Freelancers Freelancing Their Way Into Jeopardy

Health insurance. 401Ks. Unemployment benefits. Those are the kinds of benefits our parents entered the workforce expecting. But us? With the under-30 unemployment rate jumping up to 11%, many of us who are struggling to find paid work don’t have the luxury of ruling out jobs that come without benefits. The 2012 workplace is a different creature from the one our parents encountered in the ’60s and ’70s. Gone are the days of working at the same company for 25 years. Today, nearly a third of all workers are freelancers. They’re temps, contract workers, self-employed workers and part-time employees and they’re becoming the norm.

via: studio sweet studio

Working as a so-called “contingency worker” has is perks. You get a certain degree of flexibility, the opportunity to get your hands dirty in a variety of projects, more creative control over your work, and the alluring possibility of earning beaucoup dollars. But while the highs are high, the lows are abysmal. Contingency workers typically go without benefits that full-time employees take for granted. Paid sicks days and vacations, employer-sponsored health insurance, protection against discrimination, the guarantee of being paid on time and retirement savings plans all go out the window when you work from gig to gig.

The downfalls of freelancing are precisely why contract work has become so popular in our modern economy. As we’ve moved from an industrial to a knowledge-based economy, companies have struggled to keep up with the demands of the market. In the knowledge economy, employees become the single greatest resource that a company has. This total reliance on human capital means that firms are faced with the challenge of making a profit while still serving the needs of their workers. Many companies have turned to contingency workers as a sort of bargain with themselves — by hiring workers on a contract basis, they extricate themselves from obligations because the people they hire are not their people. And as more companies turn to a contingency worker model, the competition for jobs only grows, ensuring that companies can continue to temporarily hire high-quality workers for less than a salaried employee.

In a word, freelance workers are vulnerable. They work many hours each week with no guarantee that next month will bring a job their way. Because temporary work makes it harder to qualify for a loan, workers have trouble financing education for themselves or their children and have more trouble making large investments or buying homes, which makes making a living harder than ever. Call it “The American Dream” or call it a fantasy, but building wealth is essential to two things that we desperately need: upward social mobility and a political voice.

If the workplace continues to move into coffee shops and basements, something’s got to give. We currently organize our social and economic safety nets around one long-term job — an arrangement that was created in the 1930’s with the New Deal. With all the changes in the workplace — including technology, new supply chains, and more diversity — it’s time for some restructuring. The Freelancers Union, a group that advocates for the rights of contincency workers, supports what they call “new mutualism.” New mutualism looks at the changes in the workplace and says “I can deal with that.” It sees the growth of freelancing as an opportunity for creativity and entrepreneurship to flourish. Technological innovation becomes a way to create communities and connect people with complimentary skills and needs. In a way, it’s not all that different from what we do here at Autostraddle.

But what about those problems like health insurance and retirement that never seem to go away? Rachel Horowitz of the FU (I don’t think they call themselves this, but they should consider it) thinks that more health care reform could help level the playing field so that Consumer Owned and Operated Plans benefit both freelancers and the companies that employ them. Mike Paolucci, CEO of a company that connectes freelancers and companies, believes that universal healthcare is the answer. He argues that it could “lead to a more mobile society” by allowing freelancers to focus on their current contract and freeing the economy from the strain felt when thousands of contingent employees are laid off in times of economic downturn. The Freelancers Union suggests that we start by asking the government to count independent workers, something it hasn’t done since 2005. With a good set of stats about what’s going on, we can rethink the institutions we’ve created so that they’re more in line with the needs of today’s workers.

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Laura is a tiny girl who wishes she were a superhero. She likes talking to her grandma on the phone and making things with her hands. Strengths include an impressive knowledge of Harry Potter, the ability to apply sociology to everything under the sun, and a knack for haggling for groceries in Spanish. Weaknesses: Chick-fil-a, her triceps, girls in glasses, and the subjunctive mood. Follow the vagabond adventures of Laura and her bike on twitter [@laurrrrita].

