THE 9-TO-5 JOB IS DYING. BUT WHAT WILL AN INCREASINGLY INDEPENDENT WORKFORCE MEAN FOR THE ECONOMY?
By 2040, the American economy will be “scarcely recognizable,” according to a new report published by the Roosevelt Institute and the Kauffman Foundation.
We’ve seen glimpses of the looming changes already: freelancers now make up 34%—that’s 53 million people—of the U.S. workforce, according to a 2014 survey by Edelman Berland. In the next 25 years, this shift will accelerate in a major way towards entrepreneurship, independent contracting, and “peer-to-peer” work on platforms like TaskRabbit. Additionally, there will be major diversification of entrepreneurship as new platforms like crowdfunding and relocalized production become increasingly popular.
As traditional jobs wane, there will be some growing pains. “It’s going to put major strains on our public fiscal system,” says Dane Stangler, vice president of research and policy at the Kauffman Foundation. “We’ve built all of our massive entitlement programs—whether it’s social security for retirement or health care systems or unemployment insurance or whatever—around this notion of a fixed job.”
As we veer from this traditional work model, Stangler says the government will end up losing major payroll taxes, and that’s going to create challenges for our fiscal system unless some “very significant policy adaptations” are made.
He warns: “There’s a whole ripple effect if this is going to be an actual and growing part of the economy.”
The report, which includes insights from 30 economists, technologists, policy makers, and entrepreneurs, focuses on four main topics: the future of work, the future of technology, the future of entrepreneurship, and the future of inequality. Below are five changes to expect from America’s next economy:
1. WORK WILL CONSIST OF MANY “SHORT-TERM” ASSIGNMENTS
It used to be that having a job meant security and success for Americans. Since the recession, the idea that a good job is the centerpiece of the “good economy” was proven wrong, as people realized having a good job doesn’t equate to job security.
By 2040, the job market will consist of part-time assignments, portfolio careers, and entrepreneurialism. Instead of day-in, day-out work consisting of much of the same responsibilities, a “career, then, will be composed of thousands of [short-term] assignments spread out over a lifetime,” says the report.
In other words, workers will work on short-term assignments ranging from several days to multiple years, and will become employees for their own firms. As this becomes the norm, the vast majority of job growth in 2040 will come from small businesses.
2. THERE WILL BE MORE PLATFORMS AIMED AT MITIGATING ECONOMIC RISK
As traditional jobs—with their health insurance, retirement planning, and tax withholdings—disappear, we will see more platforms and institutions develop to help workers and their families manage exigencies and mitigate risks. These platforms will meet needs in three distinct categories, according to the report:
1. Offer new means of marketing and selling goods and services, like Etsy does with handmade crafts.
2. Provide ways for workers to learn about new assignments, to qualify for and schedule assignments, to collect payments, and to meet such needs as health care, insurance, pensions, child care, and elderly care, like Task Rabbit.
3. Offer training and education programs for workers to connect with the larger market.
3. THERE WILL BE MORE TALENT AGENCIES LOOKING FOR THE STANDARD WORKER
In the past, talent agencies were reserved for performing artists and athletes, but in the next economy, talent agencies and headhunting firms will start to play a bigger role in the lives of the everyday professionals looking to further their career. The report says:
There is not a single model or clear linear path along which the platforms of the new economy will evolve, but it is evident that the profoundly different nature of jobs and work in the emerging new economy will require profoundly different platforms for organizing work and careers.
4. SMALL-BUSINESS GROWTH WILL LEAD TO A BOOST IN WAGES
The rise in self-employment will inevitably increase wages (think: you’re no longer suffering under an underpaying employer). Additionally, as the aging population retires and with a birthrate below replacement, the labor supply will decrease, which will also play a role in boosting wages.
While immigration can help meet new labor demands, it’s unlikely to stall wage growth, according to the report.
5. EVERYONE IS RESPONSIBLE FOR THEIR OWN SUCCESS
Sure, you’ll be free from an underpaying employer, but this also means your career success relies solely on you.
The report says:
In particular, workers will be forced to think constantly about their next assignment, the skills required for that assignment, and the education and credentials required to gain those skills.
There will no longer be specific guidelines or career ladders to guarantee a career trajectory. Instead, workers will have to be savvier than their predecessors, because life has gotten much more complicated.
To be successful, individuals will have to be more entrepreneurial in thinking and planning their lives, meaning constantly selling themselves, defining one’s own work, and educating themselves for future assignments. In the next economy, work may be more lucrative and fulfilling, but the idea that you’ll be professionally rewarded because you’ve been loyal to a company will be a thing of the past.
FIGURING EVERYTHING OUT ON YOUR OWN CAN BE HARD, SO WE ASKED FREELANCERS WHAT MAKES THEIR LIVES EASIER. HERE ARE THEIR FAVORITE TOOLS.
