Freelancers Need a Basic Income
Freelancers need a basic income; hence, a basic scheme is in America’s future. America needs a basic income because most work could soon be freelancing.
In fact, 94% of the jobs created in the United States between 2005 and 2015, were alternative work arrangements, Lawrence F. Katz and Alan B. Krueger estimate. In detail, alternative work arrangements include freelancing, contracting, on-call workers, and temp work. Importantly, Katz is an economist at Harvard and Krueger is an economist at Princeton.
Moreover, 20% of America’s workers were in “alternative work arrangements” in 2017, an NPR/Marist Poll estimates. Disturbingly, 49% of those workers admit they have an income that varies from month-to-month or season to season.
Thus, a large percentage of US workers have varying income and jobs that could disappear tomorrow. Yet, traditional safety nets; like unemployment insurance, do not cover those workers.
Half of Americans could be freelancers by 2027
Things could get far worse because 50.9% of America’s workforce could be freelancers by 2027 if present trends continue.
In detail, the percentage of freelancers will hit 50.9% in 2027 if the present growth in alternative work arrangements continues, the Freelancer’s Union calculates. To clarify the Union’s Freelancing in America Survey estimates the number of U.S. freelancers grew by 8.1% between 2014 and 2017.
Moreover, the number of U.S. freelancers increased from 53 million in 2014 to 57.3 million in 2017, the Survey estimates. Plus, the percentage of part-time freelancers fell from 59% in 2015 to 53% in 2017.
Thus, tens of millions of Americans are part of the gig economy, yet we did not design the safety net for it. Disturbingly, a large percentage of those people have nothing to fall back on if the freelance gig vanishes.
How Basic Income could help freelancers
A basic income scheme that pays a flat amount of $500 or $1,000 a month to every citizen could serve as a safety net for the gig economy. In particular, such a scheme could help people whose income fluctuates from month to month.
Importantly, such a scheme will pay enough to help people in emergencies; but not enough to serve as an alternative to work. Moreover, we can set such a system up without an expensive new bureaucracy. Instead, apps or cryptocurrency could pay every recipient cheaply and efficiently.
Why Freelancing is our Future
Freelancing is our future because it is more efficient than traditional jobs. Notably, they usually pay a freelancer only for the amount of work he or she does.
On the other hand, most modern jobs do not provide a full day’s work even though they pay most employees for a full day. For instance, I have held many jobs over the years; including accounts payable clerk, security guard, retail associate, newspaper reporter, and I did not put in a full eight hours of work in any of them.
In fact, at several positions where they paid me for eight hours, yet I did less than one hour of actual work each day. Yet, they required me to hang around the office all day to get paid.
The 15-Hour Work Week is here, and that’s a bad thing
Obviously, there are jobs like retail and security work that require a person to be available even if nothing is occurring. For instance, a retail sales clerk must hang around the register if there are no customers.
However, there are many accounting, administrative, driving, factory, and technology jobs where a worker’s constant presence is unnecessary. For example, a clerk who processes a few dozen invoices a week. Thus, the employer only needs those people for an hour a day or less, yet it pays them for eight hours.
Thus it makes sense to hire freelance workers and pay them for only the work they perform. Hence, the great economist Lord John Maynard Keynes prediction of a 15-Hour Work Week is coming true.
Productivity will destroy your Job
In fact, productivity in office jobs increased by 84% between 1970 and 2013, Cebr consultants estimate. Incredibly, it takes today’s office worker 1.5 hours to do what would have been a full day’s work in 1970.
Thus Lord Keynes was wrong; the modern office worker works 7.5 hours a week. Yet that office worker is probably on an eight-hour a day schedule designed for a 1970 workload.
Therefore, the 15 Hour or less work week is a reality in many jobs yet most employers have not realized it. However, there is a cheap and efficient means of transitioning jobs from 40 hours to 15 hours of work: contracting. Turn the job into a contract position and you can quickly reduce the work week to 15 hours.
The 15 Hour Work Week is here but we don’t see it
Unfortunately, they did not design most jobs for a 15-Hour Week. In response, employers either reduce the number of workers; or try to force a 40 Hour work week on a person working 15 hours a day.
To make matters worse, our culture values workaholics. Thus, many people, including; some lawyers, investment bankers, etc. lie about the amount of work they perform.
One obvious reason these people lie is to keep their jobs. To explain, the workaholics fear they will lose their jobs if the boss learns they are working less than 40 hours a week so they lie.
Many others are probably lying because they get paid by the hour. For instance, attorneys bill their clients for each hour of work so they have a strong incentive to “work” as many hours as possible. For example, a lawyer takes 30 minutes to research a matter but claims the task takes several hours.
Meanwhile, businesses can bypass that debate by hiring freelancers. In particular, new businesses can avoid the problem of the 15-hour work week entirely by outsourcing all the office work to contractors.
We need a Safety Net designed for the 15-Hour Work Week
Thus, we need a safety net designed for the 15-hour work week. I envision such a safety net as a combination of a beefed-up Social Security system, Single-Payer Health (Medicare for All), and a basic income for those making under $60,000 or $100,000 a year.
Such a system will be far from perfect but it will meet the needs of a population working 15 hours a week at part-time gigs. We will need such a system soon because the digital productivity explosion in office work is coming for almost all jobs.
In addition, algorithms can perform many tasks like billing, accounts payable, editing, writing, accounts receivable, and invoicing digitally. Thus, the “office” could soon be a nostalgic memory.
The Gig Economy is coming for Everybody
Thus, most of the employees in the 1970s office; the file clerks, mail clerks, copy machine operators, secretaries, accountants, payroll clerks, receptionists, bookkeepers, etc. are now redundant.
In addition, similar revolutions are wiping out other paper-based industries like insurance, investment, banking, and newspaper and magazine publishing. Moreover, the digitalization is spreading to the factory floor, the machine shop, and beyond.
In fact, companies like Aitheon and SyncFab are pioneering digital technologies that will enable workers to operate a wide variety of machinery remotely. Aitheon’s technology could even operate mining machines, cars, trucks, or earthmovers by remote control. Thus machinists, machine tool operators, miners, factory workers, and heavy equipment operators could soon join the Gig Economy.
Therefore, the 50.3% freelancing by 2027 prediction is realistic. However, our leaders and employers are unprepared for this reality.
Two Responses to the Freelance Economy
We have two responses to the freelance economy before us. First, we can try to force the economy back to the 20th Century by legally mandating eight-hour-a-day “jobs” for everybody.
Disturbingly, many Democrats propose exactly that with their ridiculous jobs guarantee schemes. To explain, under the jobs guarantee the government provides everybody with a “job,” but not work.
Or second, we can create a 21st Century Safety Net designed for realities of a 50.9% freelancing rate and a 15-hour work week. The second choice will not be popular; at first, but it is sustainable.
America will soon be a nation of freelancers. Under those circumstances, America will need a basic income.