance instead of granting an hourly pay increase, which would have run afoul of wartime wage controls.) Get a job with a company that offers health benefits and you automatically qualify.
Now contrast that happy situation with citizenship in Free Agent Nation, which compared with Employee Nation is like an underdeveloped country. In Free Agent Nation, you're on your own, and you have to line up new work while you're trying to finish the current project. In Free Agent Nation, nobody does anything for you unless you pay for it. You send Social Security and income-tax payments to the government yourself, writing those big, painful checks four times a year. You buy your own office furniture, telephone equipment, fax machine, pens, and stamps. You fix your own computer and make your own travel reservations, collect your own receivables and type your own correspondence, and pay for your own vacation time and holidays. Want a loan? Be prepared to show a few years' worth of tax returns and put up more collateral than you would have to if you could produce a pay stub. "Banks don't like to lend to self-employed people," acknowledges Jay Burchfield, chairman of Trust Company of the Ozarks, in Springfield, Mo. "It isn't that they don't want to provide the service; it's just that the failure rate is that much higher. That's why they have those requirements."
And health insurance! If you have a preexisting condition, forget about it. When Congress passed the Health Insurance Portability and Accountability Act (HIPAA), in 1996, it became easier for most employees to "carry" their insurance coverage from one employer to another, regardless of preexisting conditions. But what if you're going out on your own, entering what is known as the nongroup market? HIPAA "pretty much didn't change anything," says Judith Feder, a health-care specialist who is dean of public policy at Georgetown University. In many states if you do qualify, you'll probably pay the highest rate around (or else settle for limited coverage) -- and, of course, you'll pay it all yourself.
Coping with such matters brings on Excedrin headaches numbers one through 100. There's the wasted time and aggravation, which you'll hear about over and over again if you talk with the self-employed. "I had a computer crash. I was on the phone for about six hours with Dell. At the end of that phone call I just started crying" (Trudy Bourgeois, CEO of her own one-person consulting and training firm). There's bad debt. "It's a crapshoot whether I get paid or not. I have about $5,000 owed me -- and they aren't returning my phone calls" (Jodelle Reed, independent broadcast designer). There's the gnawing anxiety of wondering what you'll do when your current project is complete; there's even the chance of being out on the street, much like an employee a century ago who lost his job. "I moved five times after I lost my job, crashing with friends. In New York City, you can't get an apartment without a W-2" (Ian White, freelance graphic designer and aspiring entrepreneur). The sheer psychological comfort of having a regular job with a company, with all its attendant support and benefits, can hardly be underestimated.
But much of it boils down to outright, quantifiable economic cost, which simply means that you have to earn (and collect) one helluva lot more in self-employment than you do in a job just to come out with the same net income. (See "A Tale of Two Designers," below.)
Add it all up -- the psychological, the practical, the economic -- and you see why it takes guts (or naïveté) to go out on your own. You have to want to do it really, really badly. Did we ever truly believe that large numbers of Americans, however good the economic times, would endure such hardships -- when all they had to do to avoid them was to hold down a steady job?
And yet: 100 years ago it would have been a serious mistake to conclude that people could never work peacefully and productively together in organizations. Today it would be a mistake to conclude that a lot more people won't eventually go out on their own.
The problem with Free Agent Nation never lay in its possibilities. With technology, many tasks really can now be accomplished at home as easily as in a conventional workplace. People's attitudes have changed, too. You're part of a two-earner household? How nice it would be to have one of you -- maybe both -- working from a home office, where you could keep an eye on the kids. We Americans dream of going out on our own, and we'd love it if the barriers weren't quite so high. It's just that as all too many people found out in the 1990s, those barriers aren't crumbling on Internet time. To facilitate a real Free Agent Nation we're going to need big, long-term changes: new kinds of organizations, new kinds of businesses, and a different attitude from government.
Suppose, for example, that there were regional or professional associations of all sorts for solo entrepreneurs. The associations could offer health and other insurance coverage, maybe 401(k) plans, tax-escrow accounts (and help with tax preparation), IT professionals on call to help with your computer -- the list could go on and on. You go out on your own, you join up, and there's an existing network of information and support.
Alternatively, suppose some savvy entrepreneur set up a network of free-agent centers in cities around the country as expanded versions of the temporary office suites that are already widely available. There'd be phone answering and tech support. There'd be a database of resources -- accountants, lawyers and financial professionals, and training centers. There might even be administrative personnel to help you sign up for health insurance and collect your bills, and maybe some kind of credit union to provide loans and income verification.
Buying into any such organization or business arrangement would be costly, to be sure. But people who work on their own for a while might welcome a chance to off-load the hassles of independence in return for more time to spend on income-producing work.