Aside from actually drumming up business, a lot of the stress of freelance life involves staying organized and on task. Fortunately, technology is there to help us, but it’s not always clear what’s actually worth the cost or the time spent figuring it out. Here are some programs, apps, and tricks that successful freelancers swear by:
FOR ORGANIZED WRITING
Chicago author and editor Wendy McClure turned me on to Evernote, which helped me out greatly when I was working on a story that referenced several articles and emails, which is what Wendy uses it for, too. When she has all her saved references in on space on the Evernote desktop or phone app, she says, “I can free up my web browser for other tasks, or just close it up if I want to stay offline to focus on my draft.” McClure also adds that the app is helpful for scanning receipts for tax purposes.
“Scrivener is writing software that has seriously changed my life,” says Chicago health writer Cindy Kuzma. “I write a lot of medical articles that involve sourcing from research studies; Scrivener helps me stay organized by housing everything in one file and then by showing two files in split screen, so I can have the source material on one side and my draft on the other. I know I only use a small portion of its functionality; I think it’s worth at least double the $45 price tag.”
FOR KEEPING DISTRACTIONS AT BAY
The internet is a distracting place. For those freelancers who can’t rely on good, old-fashioned willpower to stay focused, many swear by Freedom, a program that locks your computer off the Internet for as long as you command it. “It’s awesome for forcing oneself to actually write versus ‘write,’” says marketer Brooke O’Neill. Crucially, it talks to your phone as well, so you can’t cheat.
Some research says there’s a science to how long you should work uninterrupted. “Twenty-five minutes is a pomodoro—how long you can really work on something before you need a teeny break,” says writer Courtney Rubin. For those, she says, “I am as low-rent as it gets. I use a timer on my phone. I set it for 25 minutes, and I generally don’t check my email during that time.” When she has to source emails for a story, “I cut and paste it all into a Word document so I’m not tempted to cheat.” She will also switch the phone to airplane mode during this time so she won’t be distracted by notifications.
Pomodoros (named for the Italian word for tomato by a study-abroad student who coined the method using a tomato-shaped kitchen timer) can be set by your computer, too. “Every day I use TomatoTimer.com. It’s much faster and less unwieldy than setting the timer on your phone,” says editor and writer Lindsay Robertson. “There are also browser extensions that let you work in 25-minute increments and take a five-minute break and block social media sites, but I’ve found that sometimes I actually need to look at a social media site for work, and it’s annoying when it’s blocked.”
If you want to be hardcore, though: “In times of great desperation, I sometimes resort to Write or Die,” says Chicago writer Anne Ford. It’s a program that can be set to start deleting your text if you stop writing for too long.
FOR KEEPING YOUR FINANCES IN ORDER
When I first started out, pop culture writer Nathan Rabin referred me to Aynax, which he described as “perfectly adequate” when it comes to tracking invoices. Sometimes “perfectly adequate” is all you need. I then use an app called TinyScanner for sending off contracts. Robertson, meanwhile, recommends Harvest for invoices: “It is so incredibly easy that I don’t dread invoicing.”
HelloSign, says business writer Ann Logue, is a Gmail add-on that “lets me sign contracts without the horrible steps of printing, signing, scanning, then emailing. You click on the form, fill it out, and send it back. It saves a ton of time and energy.”
“I use Freshbooks for invoicing, time tracking, and expenses,” says Kuzma. “I really like that I can use it to take photos of my receipts for expenses, then I don’t have to hoard paper copies. The invoices themselves look professional, and I can either send them as pdfs or send an email directly through the program to my client.” Plus, her accountant can simply log into her account when he needs to do her taxes.
FOR RECORDING AND TRANSCRIBING
For phone interviews I use an iPhone app called TapeACall (the pro version). It takes a few steps, but if I can figure it out, anyone can. It saves your recordings, and then you can export them to DropBox or anyplace you like for transcribing.
For taping Skype interviews, Ford says, “There’s a great add-on called Call Recorder. It pops up when you open Skype, and you just click a button to start recording a call. Super-easy, and it’s never failed me.”
Kuzma points out that Scrievener is also helpful for transcribing. “You can have a soundfile on one side and the transcript on the other, then use quick keys to pause and restart. Plus, there’s a feature that will automatically rewind a few seconds each time you restart, so you can get anything you might have missed.
FOR DEADLINES AND REMINDERS
I live in fear of forgetting an assignment or an appointment. My husband, producerSteve Delahoyde, was the one who told me about Wunderlist. “I like that it works across devices, so I have my to-do list everywhere and it’s always in sync. I also like the Pavlovian ‘ding!’ that sounds when you check something off,” he says. I also like that we now have a shared grocery list on it, so he has no excuse not to get what we need at the store when he’s there.
Speaking of mixing work and groceries, author and columnist Jolie Kerr likes AnyList. “I find really helpful for juggling household responsibilities with work, which can be really tricky when you work at home and can get easily distracted by the fact that you just ran out of olive oil.” She uses it to jot down shopping lists and errands. She also recommends the Chrome extension calledDayboard. “It lets you create a five-point to-do list that shows up any time you open a new tab. It’s super helpful for noting things like deadlines or reminders to send and check up on invoices.”
