The Gig Economy and Outsourcing: A Dark Net of Near Slavery

As a writer, it is a continual source of vexation for me to be offered work where the negotiation for payment ends in, “We don’t have a budget to pay our writers,” or “We are working on a plan to start paying writers,” or, my all-time favorite, “But you can put on your CV that you have written for us.” I have received such responses and variations on these remuneration-avoidance themes from editors across the publishing world since becoming a full-time writer after years as a university professor. Sure, I was thoroughly warned by friends in journalism that since the rise of the blogosphere in 2005, when HuffPost launched its unpaid contributors’ network, many writers were being laid off at newspapers and magazines and that budgets for paying writers were fading away.

Unsurprisingly, the accumulation of over 100,000 unpaid writers on the HuffPost U.S. site set up a journalistic “employment” trend which was instrumental in laying off paid writers and taking on unpaid bloggers. Many publications followed suit making some in publishing very wealthy while impoverishing writers.

As someone who was in academia when I started to blog for HuffPost, I looked at my contributions as worthwhile efforts to cover subject areas that were not widely covered by major media—if at all. I viewed access to the then-Huffington Post’s readership as a fair quid pro quo given—it had a ready-made readership and I required no economic remuneration for my human interest opinion pieces since I was handsomely paid through my university position. Back in 2012, I didn’t think of the larger picture of how my free contributions might harm the remuneration of writers whose jobs were being transferred into “volunteerships.” Another unconsidered result of this trend: Nobody thought about how this model might lead to the current era where fake news is just as prevalent as “news news” because the relative lack of authority in journalism means that news stories are not vetted or edited closely, if at all, in every case—and readers are not always able to tell the difference between news and fiction.

While HuffPost holds a large portion of blame in how its handling of journalism has helped to create the conditions for mass confusion over the viability of the news media, larger questions persist. Namely, how media approaches the responsible handling of journalism and opinion pieces and how writers are ethically engaged to undertake these assignments has not been widely addressed by the media—even if writers have felt the effects.

Today there are far-reaching repercussions of this gig economy model for writers and those in other fields who work as freelancers. While the HuffPost U.S. announced the end of its unpaid blogging platform at the beginning of 2018, the idea that writers’ labor is something that should be contributed for free (or very little) has now caught on in the commercial sector.

To make ends meet when commissions are slow, I do copywriting and content production for various business blogs and websites, which has allowed me to subsidize many of the human rights pieces I submit for progressive publications that really don’t have the budget to pay their writers.

More and more, jobs in the commercial sector have been farmed out by outsourcing websites such as Indeed, Upwork, BloggingPro, MediaBistro, FlexJobs, ProBlogger and many others. While Indeed tends to work with local talent, which keeps the job pool within a rational economic boundary, other sites, like Upwork, do not. For instance, here is a job I applied to a few weeks ago and tried to make work—until I realized that this job would, if properly executed, pay only about $30 per day:

I’m looking for an experienced writer, with in-depth knowledge of travel and photography equipment, to write review articles. For the first project you’ll be writing a total of 12 000 words spread over 10 review articles. You’ll be covering popular travel and photography equipment topics. You should be able to do your own research.

First, I did a test piece for this client whereby I spent considerable time researching a particular type of tent to interpret technical details about its every aspect, to compare those technical details to the technical details of other tents of the same caliber and then analyze this information in comparison to other tents of slightly better or lesser quality from the same and competing brands. This involved reading about a range of tents by the tent’s manufacturer and its competitors. Regardless of how much you might know about tents, there are always new products entering the market, especially in the summer.

After two hours of reading and research, I wrote up the piece, then carefully included the details that the client required: one internal link to their product website (which in a later email turned into two internal links); two links to YouTube videos, which also turned into “work them directly into the article” thematically rather than simple links to a logical keyword association; two outbound links to “useful content related to the topic discussed—but no competing websites”; and make the article both “conversational and technically sound” with reference to the researched subject areas.

This job paid $15 for all of the above for an article of 1,100 words. This came to $15 for half a day’s work, not including the back-and-forth with the client, who changed the terms of the initial assignment twice. I am an incredibly fast writer (as I am told by clients) so this job would have taken many writers far more time. I canceled the job as a result of the low fee. This was not the first time I had been offered work for what would be unlivable wages on Upwork, and I was curious about how other writers were coping with such an indefensible situation.

