Article courtesy of Romano Law PLLC
- A new study has crowned Michigan among the most challenging states to be a freelancer.
- According to the data, freelancers in Michigan earn almost 10% less than the national average income.
- The study analyzed various factors to determine the ranking, including each state’s number of self-employed workers, the percentage of startups still active after the first year, and the average monthly expenses on essentials.
A new study has revealed the best and worst locations for freelancers in America.
Business lawyers at Romano Law PLLC analyzed various factors to determine the best locations for freelance workers in the US, including each state’s percentage of employees working from home, the average monthly income after tax, the median monthly expenses on essentials, the percentage of startups active after the first year, and the percentage of workers registered as self-employed.
Based on these factors, each state was then awarded a final score out of 100 to determine the best and worst locations for freelance workers. The states with the highest overall scores represent the top locations for freelancers, which then determined the final ranking.
Michigan’s Findings:
According to the study, Michigan is the ninth-toughest state to be a freelancer in 2025. The state received a final score of 41.14 out of 100. The data reveals that while freelancers across the rest of the US earn an average monthly income of $5,162, freelance workers in Michigan only earn around $4,707 each month – almost 10% less than the national average.
The state is also home to a small percentage of freelancers, with only 8.2% of Michigan’s workforce registering as self-employed, which is almost 15% less than the national average figure of 10.2%. The data reveals that 78.93% of startups in Michigan are active after the first year, which is also slightly lower than the national average rate of 80.64%.
Based on these factors, freelancers in Michigan may be met with a higher number of challenges than they would elsewhere.
Meanwhile, West Virginia has been identified as the worst state for freelancers, receiving a score of just 25.91 out of 100. Only 6.7% of the state’s working population are freelancers, which is the lowest figure in the study and 34% lower than the national average. Only 0.17% of the state’s population has started new businesses, with a total of only 3.84 tech startups per 100,000 of West Virginia’s population.
Other low-ranking states include Kentucky and Rhode Island.
On the other end of the scale, Vermont is crowned as the top hotspot for freelancers, receiving a score of 67.70 out of 100 in the study. With an impressive percentage of 16.2% of its workforce working remotely, Vermont has one of the highest percentages of employees working from home in the US. The state also has a low underemployment rate of just 4.7%. The state is also home to fairly low rent prices at an average of $1,530 per month, making it easier for freelancers without a fixed income.
Domenic Romano, the Managing Partner of Romano Law PLLC, has commented on the study:
“This study reflects how self-employment rates can vary dramatically across the US, with many states not having equal opportunities when it comes to boosting their freelance workforce.
“The research reinforces the fact that there are multiple options to consider before choosing whether to go freelance. Taking time to consider a state’s business success rate and number of coworking spaces can be incredibly worthwhile in the long run.
“The data shows that states with the right mix of affordable living costs and strong infrastructure for remote work create the most suitable environments for freelancers. Vermont’s combination of reasonable housing costs, abundant coworking spaces, and high remote work adoption makes it stand out from other states.
“Location is one of the most important factors for workers to consider before choosing to go freelance. Choosing the right location can significantly improve the number of employment opportunities and can help to cut down on excess living expenses. The substantial differences in income potential, coupled with varying living costs across states, can translate to real financial advantages for those who choose their location wisely.”
The top 10 worst locations for freelancers:
|
State |
Score /100 |
Rank |
|
West Virginia |
25.91 |
1 |
|
Kentucky |
33.22 |
2 |
|
Rhode Island |
36.86 |
3 |
|
Indiana |
38.23 |
4 |
|
Delaware |
39.12 |
5 |
|
Alabama |
39.64 |
6 |
|
Kansas |
40.07 |
7 |
|
Mississippi |
40.18 |
8 |
|
Michigan |
41.14 |
9 |
|
Hawaii |
41.59 |
10 |
The rest of the top 10 ranking:
Florida is crowned as the second-top hotspot for freelance workers, with a score of 63.36 out of 100. The state has the highest percentage of workers starting new businesses, with a score of 0.61%, which is almost 85% higher than the national average rate of 0.33%. Florida also has a strong percentage of startups that are still active after the first year, with an impressive score of 80.49%.
The state also offers a high number of 28.28 coworking spaces per 100,000 residents, making it easier for workers in Florida to work without an office space.
