Thriving or Surviving in the Freelance Economy

A year and a half after graduating from college, Amanda Herman is juggling several jobs, including one as a house manager at a theater.

January 14, 2015

Rachel Sutherland marks the milestones of her life with tattoos. When she took a buyout in 2009 after 12 years as a reporter and editor for the Charlotte Observer, she ran four triathlons, celebrating each with a star on the top of her left foot.

This November, she got a new tattoo on her right arm: a cartoon-like thought bubble with an asterisk in the center, the logo for the public relations company she formed when she left the newspaper. Begun with the buyout money, a MacBook Pro, and a $15 desk from Ikea, Sutherland’s business now employs a part-time production manager and four contractors. Soon, she will triple the salary she made at the Observer.

Rachel Sutherland's tattoo.

Rachel Sutherland’s tattoo

“The tattoo is a constant reminder of what I can accomplish and how amazing it’s been to defy my own expectations,” she said.

But Sutherland is only one face of what is clearly a new economy. In October, Audrey Cefaly enjoyed a different kind of celebration. The web and graphic designer from the exurbs of Baltimore landed a full-time position with benefits at a start-up — the kind of job she had for 11 years before being laid off in 2011. She describes the interim three and a half years as “absolute hell” — a period in which she split her time between freelance clients and contracts, often working twice as hard for a third of the pay.

“It was just pervasive anxiety,” she said. “I was always juggling hours between clients and never knew how much money I was going to end up being paid at the end of each week.”

Two Worlds

Sutherland and Cefaly may seem like they come from different worlds. But according to historians, economists, and those living through it, that split picture is far from unusual. It’s been called “freelance nation” or the “gig economy,” and workers in this sector have common attributes. They juggle multiple jobs, market themselves, and are more likely to call home or a coffee shop their office than a cubicle farm. They are dreamers choosing to leave the gerbil wheel of corporate life and hardened realists forced to eke out a living any way they can.

Get full issues of AAUW Outlook magazine

Winter 2015 Outlook cover art

Join AAUW today! Your membership includes a subscription to Outlook and many other valuable benefits.

The explosion of the independent sector — a motley group that includes everyone from temp workers to entrepreneurs — has occurred at the intersection of two trends: the disappearance of job security and its protective umbrella of health and retirement benefits and the rise of web-based tools that have dramatically shortened the once-arduous journey from big idea to business creation. Courting clients can now happen at the speed of a tweet.

“I think of this as a seismic shift in the economy in the same way that industrialization moved us from farm to factory,” said Richard Greenwald, a workplace historian and dean at Brooklyn College. Acknowledging the polarized portrayals of the trend, he nonetheless called them “beside the point.”

“For more and more Americans, this is going to become the reality,” he said.

Freelance by the Numbers

It is difficult to pinpoint the size of the independent sector. But studies put the number between 30 and 53 million workers out of roughly 140 million U.S. workers. A job in the traditional economy came with health care, retirement benefits, and a host of legal protections. Without that umbrella, a new economy needs new institutions to help navigate it. Organizations like the New York City-based Freelancers Union are attempting to fill that need. The union is known for its innovative solutions to health care and retirement benefits for its growing membership, which at 238,000 is up 410 percent from 2007, according to a 2014 survey by the organization.

But there is a bleaker side. In 2010, according to a Freelance Union survey, 12 percent of the organization’s New York City members received public assistance, and 29 percent earned less than $25,000 a year.

The Glass Ceiling

An online survey of 2,017 people by MBO Partners found that while women and men continue to pursue freelance work in equal numbers, they do it for different reasons. Seventy-one percent of women said flexibility is more important than making the most money, versus 58 percent of men. (The survey numbers reflect those who chose to work for themselves and those forced into the freelance life.)

But beneath those numbers, a clearer picture emerges. It’s about more than flexibility, said Steve King, a partner with Emergent Research, which conducted the MBO survey. “It’s about avoiding office politics, gender discrimination, and glass ceiling issues. Between these reasons, traditional employers are losing a lot of talented women as they turn to more fulfilling independent work.”

Elizabeth Vaughan

Elizabeth Vaughan learned by accident that she made 20 percent less than a male counterpart at her firm.

None of this is news to Elizabeth Vaughan, an attorney from Leesburg, Virginia. In 2007, she was a Social Security and disability lawyer with a Washington, D.C., firm. The job required her to travel a lot — which did not jibe with her and her husband’s plan to start a family. It didn’t help that her exit coincided with an upsetting discovery. One day, her assistant brought her a pile of letters from the printer that accidentally included a salary report. Vaughan learned that she made 20 percent less than a male colleague, even though they’d worked for the same length of time, and she had a better track record of winning cases. She left the firm with the issue unresolved and started a solo practice in adoption law and child-abuse prevention. Working from home, she makes twice what she did before while taking time out for her children, ages 3 and 5.

Her analysis is blunt: “As a woman, you can choose to send out your résumé in a bad economy so that you can try to work for a company that is going to pay you less than your male counterparts, penalize you promotions-wise for not working long hours, not accommodate your home obligations, and subject you to sexual harassment in many cases. Or you could work for yourself. If you take health insurance out of this equation, it is simply not a very hard choice.”

Millennials Come of Age

According to the MBO survey, the generation that graduated from college during the recession is well-represented among freelancers. Asked in 2014 if an increasing number of their friends were working in the independent sector, 28 percent of recent graduates surveyed said yes — the largest group to do so.

A year and a half after graduating from James Madison University with an arts administration degree, Amanda Herman thought she’d have landed a job at a theater by now. Instead, she’s living with her parents and juggling a host of jobs: interning at a theater company just outside Washington, D.C.; substitute teaching; contracting at an audio book company; and house managing at another local theater. Along the way, she’s learned some important lessons — managing her hectic schedule with an app and grappling with the surprise expenses that independent workers often face.

At a previous internship at a theater in Florida, she was dismayed to discover that she had to pay self-employment tax on top of her meager stipend — which complicated her taxes and shrunk her refund. Although self-employed workers are supposed to be able to set their hours, Herman’s internship had her working long days, nights, and weekends. “One of the interns tried to talk to the management about it,” she recalled. Their response? “It’s legal. Sorry.”

Herman’s situation is not unique. According to the U.S. Department of Labor, “Misclassified employees are often denied access to critical benefits and protections.” Missing out on benefits sometimes makes Herman feel “unprepared” for the future. But she finds freedom as well as uncertainty as she navigates the gig economy.

“I’ve seen the recession hit, where a lot of people lost their benefits and savings anyway,” she said. “I feel like I’m doing the best I can right now. While I’m young and don’t have a family, I’d rather try to pursue what I want than wake up in 30 to 40 years and wonder, ‘What if?’”

This article originally appeared in the Winter 2015 issue of AAUW Outlook magazine. For more stories like this, subscribe to Outlook today.

“Thriving or Surviving in the Freelance Economy” was written by Andrew Brownstein, a freelance writer living in the Washington, D.C., area specializing in education, psychology, and the arts. You can reach him at andybrownstein@gmail.com.

AAUWguest By:   |   January 14, 2015

1 Comment

  1. […] Freelance work is on the rise. But is it a boon or a burden for women workers? Read more »  […]

Join the Conversation

You must be logged in to post a comment.