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Digital slavery? The net’s grey job market

The value of creative work has taken a dive in the digital economy. This is an age where unpaid internships, spec work and creative “competitions” are taking over from entry level jobs and real commissions in the media and design industries.

But there’s another layer that’s had less of the spotlight; “freelance sites” where creative practitioners across the world compete for piece work in a global, virtual economy.

Here’s how they work: A client posts a creative job to a freelance site, with a set budget. It could be a thousand photos that need retouching, a website that requires keyword optimisation for search engines or a new company logo.

Site members pitch for the job in cut-throat competition with each other, citing their credentials and the payment they’re willing to accept.

When sites like these succeed, they bring together practitioners and clients that could never have found each other before the web. A designer in Bangladesh could be paired up with a start-up in Salford. A retired proofreader in Peckham can pick up work in Osaka. These services provide a framework that enables collaboration across the ether.

But — like many emerging systems with emerging rules — they can also be gamed. It’s an environment where clients set the market prices and practitioners can find themselves exploited - as rates are driven down below industry standards.

Creative freelancers all over the world are working for peanuts per hour, thanks to the Internet.

Cottage Industry

My partner, Ruth, is an expert photographer and retoucher who has been freelancing for about 3 years. We have a small house in a small town in Yorkshire and we work from home. It’s a recently built house, designed to fit in with the old weaver’s cottages that pepper this area; houses where workers in the early 19th Century would spin woolen yarn from home before the industrial revolution.

Ruth’s office is just across from mine. Sometimes I’ll stroll across the landing to see why she’s shouting at her computer.

“What do you think I should do about this?” she said one day, flicking her hand at the laptop. There was a grainy, underexposed photo of a mannequin wearing a Chanel dress, “I thought this was going to take a day - but I’m three days in and it’s a nightmare.”

She broke down what had happened. A client had asked for 50 product images to be retouched in Photoshop. It was an intensive, expert job. The pictures had to be cleaned up, the backgrounds removed, creases flattened, lighting fixed and colours rebalanced. In some places, she had to draw in bits of dress and blouse that weren’t there.

“It’s impossible. I’m spending hours on every picture.”

The fee? £50. At the rate she was getting through them, it would have taken a full working week to complete. £10 a day.

The job had grown significantly after she’d accepted it, with the client adding on demands and revealing that the images had all been taken with a mobile phone because she “didn’t have the budget” for professional photography.

“Where did this job come from?” I asked. She showed me a freelance website. It was a UK based service called People Per Hour, but it could just as easily have been Freelancer, Guru, oDesk or two dozen others competing in the market. I decided to take a closer look at what these sites had to offer.

A short search found an online retailer prepared to pay only £1 per product image. Another with around 5600 clothing images that needed dust removal, colour correction and elements like buttons and collars realistically added. The fee was £750 for the lot. It worked out at 13p per image.

On Fiverr there are illustrators who will create a full length computer drawing from a photograph, copywriters who’ll provide you with blog posts and “professional” retouchers who’ll completely airbrush your ex-husband from your wedding photo - for a fixed price of $5.

Browsing a site called Elance reveals jobs that are a little more realistically priced - but they’re right next to jobs for illustrators, designers, technical writers and web developers posted at less than $10 an hour. It makes you wonder why creative freelancers are putting up with it. The answer is, not all of them are.

A Vicious Circle

“I’ve been freelance for over 30 years. I’d rather stack shelves at the supermarket than work for the sort of money these sites are paying,” says writer and editor Marcia McLeod, “The fact that anyone will work for these rates, whatever their circumstances, just perpetuates the belief that people don’t have to pay decent rates. It becomes a vicious circle.”

“As a general concept, I get Elance,” says copywriter Matt Press on his blog, “People need stuff done and don’t always have the time or money to source out the best candidates. But let’s look at what everyone’s actually gaining. Are job posters really willing to settle for second best? Because that’s exactly what they’re doing when they’re only willing to pay $8 an hour for a writing job.”

“The reverse bidding system seems to be one of those things that’s set up to fail,” says Press “Someone will always come in with a price that’s lower than yours.”

“The bigger picture view is that it has a negative impact on experienced people like myself,” says Kevin Maxwell, a veteran journalist and who now runs his own PR agency, Maxwell Comms, “I regularly see PR projects posted where the company is demanding immediate exposure on national titles - for £15 an hour! Those rates of pay will inevitably only attract inexperienced freelancers.”

Though 15 quid an hour would be decent compensation in many walks of life, freelance public relations isn’t one of them - especially if you’re expected to attract national coverage in newspapers, TV or magazines. It’s a trade that requires experience, contacts and skills that are acquired on the job. It needs professional expertise. As a comparison, a builder could charge between £20-30 per hour just for labouring, according to whatprice.co.uk.

When you’re a sole trader or creative business owner, your fees also pay for the hours when you’re not doing PR or writing copy or drawing book covers. The hours when you’re doing the accounts, answering emails or pitching for more work. You have taxes to find, equipment to buy, your own bills to pay and a cut to give to the freelance site.

Now imagine doing that on £6 an hour. Or £3 an hour…

Educating Clients

Why the race to the bottom? Some of the blame can be attributed to inexperienced clients; clients new to contracting who expect more than a creative practitioner can reasonably provide. In Kevin Maxwell’s example, a seasoned client - or a client willing to be educated - would know the difficulties and expenses involved in attracting big media coverage.

