The gig economy: Why experts say it’s time to embrace it


freelancerMODESTO — Jessica Chang Irish spends most of her week working with the Stanislaus Community Foundation, which helps businesses create charitable foundations.

But weekends and evenings, she is a public speaking consultant and helps business people fine-tune their presentation skills.

“What I really enjoy is helping people,” Irish said. “Helping people manage their fear of public speaking or speaking on camera, helping them gain more confidence so they can succeed in their business.”

Consulting is side work now, but Irish hopes to grow it into a full-time business someday.

Irish is one of the growing group of people who engage in some type of independent work, often referred to as the “gig economy.”

Companies such as Uber and Fiverr have been the face of the gig economy, but experts who have studied it, say Irish’s approach is more common. It includes part-time workers, consultants, freelancers, independent contractors and on-demand workers.

“Basically, if you’re not a full-time employee, you’re in the gig economy,” said Diane Mulcahy, whose book, “The Gig Economy: The complete Guide to Getting Better Work, Taking More Time Off and Financing the Life You Want,” was just published.

According to Mulcahy, who teaches a course on the gig economy at Babson College in Wellesley, Massachusetts, we are in the middle of a sea change in the way labor works. Workers can no longer expect to rely on the security of a full-time job because of outsourcing, downsizing and automation.

“Unless you’re a tenured professor, no job is secure,” Mulcahy said.

According to a study released in October by the McKinsey Global Institute, 162 million people in the United States and Europe are involved in some kind of independent work. That’s 20-30 percent of the working age population.

Workers in the gig economy are diverse, demographically, but fall into four groups:

Free Agents, who choose independent work and make their primary income from it; Casual Earners, who choose to supplement income; Reluctants, who derive their primary income from independent work but would prefer traditional jobs; and the Financially Strapped, who do independent work out of necessity.

Mulcahy says there are good reasons to embrace the change rather than fear it.

Independent workers are in demand, she says, while full-time employees are the workers of last resort. Companies increasingly don’t have to create jobs to get work done; they can hire a freelancer.

Partly because of the Valley’s proximity to the Bay Area, freelancing is becoming increasingly popular, according to Stanislaus County’s Small Business Development Center Director Kurt Clark.  He says, of course there is work for coders and app developers, but other workers find jobs, too.

“There is a surprisingly large number of young folks who are generating income revenue in the broader technology marketplace,” he said. That includes graphics designers and workers who maintain databases.

Being an independent worker can give you control over when and where you work. That is the draw for Irish, especially when she and her husband have children.

“I am looking forward to the freedom and flexibility to be able to ideally, one day, spend time with my children. I love volunteering and giving to my community, having the time to do that,” she said. “If I can combine all that but on my own schedule, I think that would be so rewarding and liberating.”

How to get started

Mulcahy says the first step to becoming an independent worker is changing your mindset from being an employee who depends on an employer for stability and financial security to that of an entrepreneur. That is the approach the McKinsey Institute’s Free Agents take.

“Thinking more strategically about what are things that I want in my personal life and my professional life and how do I think about creating a work life and a personal life that gets me those things?” Mulcahy explained. “It’s a much more holistic and internal focus of control.”

She recommends laying the groundwork while you already have a job. Think about what you could do for side jobs, look at what skills you need to acquire or hone and build your network.

Irish had worked as a television reporter and then in a series of marketing jobs when she saw the need for public speaking coaches.

“I did a workshop for our Turlock Young Professionals group that was centered around public and on-camera speaking and it went really well,” she said. “I got great feedback.”

From there, she got help at Stanislaus County’s Small Business Development Center. She figured out how to set her rates and was given a platform for consulting with the center’s clients.

The center has consultants who can help freelancers and independent contractors develop a business plan, find customers, work out a marketing strategy and manage the business side of their business — all at no cost.

According to Clark, independent contractors often don’t realize they’re starting a business.

“One of the things I would say is a lot of these people don’t think in terms of, ‘I’m a business. I don’t want to start a business, I just want to generate revenue,” Clark said. “They need to understand that from the IRS’s perspective and the state of California’s perspective, operating as a sole proprietor, which is what most of these people are, is simply engaging in the marketplace.”

Financing the freelance life

One of the biggest questions freelancers have is what to charge for their services.

Irish studied the market and talked to her Small Business Development Center consultant. If you charge too much, you may not get any work. But if you charge too little, it may seem as if you don’t value your skills enough.

“I think so much of how we set our rates has to do with how we market ourselves,” Irish said. “I market myself as an Emmy-award winning reporter turned marketing specialist.”

She also has nonprofit rate and offers discounts or bundled services periodically.

Mulcahy says anyone who plans to make a living as an independent contractor needs to learn frugality. However, thanks to the Affordable Care Act, people don’t have to depend on an employer for health insurance, although work still needs to be done to make disability insurance more affordable.

Also, people have changed their thinking on what it means to own things. Thanks to ZipCar and Uber, owning a car is not necessary. Music can be streamed, and books can be borrowed, which makes entertainment more affordable.

“This idea that you can access things and not own them is a personal financial revolution,” Mulcahy said. “It can really increase your financial flexibility. There has been no better time than right now to have that kind of lifestyle.”



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