The Freelance Trade Off
The self employed are giving up stability for freedom
We’re increasingly moving to a freelance economy, where the business we work for is little more than a name, an app, and some marketing scheme to connect worker to jobs. Just last week I got emailed to sign up for an Uber for teachers, which sounds…weird.
This move away from dealing with the cubicle walls and corner office boss isn’t an unqualified win. We’re leaving behind a somewhat stable job, benefits, time off, unemployment, and payroll taxes handled for them.
That’s a lot. Yet I’ve made that choice, and more and more people are making the same one.
So what are we getting instead of Karen in HR withholding payroll taxes and two weeks of PTO?
In a perfect world, flexibility.
As independent contractors, we’re supposed to be able to pick and choose jobs and get the work done on our own time and our own way.
If we meet the deadline and give a good product, that should be it.
Is the Freedom Worth It?
I had a job where the manager’s key metric was how often my Skype light went from green to yellow. Because if you weren’t moving your mouse on the computer, you must not have been getting work done. Or something like that.
As for actual output, well…that was too hard to measure.
Butts in seats. That’s all the mattered. Because apparently we are still working on a Henry Ford assembly line.
Not all jobs are like that, of course. But I couldn’t stand it. After reading a million business books and attending a million networking events, I figured I had to at least try it on my own, figure out if I could be successful on my own terms.
That freedom is scary, though. I could literally do nothing all day. Or I could work all day and not get any money for it. I may not have the micromanager boss breathing down my neck, but now my work has to speak for itself.
Then There’s The Money
$1 pay as an employee is greater than $1 pay as an Independent Contractor.
For complicated political reasons, we like to hide the amount of money employees actually make. For every $1 an employee makes, the employer has to contribute 7.62% to payroll taxes. Then there’s another 6% to unemployment. Then there’s whatever the employer pays for the benefits, which can range from basically nothing to quite generous.
For the freelancer, $1 is $1. Then you’ll have to take care of the rest of that stuff from your piece.
I’m a big fan of transparency, and all the hiding of expenses making the jobs basically incomparable is a huge flaw in this move to the gig economy. And, considering most politicians’ best suggestion right now is to force gig workers to be listed as employees, I’m not sure there’s a whole lot of movement to make this situation better.
A Word of Warning
I worked one summer in an internal call center for one of those door to door summer sales companies that drive homeowners crazy. All of our reps were listed as independent contractors.
They were independent contracts who (1) had no control over their schedule, (2) had to wear company uniforms, and (3) couldn’t off any other products.
That is not an independent contractor. That is an employee for a company that wants to screw you out of benefits.
I don’t know how they got away with that treatment then. Over a decade later, I’m guessing they’re still up to the same tricks.
Finding Success in the Freelance World
For so many, that dream job means that you are creating the job you want rather than taking what someone else has to offer.
I’m trying to do that now, and I salute those who are trying to do the same thing.
For me, I’m in it for the flexibility. Losing out on the benefits sucks, but having the option to choose my own, even if it costs me more, more than makes up for the loss.
Plus freelance allows tax deductions, which is something this tax nerd absolutely loves.
So what is your dream job, and how does freelance fit into that picture?
Takeaways
- $1 of employee wages > $1 of freelance work
- Freelance doesn’t have the monetary benefits
- The flexibility might make it worth it
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