I visited Upwork’s community boards to learn what other writers and creatives were saying. I found a common theme; many referred to Upwork’s client offers as “slavery” even referring to themselves as “slaves.” Many translators are particularly annoyed by the current situation, finding the rates “offensive.” Others, from a wide range of fields, are perplexed by Upwork’s bidding system that pits those in the West against those who can afford to underbid (thus, outbidding) due to their geographical region. While one Upwork poster was called a “xenophobe” for his comments, the spirit of what he was getting at was easily comprehensible. Still, some view the low-paying job offers as something to ignore and move past, with one woman writing this about joining Elance (Upwork’s predecessor) in 2002:

I also used to grumble (to myself) about the cut-rate fees proposed by competitors. As the years passed, and I read and wrote books on how to market professional services, I realized that I should be positioning myself as a premium services provider to premium (usually larger) buyers. Once I started doing this, my income skyrocketed and cut-rate competition disappeared as a concern.

Regardless, this kind of “up-marketing” is largely a myth as Upwork members have created thread after thread to detail some of the crazier job offers they have seen on the platform. Their observations were no different from my own, where clients are underpaying creators and the bottom line for many hiring freelancers is simply  who will take the lowest salary. And when members complain of the guttering of wages on Upwork’s community boards, the “gurus” (longtime users) invariably are quick to inform the user that it is his or her fault for underbidding or not holding out for a higher-paying client.

From all I have seen in my months on Upwork, the jobs that pay a livable wage for those living in countries where rent is $800 per month are few and far between. Also, like most writers, I have expanded my range of commercial subjects to be able to take on a variety of genres such as writing technical specifications for solar panels, car insurance, automobiles and software, competing with writers who branch out into fields that pay more such as medical, pharmaceutical and technical writing.

The job postings on Upwork today continue down the same unlivable wage path: “Good English writer who has experience with writing e-books or article writing” for a 15,000-word e-book on stress management, which pays $250; another offer to design a cookbook cover, which states, “The cover should be uniquely interesting and attractive! I quote $20 for one cover, “including the pictures” which means the job is actually for a photographer plus designer since the photo rights would have to be signed over for the fee of $20; “help” with and a “12,000 word e-book biographies of notable icons” for $120.

And when Upwork does rely on a low-wage worker, there is often a need to have that work edited, which can mean having to rewrite the entire piece, for the same $3 an hour. Clearly, no amount of up-marketing is going to solve what is clearly the downside to globalization—that the salaries are continuing to be driven down.

Upwork is not alone in driving down wages for freelancers. For instance, MediaBistro tends to list local and competitive wages on its site. However, when it comes to much of the work involving content writing, editorial work and journalism, we see the same pattern of wages that sites like BloggingPro offer, all of which are virtually impossible for survival in the West—most especially the unpaid internships. One advertisement asks for a “professional book reviewer” which requires 350-400 word book reviews. And while $30-$35 for the completed review is far more than $3/hour, this fee includes the time reading a book. So we are back at a potential day’s worth of labor for $35 at most, even if one were a graduate of the Evelyn Wood Speed Reading Program.

There is an even lower echelon in the online job market, which is accompanied by “informative” blogging sites like Cloud Income, which suggests the cutthroat rate for content writing at “less than $3 per article” for a 500-word article, with the added wisdom to “outsource” everything. This, of course, translates to marketing sites paying people sub-par salaries; these startups make money by virtue of charging clients a premium while exploiting creatives. Sites like Freelancer and Fiverr allow creatives to set their price through project bids or a flat fee.

This spans the range of the extremely low to the somewhat higher end of the fee spectrum while pitting those with higher costs of living against those from regions with a far lower overhead. While many freelancers chalk this situation up to certain platforms that don’t care about workers, some are critical of the general climate of freelancing, and many more critique how one operates as a freelancer.

Additionally, there are a plethora of blogs whose sole function is to inform freelancers how to “make it” or to “defy 9-5” schedules. Still, no amount of the “just make lemonade” attitude will affect the wages that are being driven down by the globalized gig economy.

More to the point: How have we arrived at this particular moment in history where workers’ rights—including the ability to earn a basic living—are in decline, and the model for being employed today resembles ad hoc indentured servitude driven by the bottom line of global capitalism? While many economists have analyzed the gig economy, much of its impact slips through official figures so we have only a sketchy idea as to how this labor force, which occupies almost one-third of adults in the U.S., functions in reality.