Wyoming is in third place, receiving a score of 61.40 out of 100 in the study. The state is home to one of the highest percentages of freelance workers in the US, with 13.1% of workers in Wyoming registering as self-employed. This is over 28% higher than the national average score of 10.2%.
Wyoming also boasts low cost-of-living expenses, with monthly rent costing residents an average of $1,091, which is 24% lower than the national average cost. Despite this, the state still has one of the highest monthly incomes in the US, with residents earning an average of $6,338 per month after tax.
Colorado is in fourth place, with an overall score of 60.38. With 19.9% of the state’s workers working from home, Colorado has the largest remote working force in the US. The state also has fairly low expense costs, with residents spending an average of $1,453 each month on essentials like utilities and groceries. This makes it easier for freelancers to work in the state without a fixed income.
The top 10 best locations for freelancers:
|
State |
Score /100 |
Rank |
|
Vermont |
67.70 |
1 |
|
Florida |
63.36 |
2 |
|
Wyoming |
61.40 |
3 |
|
Colorado |
60.38 |
4 |
|
Maine |
60.04 |
5 |
|
Montana |
59.26 |
6 |
|
Idaho |
57.32 |
7 |
|
California |
56.46 |
8 |
|
South Dakota |
55.97 |
9 |
|
Arizona |
54.36 |
10 |
Colorado also has the highest number of coworking spaces in the US, with a total of 28.52 coworking spaces per 100,000 residents.
Maine takes the fifth spot in the ranking, with a score of 60.04. According to the data, 0.42% of the state’s population have started new businesses, which is 27% higher than the national average.
Maine also has a high percentage of startups that are still active after the first year, with a strong score of 82.92%. According to the data, this is impressively almost 3% higher than the rest of the US.
Montana is crowned as the sixth-top hotspot for freelancers, receiving a score of 59.26. The state is home to the largest freelance workforce in the US, with 14.9% of Montana’s workers registering as self-employed. This is a staggering 46% higher than the national average, suggesting a large number of employment opportunities for freelancers in the state.
Montana also has a strong percentage of startups that are still active after the first year, with a score of 81.04%.
Idaho is in seventh place, with a score of 57.32. The state has both low monthly rent costs at $1,199 and low monthly expenses at $1,273, making Idaho an accessible location for freelancers without a stable income. Idaho also has a high number of internet cafes in the area, providing freelancers with plenty of working spaces.
Next up is California, with a score of 56.46. The data finds that California is home to the highest number of tech startups in the US, with a total of 33.5 per 100,000 residents. This is a whopping 193% higher than the national average rate of 11.44.
The state also has an impressive 82.56% of startups that are still active after the first year, depicting California’s status as a freelance hotspot. However, the state’s high cost-of-living rates, with residents spending an average of $2,464 on rent each month, places California slightly further down the ranking.
South Dakota is crowned as the ninth-best location for freelancers, with a final score of 55.97. The study finds that South Dakota has a low underemployment rate of 3.6%, suggesting a higher number of employment opportunities. With low rent and housing prices, the state is one of the most stable locations for freelancers.
Arizona rounds off the top 10 ranking, with a score of 54.36. The state has one of the highest percentages of remote workers in the US, with a score of 17.5%. With 0.39% of Arizona’s population starting up new businesses, an impressive 81.65% of startups are still active after the first year.
Other high-ranking states for freelancers include Oregon, Georgia, and Iowa.
Steven Shanker, Partner and Chair of Business Law of Romano Law PLLC, has also commented on the study:
“While choosing the right location can significantly improve the number of employment opportunities, the explosive growth of the gig economy has proven that freelancers need legal protection as well. New York offers legal protections to freelancers through its Freelance Isn’t Free Act. The state law requires businesses that offer work to freelancers worth $800 or more to have written contracts for their work, timely payment, and protection against retaliation.
“That was the first of its kind protection for Freelancers. Businesses in the gig economy must ensure compliance with the Freelance Isn’t Free Act or face stiff penalties, including double damages and attorneys’ fees.”
This information was provided by business lawyers at Romano Law PLLC.
Methodology:
- The study analyzed a total of 14 factors to determine the best and worst locations for freelance workers.
