Economists are now optimistic about the US economy, and people are already looking forward to better days ahead. While many people are still employed in regular companies, there’s a significant portion of the population that work as freelancers.
As of 2019, around 57 million Americans are working as freelancers. They are a part of the gig economy that connects skilled professionals with businesses that don’t have much of a budget for certain projects. While freelancing offers a lot of advantages, it also has its own set of disadvantages. Let’s take a look at the pros and cons of working in a gig economy.
The following are the advantages of working as a freelancer.
Working as a freelancer means you don’t have anybody looking over your shoulder and checking everything you’re doing. You have the independence and are normally given a task to do before being left alone to work on it.
Once you’re done with the task, you send your work to the client, who will accept it or give it back for revisions depending on the type of contract you have. But for the most part, you can complete the task any way you see fit.
Flexibility is another advantage you get from working in a gig economy. Unless your client has a specific schedule for you to follow, you can any time you want to. Some freelancers work on a weekend while others work at night. This flexibility also allows you to work anywhere in the world. Due to this, you can find many freelancers working anywhere as long as there’s a stable internet connection.
Another significant advantage of working as a freelancer is the pay. More often, freelancers receive a higher payout compared to working in an office. This is mainly because the client doesn’t have to pay for their benefits or health insurance. While there can be a few clients who pay less, freelancers can opt to look for clients who give higher remuneration for the skills they can offer.
Availability of Jobs
The gig economy offers a wide variety of jobs that anyone with the right skills can do. These jobs can range from writing, web design, medical-related coding, social media management, and many other jobs that people can do using a computer and internet connection. To sum it up, the jobs available in a gig economy are anything you can do on a computer.
The following are the disadvantages of working as a freelancer.
Lack of Benefits
One of the biggest disadvantages of working in a gig economy is the lack of the benefits you normally get from working in a company. Since you’re not a full-time employee, you’re not entitled to receive the benefits the company offers.
Due to this, you need to include in your budget your health insurance, retirement plan, and other things you need in the future. Good thing the remuneration you get can cover all of these. But you have to do the footwork yourself.
Even though gig workers can choose the time and place they work, they can be isolated since they don’t have anyone to socialize with. Unlike in an office setting, freelancers typically work independently, either at home or at a remote site. To alleviate the isolation, some freelancers work at a coworking zone or even a coffee shop to interact with other people. But in the end, they are typically left to their own devices.
Since freelancers are not regular employees of a company, they don’t normally deduct the taxes from their paycheck. This means freelancers should work on the taxes themselves. Each time they receive their pay, they should set aside a portion for taxes. They can pay the taxes quarterly since the Internal Revenue Service (IRS) divides the year into four payment periods.
While the IRS allows deductions associated with the work, freelancers should be careful with these deductions. To ensure they can make the correct deductions, they can hire an accountant to work with them when tax season comes.
Gig workers have a lot of jobs to apply for, but these are many project-based jobs. So, when the project is done, the contract will end. This makes it necessary for freelancers to always work on finding the next gig. Additionally, they should also be ready for any changes in the current project they’re working on. It would be good if the change is a salary increase or an extension of the project. But the client can end the project early or implement a salary reduction. The idea of this makes it quite stressful for some freelancers due to the unpredictability of the situation.
If you’re thinking about looking for freelance work, you should consider the advantages and disadvantages of the gig economy before committing to it.