Laura has written 325 articles for us.

20 Comments

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    Love this article on so many levels.
    The thing about freelancing is… if we do this long enough, and network with the right people and do good things, shouldnt something permanent possibly come from it? Or at least develop into maybe your own business? I just freelanced for about 5 years almost, but then came up on an opportunity of a lifetime…. I hope and wish it works out like that for all of us right now.

    If not being able to find something that provides benefits and whatnot, at least maybe developing your own small business. Maybe that we we can chop up some of those tax breaks. LoL

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    Most of my work is freelance and completely “specialized”. The writers strike of 2007-2008 nearly ended my career. I’m not a writer, but I depend mostly on them for what I do, and those were the longest 3 months of my life. It nearly crippled me, but also changed how I save and spend. I try not to think to much about the “what ifs” and when I’m having a particularly good month, I don’t allow myself to alter from “the plan” because I know next month might be my worst. Ah the joys of self employment.

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        I had to start a corp to do the freelance work I do. Which was a pain and involves mind numbing paperwork BUT since I can also run other projects from that and pay myself from the corp it’s easier on me with taxes so I don’t get double taxed. This is when that free legal advise from the nice folks in one of these gov buildings in dt chi-town (I think it’s the Daley Center for all you chi-townies) is handy.

        To really make this work you need professional help-lawyer and accountant. It also allows you to do a lot of things through the corporation(s) ie-all services related to your work tax deductible (cell phone, internet, office space, supplies etc), pay for your education as a business expense, even pay some of your rent or set up a corp to buy that house or condo and rent it from the company. Once your company has a good credit history then it can do all of that stuff for you including retirement.

        Most of us don’t know nearly enough about business and the law to effectively use it to our advantage. And it’s sad because these companies don’t care about you. The company I get my contracts from has figured out how to get around paying minimum wage. How ridic is that?

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    marriage equality is also super relevant to this discussion. in straight couples, often the wife can freelance because husband has benefits, or vice versa. not so for many same-sex couples.

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    As a semi-freelancer currently semi-freelancing in a queer coffee shop surrounded by other freelancers hammering away on keyboards while attempting to feel engaged in society based on our location, I feel this.

    I feel like I’m in a chilly paradise as the peculiar February rain pours down on Canadian streets beyond the window. But then again, if my current bronchitis turns into something more nefarious, I have absolutely no worries about not being treated by the luck of where I was born.

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    i’ve been freelancing for 3 of the 5 years i’ve been out of school. My parents ask when i see them, cautiously ‘do you have health insurance yet?’
    and while i love making my own schedule, i love that i can work a different place every day, and i love what i do, it can be exhausting to be always looking for work.
    but i work in theatre. the idea of a secure job is something that doesn’t really come with this business. (i still love it)

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    Full time employees don’t take the benefits for granted. Actually, they often end up taking a smaller salary than they would otherwise just to get the benefits. And people will stay in a job they don’t like just because they don’t want to lose their benefits.

    What I’m getting at is tying health insurance to employment is just a bad idea for everyone. And really, it doesn’t make sense. You don’t even get to choose the provider for yourself. You have to go with whatever provider your employer has picked. What if your employer chose what kind of car you could buy or your cell phone carrier?

    We should all just be able to buy health insurance at a reasonable rate completely independent of our employer…or union for that matter.

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      grrrl tell me about it. i had to stop seeing a therapist once because my insurance up and decided to make her practice our of coverage. and lexapro, my medicine of choice? just DOUBLED in price because they decided as of January 1st that it’s no longer a preferred drug. i’d love to see some change, but i know that i’m lucky to even have insurance.

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    temping felt kinda like being a spy sent out on missions every week…if those missions involved sitting in a windowless office answering phones and cutting and pasting into Excel spreadsheets for hours at a time, in exchange for weak coffee and a pittance.

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