Demand and supply: Independent Contractors
Companies, Flexibility: Hours, Family, etc., Freelancers, Self-Employed, Services

Supply and Demand: Independent Contractors

Interview with Steven King of Emergent Research and someone who I consider one of the go-to-guys for information about the Freelance economy. During the Interview, Steve state that:

  • 30% of the workforce are Independent Contractors and Freelancers… Many of these people are doing part-time work
  • 60% of Freelancers do this work by choice and 25% are doing it based on necessity
  • People are becoming Independent Contractors because they want autonomy
  • Biggest issues and concerns center on the fact they have no benefits, do not get reimbursed for expenses and always have to find their next gig
  • Freelancers have to be a jack of all trades and wear many hats, but it does help fi they can find an accountant and a lawyer to assist them.
  • More and more companies and developers focus on creating solutions for this market. QuickBooks for the Self-Employed is an example.
  • Both companies and developers need to think about what platforms, such as Intuit or Google, do you want to associate yourself with. More and more developers are focusing on vertical markets and areas where they have experience and expertise.
  • Big companies are relying increasingly on a contingent workforce where they can scale up and down quickly, hiring independent contractors when they need them. The demand-side (Companies:) get a significant cost savings because they save 10%-20% in hiring a part-time worker vs. a full-time employee. Conversely, the Supply Side (the Contractors) gets autonomy and flexibility because they can pick their assignments and when they do these assignments..

Steve finishes the interview with this piece of wisdom:

  • Start part-time and don’t give you your day job
  • Give yourself a financial cushion
  • Show up for work every day (you need to treat it like an everyday job)

 

sharing economy
Being Freelancer, Flexibility: Hours, Family, etc., Freelancers, Income, The American Dream, Uber

Sharing Economy is not part of the American Dream

Guest Post by Steven Hill, a senior fellow with the New America Foundation, is the author of “Raw Deal: How the Uber Economy and Runaway Capitalism Are Screwing American Workers.”  This first appeared on Salon.com and addresses some key issues around the Sharing Economy.

A significant factor in the decline of the quality of jobs in the United States has been employers’ increasing reliance on “non-regular” employees — a growing army of freelancers, temps, contractors, part-timers, day laborers, micro-entrepreneurs, gig-preneurs, solo-preneurs, contingent labor, perma-lancers and perma-temps. It’s practically a new taxonomy for a workforce that has become segmented into a dizzying assortment of labor categories. Even many full-time, professional jobs and occupations are experiencing this precarious shift.

This practice has given rise to the term “1099 economy,” since these employees don’t file W-2 income tax forms like any regular, permanent employee; instead, they file the 1099-MISC form for an IRS classification known as “independent contractor.” The advantage for a business of using 1099 workers over W-2 wage-earners is obvious: an employer usually can lower its labor costs dramatically, often by 30 percent or more, since it is not responsible for a 1099 worker’s health benefits, retirement, unemployment or injured workers compensation, lunch breaks, overtime, disability, paid sick, holiday or vacation leave and more. In addition, contract workers are paid only for the specific number of hours they spend providing labor, which increasingly is being reduced to shorter and shorter “micro-gigs.”

In a sense, employers and employees used to be married to each other, and there was a sense of commitment and a joined destiny. Now, employers just want a bunch of one-night stands with their employees, a promiscuousness that promises to be not only fleeting but destabilizing to the broader macroeconomy. Set to replace the crumbling New Deal society is a darker world in which wealthy and powerful economic elite are collaborating with their political cronies to erect the policy edifice that allows them to mold their proprietary workforce into one composed of a disjointed collection of 1099 employees. Employers have called off the marriage with their employees, preferring a series of on-again, off-again affairs.

This is a direct threat to the nation’s future, as well as to what has been lionized around the world as the “American Dream.”

I’ve experienced the vagaries of this new working life myself. After working for many years in the Washington, D.C.–based think-tank world, the program that I directed lost most of its funding and was shut down shortly thereafter. All my employees, myself included, were laid off. I was promoting my latest book that had been published a few months before, so I surfed that wave for many more months. For a while, all seemed normal and natural, but without realizing it I had stepped off the safe and secure boat of having what is known as a “good job,” with a steady paycheck, secure employment and a comprehensive safety net, into the cold, deep waters of being a freelance journalist.