- Each indicator was min-max scaled to a 0-100 range (inverting negative-direction metrics), weighted according to its assigned importance, summed into a final score, and then used to rank the states.
- The raw data for each factor was cleaned, checked, and standardized on the same scale from 0 to 10, where 0 and 10 represent the worst and best values present in the data, to allow for accurate comparison between factors. Factors for which a high score would be negative were subtracted from 10 to invert their scoring.
- A weighting was then assigned to each factor reflecting its importance within the analysis. The factors, their source and their percentage weightings can be found below. Once the weightings were assigned, the total score for the factors was calculated, producing an overall index score out of 100 for each state, upon which the final ranking is based.
- The states with the highest overall scores were then deemed as the best locations for freelance workers.
Factors and Sources:
- Percentage of Workers Self-Employed (2023): US Census Bureau – https://www.census.gov
- Percentage of Workers Self-Employed (Unincorporated Only, 2023) US Census Bureau – https://www.census.gov
- Percentage of Workers Working from Home (2023) – Bureau of Transportation Statistics – https://www.bts.gov
- Avg. Monthly Income After Tax (2024) – Bureau of Economic Analysis – https://www.bea.gov
- Percentage of Population Starting New Businesses (2021) – Kauffman Indicators of Entrepreneurship – https://indicators.kauffman.
org/data-downloads - Percentage of Startups Active After First Year (2021) – Kauffman Indicators of Entrepreneurship – https://indicators.kauffman.
org/data-downloads - No. Coworking Spaces (per 100k) – Foursquare – https://opensource.foursquare.
com/os-places/ - U-6 Underemployment Rate (2024) – US Bureau of Labor Statistics – https://www.bls.gov
- No. Internet Cafes (per 100k) – Foursquare – https://opensource.foursquare.
com/os-places/ - Median House Price (per sq. ft.) – Realtor – https://www.realtor.com/
research/data/ - Avg. Monthly Expenses on Essentials (Excl. Housing) – Bureau of Economic Analysis – https://www.bea.gov
- No. Tech Startups (per 100k) – Foursquare – https://opensource.foursquare.
com/os-places/ - Percentage of Households Renting (2018-2022) – National Low Income Housing Coalition – https://nlihc.org/oor
- Median Monthly Rent Payment (2024, 2 bed) – National Low Income Housing Coalition – https://nlihc.org/oor
The complete ranking: Best to worst locations for freelancers:
|
State |
Score /100 |
|
Vermont |
67.70 |
|
Florida |
63.36 |
|
Wyoming |
61.40 |
|
Colorado |
60.38 |
|
Maine |
60.04 |
|
Montana |
59.26 |
|
Idaho |
57.32 |
|
California |
56.46 |
|
South Dakota |
55.97 |
|
Arizona |
54.36 |
|
Oregon |
53.70 |
|
Georgia |
53.14 |
|
Iowa |
52.41 |
|
Washington |
52.07 |
|
Texas |
52.05 |
|
North Carolina |
52.01 |
|
Nebraska |
51.66 |
|
North Dakota |
51.47 |
|
Tennessee |
51.25 |
|
Connecticut |
50.03 |
|
Minnesota |
49.77 |
|
Oklahoma |
49.13 |
|
New Hampshire |
48.35 |
|
Nevada |
47.59 |
|
Virginia |
47.41 |
|
New York |
47.36 |
|
South Carolina |
46.94 |
|
New Mexico |
45.68 |
|
Massachusetts |
45.51 |
|
Illinois |
45.47 |
|
Missouri |
44.95 |
|
Wisconsin |
44.90 |
|
Maryland |
44.58 |
|
New Jersey |
44.30 |
|
Louisiana |
44.21 |
|
Utah |
44.06 |
|
Arkansas |
43.30 |
|
Pennsylvania |
43.15 |
|
Alaska |
43.14 |
|
Ohio |
42.41 |
|
Hawaii |
41.59 |
|
Michigan |
41.14 |
|
Mississippi |
40.18 |
|
Kansas |
40.07 |
|
Alabama |
39.64 |
|
Delaware |
39.12 |
|
Indiana |
38.23 |
|
Rhode Island |
36.86 |
|
Kentucky |
33.22 |
|
West Virginia |
25.91 |