What we do know is that much of the freelancer economy is outsourced by larger businesses that want certain projects completed without the usual responsibility employers have toward employees (i.e., benefits, health insurance, promotion, training). Hence, freelancers generally become a desirable model for businesses wishing to complete a task with no obligations toward those they hire. But do businesses have a responsibility to observe the minimum wage with these workers?

The recent federal ruling on Uber in the U.S. resulted in a judgment which declared that Uber does not exert enough control over its drivers for the company to be considered an employer. This, despite Uber having settled for a hefty sum out of court in 2016 in two class-action lawsuits. Yet, in the U.K. last November, the opposite conclusion was reached in Uber’s Employment Appeal Tribunal, where it was decided that Uber workers should be classed with minimum-wage rights.

The same argument that was used in the U.S., however, failed to convince the Employment Tribunal in the U.K. several months earlier that “personal flexibility” is valued uniquely outside the realm of any full-time job, with the Independent Workers’ Union of Great Britain stating that drivers would still enjoy such freedoms of self-employment (e.g., flexibility in choosing shifts, coffee and toilet breaks) as full-time workers.

What both cases demonstrate is a basic discrepancy between labor laws as they exist in countries like the U.S. and U.K. and the grey areas within the law where companies like Uber operate. The U.K.’s Employment Tribunal decision is now with the Court of Appeals and will affect only Uber drivers, not all freelancers.

Similar to the Uber case, job outsourcing websites and the individuals and companies that hide behind firewalls as they reap the benefits of labor are happy to cling to any narrative to justify violating the bottom line in workers’ rights: the minimum wage.

I spoke with various lawyers in employment law and the consensus is clear: The legal definition of “worker” does not make every worker an “employee” even if every employee is a worker. Seth Lesser, a partner at Klafter Olsen & Lesser, a New York law firm, and Karla Gilbride of Public Justice, a Washington-headquartered legal advocacy organization, co-authored an amicus brief on the subject of corporations using the status of misclassifying workers in order to make financial gains earlier this year [Jammal et al v. American Family Insurance Company et al, No. 1:2013-cv-00437 (N.D. Ohio 2015)]. This brief makes two important legal points that bear mentioning regarding the case against the defendant, American Family Insurance, claiming:

1. “It undervalues the amount of flexibility available to “traditional” employees, giving this as evidence from the U.S. Department of Labor, Bureau of Labor Statistics: “In 2004, 27.5% of full-time wage and salary employees, or over 27 million people, reported having flexible schedules that allowed them to vary the time they began or ended work.” And

2. “Mislabeling workers as independent contractors immunizes employers from liability for workplace injuries and harassment, while depriving states and the federal government of billions of dollars in revenue and disadvantaging responsible employers.”

In supporting this claim, this amicus brief used a report from a Minnesota auditor from 2008 which shows that “workers as employees [are] paid a 26% higher hourly rate after factoring in federal and state tax payments, unemployment and workers compensation insurance premiums than an employer who classified the same worker as an independent contractor.”

Less and Gilbride then explain what this misclassification translates to in costs: “Calculating that a construction worker earning $31,200 a year before taxes would be left with annual net compensation of $10,660.80 if paid as an independent contractor, compared to $21,885.20 if paid properly as an employee.”

The gig economy is being driven by those who seek to cut costs, and this begins and ends with their ability to wiggle out of being considered “employers” in any sense. What will it take for those of us who freelance and are at the mercy of the market forces where fees are being driven down in the current economic climate? We either must band together and agree to fees that we simply will not dip below or we must create a formal unionization.

Even so, freelancing is not going away. It is instead increasing: It is estimated that by 2020 freelancers will be 43 percent of the total work force. If things continue this way, it will be necessary for governments to intervene to ensure that minimum wages are at the very least respected lest the United States risk becoming a reinvention of its own historical outsourcing puppetry. Should this occur, Labor Notes predicts that production in Mississippi, Alabama and South Carolina will be on par with China in terms of cost-effectiveness.

As the joke goes, the U.S. may very well become “Europe’s Mexico,” but it will be no laughing matter if the country becomes home to a future of tens of millions of elderly who have no savings, no pensions and no housing.