Suddenly I was responsible for paying for my own health care, arranging for my own IRAs and saving for my own retirement. I also had to pay the employer’s half of the Social Security payroll tax, as well as Medicare — nearly an extra 8 percent deducted from my income. The costs for my health-care premiums zoomed out of sight, since I was no longer part of a large health-care pool that could negotiate favorable rates.

But that’s not all. Suddenly not only was the pay per article or lecture not particularly lucrative, but I didn’t get paid for those many hours in which I had to query the editors for the next article or lecture, or conduct research and interviews. It was as if I had become an assembly line worker who was paid on a per-piece rate; the “extraneous” parts of my working day — rest and bathroom breaks, staff meetings or time with co-workers at the water cooler, usually paid time in a “good” job — had been stripped to the bone. Not to mention I no longer had paid vacations, sick days, holidays, nor could I benefit from unemployment or injured workers compensation. Instead of receiving a paycheck from a single employer, now I had to track my many and varied sources of income, making sure that unscrupulous editors didn’t stiff me.

In short, I had to juggle, juggle, juggle, while simultaneously running uphill — my life had been upended in ways that I had never anticipated. And I began discovering that I was not alone. Many other friends and colleagues — including Pulitzer Prize-winning journalists, professionals and intellectuals, as well as many friends in pink-, white- and blue-collar jobs — also had become 1099 workers, tumbleweeds adrift in the labor market. They found themselves increasingly faced with similar challenges, each in his or her own profession, industry or trade. In short, we had entered the world of what is known as “precarious” work, most of us wholly unprepared.

Not to worry. The sharing economy visionaries — who like Dr. Pangloss in Voltaire’s Candide always see “the best of all possible worlds” — had a plan in place for us. We could “monetize” our assets — rent out our house, our car, our labor, our driveway, our spare drill and other personal possessions — using any number of brokerage websites and mobile apps like TaskRabbit, Airbnb, SnapGoods, the ride-sharing companies Uber and Lyft, and more.

This is the new economy: contracted, freelanced, “shared,” automated, Uber-ized, “1099-ed.” In essence, the purveyors of the new economy are forging an economic system in which those with money will be able to use faceless, anonymous interactions via brokerage websites and mobile apps to hire those without money by forcing an online bidding war to see who will charge the least for their labor, or to rent out their home, their car, or other personal property.

Websites like Uber, Elance-Upwork, TaskRabbit, Airbnb and others are taking the Amazon/eBay model the next logical step. They benefit from an aura that seems to combine convenience with a patina of revolution; convenience as revolution. The idea of a “sharing” economy sounds so groovy — environmentally correct, politically neutral, anti-consumerist and all of it wrapped in the warm, fuzzy vocabulary of “sharing.” The vision has a utopian spin that is incredibly seductive in a world where both government and big business have let us down by leading us into the biggest economic crash since the Great Depression.

But the “sharing” economy’s app- and Web-based technologies have made it so incredibly easy to hire freelancers, temps, contractors and part-timers, why won’t every employer eventually lay off all its regular, W-2 employees and hire 1099 workers? Any business owner would be foolish not to, as he or she watches their competitors shave their labor costs by 30 percent (by escaping having to pay for an employee’s safety net and other benefits).

Outsourcing to these 1099 workers has become the preferred method for America’s business leaders to cut costs and maximize profits. One new economy booster clarified employers’ new strategy: “Companies today want a workforce they can switch on and off as needed” — like one can turn off a faucet or a radio.

Indeed, the so-called “new” economy looks an awful lot like the old, pre-New Deal economy – with “jobs” amounting to a series of low-paid micro-gigs and piece work, offering little empowerment for average workers, families or communities. We’re losing decades of progress, apparently for no other reason than because these on-demand companies conduct their business over the Internet and apps, somehow that makes them “special.” Technology has been granted a privileged and indulged place where the usual rules, laws and policies often are not applied.

If that practice becomes too widespread, you can say goodbye to the good jobs that have supported American families, goodbye to the middle class and say adios to the way of life that made the United States the leading power of the world.

