The employment law firm Littler Mendelson released a report last year called “The Emerging New Workforce,” which predicted that 50 percent of new, post-recession jobs will be contract positions, said MSNBC.com. Monster.com  saw a 46 percent increase in contract job listings in March, according to MSNBC.

Companies save money by hiring on a contract basis, but workers lose the security of a permanent job, including health benefits, paid sick and vacation days, and company contributions to retirement savings accounts.

Faced with this new economic reality, long-term freelance workers should begin thinking of themselves as small businesses. Some issues to consider : How do you formalize a small business? What legal issues are involved? How do you market yourself or organize a bookkeeping system? Where can you find insurance?

Starting a small business takes time and effort but can be well worth it in the long run.

“You are in that period where the recession is over but you don’t have job growth. And until we get job growth, nobody is going to believe the recession is over,” John Canally, an economist for LPL Financial in Boston, said in a Wall Street Journal article.

The unemployment rate tops 10 percent in 14 states, according to the Labor Department.

While the business climate is getting better, the report also noted that the commercial real estate market is still weak. Regional banks haven’t freed up business lending, so many empty storefronts remain vacant.

Cities with federal projects funded by the federal stimulus bill, such as Cleveland, Chicago, Minneapolis and Dallas, are the only areas reporting an increase in commercial real estate activity, according to the Wall Street Journal.

Small businesses complain that mandatory wage hikes hurt their bottom lines, forcing them to raise prices or impose cost-cutting measures, including layoffs. But the National Federation of Independent Business said that most businesses pay more than minimum wage to attract the best workers, and 21 states already have minimum wage requirements above the federal level, according to MSNBC.com.

While economists believe the wage hike will have little effect on the economy overall, teens and young adults, as well as workers in rural or poor areas, will likely suffer the most when employers make hiring decisions, said MSNBC.com.

Phyllis Knueven, who owns a grocery store in Illinois that employs several teens, told MSNBC.com she could hire more experienced and flexible adult workers for $8 an hour.

Teens and young adults have already been hit hard by the recession; the June unemployment rate was 24 percent for 16- to 19-year-olds and 15.2 percent for 20- to 24-year-olds.

These business owners say they are moving past short-term thinking about the economy. Donn Flipse, owner of Field of Flowers, floral superstores in Florida, told the AP, “Business is going to get better, so I’m going to do something to position myself to do even better than my competition.”

The real estate market around the country has been especially hard hit by the recession, putting many small companies out of business. But some survivors are looking toward an upswing in the housing market.

Kathy Braddock, co-founder of Charles Rutenberg Realty in New York City, said she’s readying for the next boom in a city where real estate is king. She told the AP the company is improving technology so it can take on more agents – preparing to go from 250 to 1,000.

Lorrie Thomas, who runs an Internet marketing training firm in California, started implementing changes to her business model early in 2008 and launched a new Web site this March.

“That’s the best part, to do it now,” Thomas told the AP. “Other companies, when the boom kicks back in, they’re going to start doing what I did a year ago.”