Is anyone else seeing the trend toward a higher percentage of freelance workers in both post and production, directing and writing, than staff? We have seen even our larger corporate in house slim down the staff in favor of freelancers. And the market is crawling with every type of freelancer from 19-28 years old. Most don't have real businesses, just a social security number, but some do. I've also seen a couple larger well established production houses downsizing and not replacing workers in favor of freelancers and lower staff salary and benefits.
Is Obamacare partially to blame and the increasing cost of benefits, or is it more of a trend toward freelancing because cost of entry is low and there is a lot of work?
Insightful replies only!
Tilt Media Inc.
Video Production, Post, Studio Sound Stage
It probably varies a lot by location. In Los Angeles, for example, staff gigs are rare (and have been for decades). Some places run 'permalance' (hiring 'temp' employees and keeping them on indefinitely because they don't get staff benefits) and others misclassify freelance employees as contractors (1099) so they weasel out of payroll taxes.
It's not healthcare specifically, (that's just a handy excuse) but a trend that's become well-established in IT industries and beyond to the wider business world. It's called: "The Gig Economy".
It's not new; businesses are trying more than ever to reduce all human capital costs and offload as much responsibility for their workforce as possible, so yes, freelancers and contractors are becoming more and more the norm, and there is no more "social contract" where a worker trades time and loyalty for steady compensation and benefits. Shareholders do not care about such things, only profit.
On the employer side, it maximizes workforce flexibility, allowing for fast growth or reductions in workforce to suit business conditions. Expanding? Plug in some temps and get cracking. Bad quarter? Drop a few dozen or hundred heads, watch the stock price go up. Every time. A complete commoditization of human capital, which forces keen competition that keeps wages low, and benefits, thin. It's not that great a deal for the workers, because it creates chaos, uncertainty, and instability when the income stream is unreliable and prone to interruptions when the gig dries up and you have to go find another one. It reduces the value and thus the bargaining power of a worker negotiating their compensation, because someone will always be a little more desperate than you, and willing to undercut your price for what you do. It end-runs around Organized Labor and the worker protections and policy oversight it can provide, when workers are all individual bargaining units and not a collective, creating a ripe environment for abuse without complaints or consequences. And you're more or less completely on your own for managing the health care, insurance, and retirement savings, again without much bargaining power because you're an individual.
Optimists thought that global trade agreements would spread American values, work practices and compensation levels to other nations, third-world nations, raising the standard of living for people everywhere. My observation of what's actually happened is that the low-wage, anti-worker policies of those nations are more and more getting established here instead, forcing a race to the bottom here at home. Like a foreign missionary "going native" and abandoning their faith.
But on the bright side, hey; "shareholder value", amiright?
I don't have an answer to fixing it. And I think it will get worse before it gets better - if it ever does get better, because IMO business has gotten too embedded into government and law, which ordinarily would be the gatekeeper and referee for these things. I hope it can be again.
I find this fascinating. I was a 'staff' worker at several different TV stations.
I had several different positions, producer, director, videographer/editor...
but a couple things were always the same no matter what my position was.
Crap pay, and long hours. As a freelancer, I make a lot more money, and
have much shorter hours. Nothing is 100% in life, but it's about as close
to 100% as is possible that I will never go back to being 'staff.' You are correct
that plenty of organizations have gotten rid of 'in house' video teams, often
because they didn't have enough work for them (and really these in house
positions were created without taking into account the realities of business
and probably should never have been created in the first place). So maybe
instead of paying 3 people $40,000 each per year, this organization can hire
a small video company like mine ten times a year and pay $30,000 total.
Now let's say I get 3 or 4 of these types of clients. Yeah, it's a lot better living
than working as a staff worker. I don't need 'organized labor' because I set
my own rates. Sometime prospective clients think I cost too much. Those are
not generally clients I'd wish to work for so no real loss. Of course these are only
my observations from my perspective and I understand that it's not the same
everywhere. But there are certainly some of us who are freelance 'by choice'
and are not being 'abused.' If anything, I feel sorry for all the staff workers I see...
their yearly salary is pretty low and they work a ton of overtime just to make
A freelancer HAS to charge "more"; they need to also cover all the things a salaried person's company covers for them: the health care, insurance, taxes, etc. so a freelancer's bill is going to look "padded" if they are doing things right, but otherwise they may be working for about the same amount as the staffer, once you take out all those extras.
