More than a quarter of working-age Americans earn money through a freelance job
By Lorraine Mirabella
The Baltimore Sun
BALTIMORE (AP) — By day, Leah Needham buys groceries to deliver to customers in White Marsh and Middle River. But in the evenings, the shopper for online grocery service Shipt trades in her green T-shirt for a pair of ballroom dance shoes and heads to her next gig. In a Glen Burnie studio, she pursues her passion, teaching couples how to dance the tango, foxtrot and bachata.
The 30-year-old Hampden resident has always patched together jobs. She earns a living without a steady paycheck or employer-provided medical insurance. The economy has improved since she graduated from college eight years ago, but still she dismisses thoughts of working for someone else.
“I’ve thought about it ... but it’s a trade-off with freedom and flexibility,” she said. “You can literally bend and manipulate your schedule and your time to get where you want to be financially. ... I can pursue what I really love to do, which is dancing, and have another income to make that happen.”
Needham is among the workers fueling what’s known as the gig economy — increasingly a way of life in the Baltimore area and nationally. Gig workers are independent contractors paid by the job, or gig. They say they want flexible hours and a chance to be their own boss. Many want supplemental income or a stronger resume. Some employers rely on gig workers, while others turn to such freelancers for hard-to-fill or specialized jobs.
More than a quarter of working-age Americans earn money through some sort of freelance or gig job, according to management consulting firm McKinsey & Co. They develop websites, deliver groceries, drive people to work and school, often setting their own terms for workload, schedule and, sometimes, pay. More than half do so to supplement income from another job, while about 12 million to 13 million count their gigs as their primary source of income.
Some forecasts project as many as half of all U.S. workers could be freelancers within the next decade, many of them by choice. A 2016 McKinsey study found nearly three-quarters of American gig workers could have found a traditional job but chose gig work instead. It’s an easier path thanks to the growth of digital platforms — think Uber — linking workers and employers and workplace shifts away from desk-bound, nine-to-five jobs.
For years now, younger workers have been accustomed to moving from job to job and even career to career. “This generation is taking it one step further. ... ‘Why not go try and do it myself and build my own business?’” said Susan Lund, a McKinsey partner and expert on global labor markets. Digital platforms have “opened the door to a lot of people who don’t have a particularly unique set of skills to earn money in this way. It has lowered the barriers to entry to anyone to try.”
Needham said juggling life as a ballroom dance teacher and Shipt shopper “fits my lifestyle right now.” Teaching dance by appointment contributes about 70% of her income, with personal shopping making up the rest. She buys her own health insurance — a big expense, she said, but she has adjusted her workload to cover it. She took on Shipt when it launched in the Baltimore area last year in March.
“It’s a really interesting gig,” she said. “I love the physical activity of it, just constantly being up and moving and trying to get things. It’s like playing supermarket sweepstakes, but you get paid.”
Gig work also offers flexibility for students and people caring for children or elderly parents. It can be a gradual exit from the labor force for the semi-retired, Lund said.
But the lack of benefits and less stable income can be daunting, she said, making it harder, for instance, to qualify for a mortgage or other loans.
And some argue the gig trend will be bad for workers in the long run.
Labor leaders have stepped up criticism recently of ride-sharing companies such as Uber, Lyft and Via. Critics argue those models trap drivers in low-wage, no-benefit jobs and compete with and threaten public transit. The AFL-CIO argues in a recent report that ride service companies misclassify employees as independent contractors and artificially drive down costs by passing maintenance and insurance expenses to drivers.
“Because someone is a part-time worker does not mean they can’t be an employee,” said Larry Willis, president of the AFL-CIO’s transportation trades department. “There are a lot of jobs where people work part-time but the law affords them the protections of still being an employee... Many (workers) are barely making ends meet, and once they back out expenses, they’re not making minimum wage.”
The labor union wants more states to follow the lead of California. A law based on a 2018 California Supreme Court decision will require businesses to classify more workers as employees, not independent contractors, making them eligible for overtime pay, sick leave and other benefits. The measure, to take effect next year, is already being challenged in court, including by a truckers association that wants its members to continue to be able to work as independent drivers.
