In recent years, the Economist magazine has published several long articles about the growth of the freelancing workforce without mentioning any of the concerns that freelancers have about this individualistic new employment market.
But finally they’ve acknowledged the existence of potential downsides. Just as we argue in Independents Unite!, the Economist recently wrote that our social structures are not equipped to deal with so many solo entrepreneurs.
The magazine devoted the cover, leader and main feature spread of the January 3 2015 edition to the topic of freelancers, under the headline “Workers on tap” (article paywall protected).
The leader summarizes the growth of the “on-demand economy”, meaning the emergence of websites that farm out microtasks to an army of freelance workers. It’s not just manual labour and computer-based task work: technology is allowing high-skilled knowledge work to be broken down into parcels and offered to the crowd to complete.
Here are a few of the Economist’s thoughts:
“Risks borne by companies are being pushed back on to individuals – and that has consequences for everybody…
“Consumers are the clear winners; so are Western workers who value flexibility over security… Taxpayers stand to gain if on-demand labour is used to improve efficiency in the provision of public service…”
“But workers who value security over flexibility… feel justifiably threatened… And the on-demand economy certainly produces unfairnesses: taxpayers will also end up supporting many contract workers who have never built up pensions.”
So what should be done? Here are the Economist’s suggestions:
“The ways governments measure employment and wages will have to change. Many European tax systems treat freelancers as second-class citizens, while American states have different rules for ‘contract workers’ that could be tidied up. Too much of the welfare state is delivered through employers, especially pensions and health care: both should be tied to the individual and made portable…”
We agree. The move toward social security systems not tied to traditional employment is a good start, as long as it does not create new onerous flat-fee charges or make life more difficult for freelancers.
What’s needed is for governments to start talking to the organizations representing freelancers across Europe and the United States and find meaningful policy improvements to ensure individuals aren’t the ultimate losers from the shift to an on-demand economy.