“I never really wanted to start freelancing. It pretty much happened by accident,” said Ray Phomsopha, a young freelancer. “Freelancing sounds great as an idea. Great day rates, freedom, being your own boss.”
Ray is not alone in this thinking. According to Freelancers Union, a non-profit that represents independent workers, nearly 30% of the workforce today can be classified as freelancers or independent workers who have thrown off the drudgery of a regular 9-5 job. They work as writers, graphic and web designers, advertising specialists, translators and artists. They have struck out on their own, becoming their own bosses and having the freedom to decide when and where they are going to work and for how much. Sounds like a pretty sweet deal, especially for many young workers who are looking for a new approach to work that includes the flexibility and adventure we crave.
But, behind all the glitz and glamour that freelancing is wrapped in, is a harsher reality that many young workers run into blindly. There are some who are able to make it the freelancing world. Those who can make it work are generally older and more established people in their fields of work. New comers, however, quickly find themselves in protracted struggles just to get by.
With the ups and downs and pros and cons of freelancing, are these workers really so free and independent or are they, like the rest of us, still getting screwed over?
Becoming a freelancer wasn’t much of a choice for Ray, who has been staying on his brother’s couch in Brooklyn for a year. “I was working full time at a small production company when I had to spend a month in the hospital. When I got out, I no longer had my job. So, while I was looking for another place of employment, I started freelancing. That was about 3 years ago and I’ve been freelancing ever since.”
Ray, like all young workers today, is growing up and working in a job market radically different than their parents. The manufacturing jobs with their great pensions and health benefits are a dream of the past. They are stuck with low wage jobs that don’t provide much in the way of economic security, healthcare or retirement benefits. Instead of working in one job for all their entire lives, young people are constantly in a search to find that next big job (that never comes) that will finally start putting money in their pockets and bank accounts.
All of this economic insecurity feeds into the hype around freelancing and working independently. For some, it seems like an ideal arrangement because of all the great work hours (basically whatever you want them to be), the ability to move from job to job and not have someone else breathing down your neck checking in on you. You don’t have to be dependent on one employer all your life. Once your work is done, you can move on to your next gig and next employer. No loyalty and no longer-term agreements.
But in these one-night stand types of agreements, it seems that the employer ends up getting off while it’s the freelancer who gets screwed.
Businesses are always trying to find ways to cut costs and to increase their profit margins. More than ever before, employers are looking at how to trim back employee benefits and salaries as sources of increased profits. One of the easiest ways to do so is to hire temporary workers in order to do the work of a full-time employee.
Temporary workers, including freelancers and independent contractors, exist outside the normal labor laws that employers have to follow. They don’t have to provide with them health insurance, pensions, pay Social Security taxes and unemployment compensation taxes. Temporary workers aren’t even covered in most union contracts because they are outside the regular employee classification. Because of this, employers hire more freelancers and independent contractors to help bust unions and make it difficult for workers to unionize creating another way to increase their profits.
Employers are even able to get out of paying freelancers the agreed upon wage. In talking about a gig he had in DC making $1,600 in just four days Ray said, “The company still owes me $800. This was about two years ago and I don’t think I’ll ever see that money”.
Freelancers and independent contractors have no legal recourse outside of suing when it comes to forcing employers to pay them their full amount. Instead of spending more money in costly legal battles, most freelancers simply walk away and take the loss.
Health insurance is another costly and difficult reality for most freelancers. Since the employer doesn’t want to provide health insurance, the freelancer is stuck trying to pay the full cost on his or her own health insurance plan. Independent workers pay upwards of 30%-40% of their pay in health insurance costs or simply go without.
Issues surrounding taxes, Social Security and worker’s compensation are some of the hidden costs of freelancing that end up catching up with people. The money that you are paid freelancing isn’t taxed so you have to ensure that you set aside portions of your pay when its time to file your taxes.
A briefing created by Freelancers Union shows that freelancers and independent workers have to pay their taxes in quarterly installments at much higher rates than full time employees. They pay double the amount in Social Security taxes because they cover the amount paid for by the employer and the employee. The complex tax code for freelancers forces many of them to hire costly accountants or simply not pay the correct amount of taxes. Many end up owing huge sums of back taxes that they can’t ever pay back. This becomes a danger not only for tax issues, but if you would be ineligible for Social Security and unemployment insurance if you don’t pay into the programs.
The solutions to the problems facing the independent workforce don’t lie in going it alone, but in collective action. One of the most effective and far-reaching solutions to these problems is passing the Employee Free Choice Act (EFCA), which makes it easier for workers to collectively bargain for a contract. By making it easier for workers to form unions, this would have a greater impact on the working conditions of all workers, including freelancers. Freelancers wouldn’t be left to fend for themselves if an employer breaks the contract, the union and other workers would be there to back them up.
Including freelancers in collectively bargained contracts would put an end to employers being able to hire temporary workers as a union-busting tactic that pits worker against worker. They would be able to regulate the pay scale so that freelancers get fair deals and require employers to pay independent contractors their full amount on time. They can also mandate that employers provide access to health insurance, pay Social Security taxes and unemployment insurance for all employees, regardless if they are temporary or full-time.
The success of these tactics was demonstrated in the recent Writer’s Guild strike. One of the demands that were won in the strike was for employers to hire the temporary workers that had been working full time without benefits.
Three years of freelancing and Ray is ready to move on. “So yeah, I’ve about had it with freelancing,” says Ray. Instead of making big money with a flexible schedule, he’s stuck with a “rash that I’ve had for almost a year that I can’t see a doctor about because I don’t have health insurance” and a steady diet of “ bologna sandwiches and ramen noodles.” As for this month’s rent, Ray had to tell his brother “Sorry, I still can’t pay rent until my checks come in. But they should be here any day now!”
– Adam Tenney, Dynamic
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