The ability to work on her own schedule is making all the difference in retirement for Deborah Dent. Dent, 68, of Millersville, retired in 2013 as a telephone assistant at Baltimore Washington Medical Center in Glen Burnie, A couple of years later she heard about Uber and signed up. Driving people to and from work, school, doctors, the airport and other destinations gives Dent a way to stay active, meet people and take vacations without having to dip into her retirement savings.
Most mornings, she heads out in her Toyota Corolla around 4:30 a.m., takes a break in the middle of the day, then sometimes takes passengers in the evenings. Once she earns $100, she turns off the Uber app for the day. She typically earns up to $600 a week, spending about $150 on gas and weekly car detailing.
“This is so that I can live my life to the fullest, and do what I want to do,” said Dent, who has traveled to Miami, Paris and Amsterdam and plans a cruise to Jamaica. “I didn’t retire to be a couch potato.”
It’s a good time to be a gig worker because employers appear willing to hire as needed for particular jobs and to give startups a chance, said Owen Henry, who started a fledgling technology consulting company from his home in Baltimore’s Mount Vernon neighborhood.
For now, it’s a side business and he and a business partner have kept full-time day jobs. But on lunch breaks, in the evenings and on weekends they turn their attention to Blue Heron Digital, building websites, fixing email programs and recommending digital strategies for small businesses and nonprofits. In less than a year, the startup has attracted more than 10 clients that have signed contracts ranging from $600 to $1,000.
“For us it was as much about being dissatisfied with the way we were working in our day jobs,” said Henry, 31. “We like our jobs, but they are still very standard desk jobs where you have to go into an office. (Starting a business) has been more about lifestyle and flexibility than money.”
It’s been challenging amid a proliferation of websites offering freelance gigs that have drawn competitors from around the world and, in some cases, suppressed prices.
“Our type of work is generally well paid, but we find ourselves competing on gig economy sites with people from other countries that have lower costs of living. They’re able to offer rates below what we can charge,” Henry said.
One freelance platform, Upwork, hosts 375,000 freelancers and 475,000 hiring employers at any given time, a third of them Fortune 500 companies. Upwork said it specializes in matching professionals to businesses seeking specialized talent.
Jobs are as varied as game and software developer, audio producer, animator, technical and grant writer, marketing and public relations specialist, and mechanical, electrical and chemical engineer. Employers who post jobs are promised qualified proposals within 24 hours, enabling them to compare bids and check reviews and prior work before connecting for interviews.
“These are not people who think of themselves as gig workers. They think of themselves as professionals, with years of experience,” said Shoshana Deutschkron, Upwork’s vice president of communication and brand. “These are people choosing to work this way. They used to have traditional jobs and realized they could have a different lifestyle.”
The share of people finding work online is growing fast, Deutschkron said. As of last year, 64 percent of freelancers found work online, a 22 percent jump from the previous year, she said.
Employer postings, too, have grown as businesses find “they can’t get all the skills they need by hiring in traditional methods,” she said. “Businesses that are trying to be competitive ... are realizing they have to be more innovative.”
Kolya Tevosyan, a web developer, finds all his freelance projects on Upwork, choosing from among hundreds of postings for his profession. Tevosyan, 32, left a graphic design business he ran with his brother in 2014 to specialize in Wordpress web development. He began applying for jobs and soon realized he wanted to work for himself. The father of a young son and daughter set up an office in his Rockville home, where he and his wife, a graphic designer, build and revamp web sites for start-ups and large businesses alike.
He starts most days submitting multiple bids, a quick online process that usually lands his business, Wordpress Lab, two to three new projects a month. Developers skilled in Wordpress are in demand — he has completed more than 260 projects in the past four years and has a dozen more in progress. That’s been more than enough, he said, to offset the cost of buying his own health insurance for a family of four.
“You need a good reputation and good past references, and if you have those two, it happens,” Tevosyan said. “People see that you are a good quality web developer, and they hire you. Being the boss of your life, it’s worth everything.”