Being Freelancer, Co-Working, Flexibility: Hours, Family, etc., Freelancers, Future of Work, On Your Own, Self-Employed

Coworking: Footloose and Freelancey Free

To be Freelance Free —

Coworking is a growing trend among freelancers, entrepreneurs and small businesses. The idea is simple: individuals work in the same environment but don’t necessarily work together. The emphasis is on community. Coworking spaces not only allow freelancers and entrepreneurs to have a space outside of their home office or local Starbucks but also gives them the opportunity to network with others in the same industry. It is part of the new shared economy focus.

Coworking is a becoming more and more popular, especially amongst technology freelancers and early startups. Most co-workers tend to be younger, averaging about 35  years old. 78% are under 40 years old. More than half are freelancers and only 20% employ other workers. While coworking has primarily been used by technology companies, it has evolved over the past few years. Freelancers and other industries, such as fashion and food, are also using co-working spaces. Not surprisingly, most co-working spaces consists of creative industries, writers, designers and digital media specialists, such as web developers or programmers. Following these two industries is marketing, such as public relations.

While co-working has been around for years, it is especially catching on now for a number of reasons.

    1. Interaction with others: The social experience: It’s challenging to work at home everyday. 91% said coworking helps them with their business by having daily interactions with others. Whether business related or not, working and communicating with others in the same space can boost productivity.
    2. Identify other work opportunities: The networking opportunities in a co-working are abundant. It is a great place to interact with other freelancers and entrepreneurs in the same industry.
    3. Have a physical office space: Many freelancers and entrepreneurs work from home or from a local coffee shop. While these options are free and flexible, it poses certain limitations. Joining a co-working space allows entrepreneurs and small businesses to gather for team meetings or meet with clients. Moving away from your home office from time to time also helps avoid typical distractions, like watching TV or taking an extended break on the couch.
    4. Improve skills: More and more co-working offer sponsor workshops, online training, and member events included these in the cost of membership. It’s a great way to meet other entrepreneurs and also learn about industry trends.
    5. Save money: Coworking enables companies to save money because they don’t have to make a long term commitment to a lease or spend a lot of money on expensive office equipment. Coworking spaces have all the essentials of a typical office, including high-speed internet and conferencing equipment.
    6. Meet deadlines: 64% of people said working in a co-working environment enables them to meet deadlines on time. This is probably the result of watching other dedicated workers around them. 68% said they could also focus better on their work in a co-working environment.
    7. Share knowledge and experience: Co-working enables you to seek out help from others and ties to the trend of the sharing economy. Some spaces are catering to specific groups, such as designers. There’s also been a rapid increase in content and professional development such as content, workshops, etc. Many are even offering to connect participants with domain experts who offer mentoring, advice, etc.

Coworking is not just a shared office space but a community with a culture its own. There’s a debate about whether or not it is a fad, but considering 40% of the workforce are becoming freelancers, it will probably continue to be attractive to entrepreneurs who often face the issue of working on their own. It’s important to note that it is not about a physical space, but a community approach.

Coworking is often confused with Corporate Business Centers, which often target business travelers, mobile workers,  and corporate businesses. They are often more expensive, offer conference rooms, provide administrative assistants and more, although the lines between these two are getting blurred. One of the largest, Regus, is usually associated with big corporations, lawyers, financial consultants, formal environments, and the like. So when it introduced its two new brands, Think Korra and Spaces, Regus had to separate itself from them. These new brands target a younger entrepreneur,  not their usual share of clients. Regus, like many other companies are starting to seem, know that younger generations depend on the more affordable and community oriented co-working spaces.

Coworking spaces are becoming more than just an office space to get some work done. It’s a valuable opportunity for entrepreneurs and freelancers to learn and network from others in the same boat. While it’s a trend, it’s one that here to stay for awhile. The market is becoming more and more saturated with co-working spaces but as the number of freelancers grow in the coming years, the demand for these spaces will only increase as well. The most important aspect to consider when joining a co-working space is community. It’s not just a place with a desk to work on it. As a freelancer or entrepreneur, find the space that is most geared toward what you do. You’ll never know who you’ll meet and the opportunities you’ll come across working in the same spaces as others.