If you freelance and don't include that overhead in your bills, you're actually working for less than the full-time staffer.
Trust me, I know. Health insurance, IRA accounts, both portions of social security
(Employee's and Employer's), self employment tax...the works. Still doing much,
MUCH better as freelance than staff. Not to mention quality of life issues. Like
being able to take off from work in the afternoon to watch my kid's softball or
basketball games......because I don't have some boss who not only wants
me there until 5, but is wanting me to work overtime as well. No thanks,
not interested in a staff job at all, been there and done that. I actually
own a house instead of renting now, it's not even close.
Between independent contractors and staff employees there also sit freelance/temp employees. Almost every editing gig out here in LA is for a temp/freelance employee. I know some editors that form an S-corp and then loan themselves out to work on productions, but I'm hearing about fewer and fewer production companies willing to do loan outs. For a number of years the state has been cracking down on employers initially misclassifying employees as ICs so production companies only hire people as employees (freelance/temp, not staff) so there's no gray area that might attract the state's attention.
At least in LA I've noticed a pattern where Company X starts out paying a third party/IC to make their videos and then they need so many videos that they create an in-house, staff video team to get costs under control. After they build out the in-house team they realize that they don't need all these staffers all the time, and it's getting quite expensive, so they lay off all but a skeleton crew and the hire freelance/temp employees as needed. Some of the 'temp' employees actually end up working there for years (known as perma-lance) but they never get any staff benefits because they aren't technically staff. The Company then gets the great idea to categorize their freelance/permalance/temp employees as ICs so that they can save even more money by not paying payroll taxes. Eventually this gets back to the proper authorities at which point the company hires the freelance/permalance/temp as full time staffers.
But they know they don't need all these staffers all the time, and it's getting quite expensive, so they lay off all but a skeleton crew and the hire freelance/temp employees as needed...
There's also the economic effects of the "digitization" of labor in this era.
It was at least 4 years ago, I was reading about how an editor friend in LA, works till 5pm, then his files go up to the cloud and are accessed by the sound team in Spain, who do the audio work - and send them back ready for the editor the next AM.
That started me paying attaching to global workforce issues.
And yep, I can start a gig on my 8 hours in the Mountain Time Zone, pass it off to a colleague in England who puts in his 8 hours - on to one in Australia who puts in the next 8 hours - and it returns to me having had 24 straight hours of progress with nobody having to work any overtime.
If anyone can explain to me how this doesn't make business sense, please let me know.
And YES, the tendency will be for whoever has oversight control over this process offer the lowest reasonable wages required to get decently qualified global workers in a scenario like this.
This isn't theoretical, it's the REALITY we're living in.
Each of us will eventually be competing with ANYONE, ANYWHERE that has similar skills and high speed internet access. Unskilled labor will go to the robots. The rest to knowledge workers. And knowledge is cheaper and more accessible than ever.
That's why we're likely going to lose out in the US if things continue to go like they're going.
Not because we don't have some kind of silly wall keeping BODIES out - but because we haven't shifted government thinking to prepare for this coming tectonic economic shift.
We've already utterly wasted at least two decades of planning time screwing around with bombing peasants and not making high speed internet cheap and available to everyone so that our best and brightest kids can build global connections and reputation capacity.
My wife is a former large school district instructional specialist and her part time gig economy hustle is NOT training US citizens for the coming digital era - she's contract teaching English to little kids in Beijing via telepresence.
Some nights I wake up worrying that the US is rushing headlong into the new DIGITAL DARK AGES.
My current Cox high-speed internet (plus TV) package runs me $300 or so a month. I consider it a necessary business expense, but it's now MORE than I pay for my electricity.
We're moving to SoCal in a few months and if I want to just keep even in the data access space, housing costs that are ridiculous because I'd have to live where the fast internet gods will allow me to live - not where I might want - unless I can live with a significant data access downgrade.
That's just STUPID in a nation trying to complete globally.
I freaking MISS Al Gore.
At least he had his eye on the REAL ball 20 years ago, when this should have actually been effectively addressed.
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