CLIENTS TOO OFTEN SEE FREELANCE ARRANGEMENTS AS LOW-COST LINE ITEMS INSTEAD OF STRATEGIC PARTNERSHIPS
The night it happened, I was at a party filled with potential clients. I saw opportunity everywhere I looked. Then I saw a friend. As we caught up on business and life, others joined us. My friend introduced me as a “marketing freelancer” to the CEO of a company. She smiled politely, cocked her head, and asked if I was an expert at “that Twitter thing.”
I explained that I was actually a CMO-for-hire focused on marketing and branding strategy. But after my friend’s introduction, it was clear that prospects now saw me as a low-level social media worker who’d just pile tweets and status updates into their channels. I left feeling undervalued and angry. I vowed never to let anyone introduce me that way again.
Looking back years later, I see my friend hadn’t meant me any harm. If anything, it was his own earlier, failed attempt at self-employment that made him label me the way he did. He was once a “freelancer”—glad not to be one any longer.
THE TROUBLE WITH “FREELANCER”
The words you use influence others’ perception of you. What’s your first thought when you hear the word “freelancer”? Do you picture a college kid working out of her parent’s basement? Many people who call themselves freelancers don’t exactly think of what they do as a business. But they should.
Saying you’re a freelancer doesn’t signal to others that you’re a know-what-you’re-doing, take-no-crap professional. That bias may be unfair, but it’s a reality. Clients too often see freelance arrangements as low-cost line items rather than strategic partnerships.
And that creates a power imbalance, with the client in charge—hardly an ideal situation for independent workers, especially those trying to start a business with the express purpose of gaining more freedom over their work. Others start working on their own after they quit a job or get laid off. Maybe freelancing was just the path of least resistance, possibly begun by picking up work from a former employer.
As clients understand them, “freelancers” often have a series of small gigs, short pipelines, and limited ability to choose which work they do. The term also implies a temporary state, suggesting that you’re in transition and may find a new job soon, leaving your client in the lurch. Clients don’t pay you for your freedom. They pay you to do a job for them—and expect you to finish it.
Of course, any freelancer with integrity will do that, but many find themselves up against less magnanimous expectations. You don’t have to pretend you have a corporate business or huge staff, but you do want prospects and clients to know that you’re serious about your work and that they can count on you.
WHY WHAT YOU CALL YOURSELF MATTERS
Everyone who works for themselves has wrestled some point over what title to use. Many start by using the title “freelance _______”—designer, writer, software developer, or whatever the case may be. And since many do start off seeing themselves freelancing as a short-term gig, they use the label strategically, signaling that they’re available for hire and would consider a full-time offer.
But it’s easy to fall victim that way to feeling like an impostor—someone who’s just pretending to be a business owner. So while “freelancer” may be more akin to how you see what you do, it might be selling you short. After all, your livelihood doesn’t depend on your own self-perception, but on how potential clients see you and your work.
If this feels like just semantics, it isn’t. Words affect not just your personal brand but also your mood and behavior. Feeling like an imposter attracts an inner trash talker. Having repetitive negative thoughts can activate the amygdala, the brain’s fear center. Our own ideas about ourselves mingle with the ways we believe others see us. So if you think of yourself as someone who’s desperate for work, lost control of their career, or lacks expertise, you’ll telegraph that message to prospects and clients.
The popular belief that communication is 93% body language and only 7% words has been found not to be quite true. Yet we’re often sloppy when it comes to our word choice when it really matters. In fact, the words we ourselves speak send messages to our brains, which adds a new dimension to the fact that the ways others see us starts the second we introduce ourselves.
RUNNING A BUSINESS OF ONE
When he first started out, Tim Dietrich described himself as a “freelance database consultant.” But he soon realized that the “freelance” tag said more to clients about the structure of his business (process) than what he could actually do for them (results). Tim now introduces himself with this simple line, “I develop custom apps for businesses.” Who would you want to work with more: Someone who tells you how they file their taxes or explains what they can do for your balance sheet?
Telling someone you own a business gives you instant credibility. It signals that you’re serious about your work. Business owners are professional. Business owner are savvy. Businesses solve problems for other businesses. Having a business is a commitment, signaling that the client’s project is likely to get your focused effort. Telling prospects that you have a business can also influence whether you land a project in the first place.
Freelancers don’t always see themselves as business owners because businesses have quarterly targets, revenue streams, and brand images to preserve. And clients expect that other businesses have systems and processes leading to consistent results. Don’t worry if you’re still working on systems and processes. It’s still okay to call yourself a business—which can in turn push you to build a workflow for yourself, set firmer goals, and increase your margins—just like an actual business.
After all, if you’re in business for yourself, that’s exactly what you already are.