It’s also the nature of open markets. On freelance sites, anyone can apply for any job - regardless of their qualifications or geographical location. Maxwell suggests this can be a feature, rather than a bug.

“I think (they) can be a useful form of work for the more junior and inexperienced (ie. cheaper) freelancer,” says Maxwell, “Especially groups like stay-at-home mums.”

It’s a view that’s supported in part by Xenios Thrasyvoulou, co-founder of British freelancing site People Per Hour.

“In many cases work is built around (the freelancer’s) core income so it’s actually supplementary, and our answer back is: well, without us it would be zero. Is zero better?” said Thrasyvoulou in an interview with The Good Web Guide, “If you’re starting off you may offer work at a reduced rate to get some traction…”

When I spoke to Xenios myself, I asked what steps the site was taking to ensure that people are paid fairly.

“That’s a big question. We take the view that we’re a marketplace,” said Thrasyvoulou, “It’s like saying what’s the fair price for a gallon of milk? The farmer, I’m sure, is probably thinking that what they get paid is not fair; they work hard, it’s a tough job and so on. In the end the world revolves around market prices. The days of price setting… we’ve seen that that fails.”

“Once you have enough volume and you have millions of people using your site the price sets very fairly, very quickly. And fairly is just market price.”

There are mechanisms in place to discourage very low payment on People Per Hour. When businesses post hourly rates for jobs on the site, a warning appears if they attempt to go below £6 an hour. As a user, you can also report advertised jobs that pay low fees using the site’s feedback system.

Statistics supplied by PPH show that average hourly rates for creatives are £18 an hour on the site. This seems reasonable as a wage. But, remember, we also have to take into account that freelancers are running a business - and hourly rates don’t directly translate to income.

As an example, according to the National Union of Journalists, the minimum freelance rate for copywriting in the UK should be £33.75 per hour. That helps cover all the hours of the week the copywriter isn’t writing copy, but just taking care of business.

However, close to 5% of the sites’ users - according to PPH supplied statistics - are working for less than the UK’s minimum hourly wage. And that’s before we deduct the expenses of sole trading. Which means that for that 5%, the market price for their labour is less than UK minimum wage.

Digital Diaspora

This levelling down of fees in the freelance sector isn’t a local problem, it’s part of a global shift affected by a variety of factors. In the absence of statistics, digital platforms that enable the global advertising of virtual work appear to be accelerating that shift.

Elance produces a well-spun Annual Impact Report, claiming ethical practice and community success in a number of key areas. Among the six “Areas of Impact” are happiness (for clients and “Elancers”), community and equality. The last two address the service’s stated aims to “connect the world through work” and “level the playing field for people worldwide”. Again, the open market meme.

Under the “equality” and “happiness” area , we find the story of Sunil S. - a disabled Indian technical writer and proofreader who has been able to turn his life around working through Elance. A case study headlined “A Global Meritocracy” describes how Sunil, who was born without hands, struggled to make a living until he heard of Elance.

“I was staying in Bombay, so the cost of living was high,” Sunil says in the report, “I used to earn about $37 (in American dollars) per month with great difficulty.”

He also faced discrimination due to his disability.

“I used to be called for interviews based on my bio-data, but after seeing me I could see them sort of mentally striking me off their short-list,” he says.

In 2006, Sunil began working through Elance for clients around the world, including Canada, the UK and USA. Since then he’s completed over a hundred projects.

“I no longer need fear the weather,” says Sunil, ”Come rain or sunshine I can work and earn money to support my wife and two daughters.”

The one metric missing from the piece is how much Sunil is paid for his expertise. As it turns out, his Elance profile proves easy to find and his rates are publically displayed.

Needing $250 a month to live, Sunil works through Elance for between $6 and $10 an hour.

That’s from £3.60 to £6.00 an hour. It’s well below UK minimum wage, before we even consider Sunil’s overheads as a business owner. At the low end, it’s six times less than the National Union of Journalists recommended rate for proofreaders of £21 an hour minimum.

If it is, indeed, a global meritocracy - as the Elance Impact Report claims - why is Sunil’s labour worth so much less than a British or American proofreader? Especially when his clients are operating from the developed West?

Elance claims equality and community as “Areas of Impact”, but there is no true conference of power to providers. The pricing decisions are made by those who own the means of production; the global brand that moves its customer service to Mumbai, the phone that’s designed in California and built in China. The company that controls the global distribution platform.

The Open Market

“The more interesting questions, to me anyway, are about ‘historical value in a geographical territory’” said Clay Shirky, a professor at NYU and author of several books on internet culture, in a comment on my proposal for this piece.

“That’s what’s breaking down, in part because markets take no store of history (who cares what tomatoes cost yesterday; here’s what they cost today) and in part because geography is increasingly less an organizing principle for modern life.”

And I agree. The digital flux cannot be challenged or steered - but it is the already powerful who benefit most as history moves on.

Pioneered by British Airways in 2004, overseas call centres in India and the Philippines serving the UK grew rapidly in the 21st century’s first decade. The smart money in mass production moved to China during the same period, which is following a path travelled by Japan in the ‘60s towards swift cultural transition. China is projected to take pole position in the economic F1 by 2030.

These markets had success because they were cheap in relative, global terms. The businesses using them do so to cut their own overheads, in economies that are yet to develop. The overheads they cut? Salaries. The money that people need to live.

“If people have a high cost structure it’s their job to reduce it. It’s what every company does,” Xenios Thrasyvoulou said in our interview, “If it means you have to relocate, you relocate. Dyson, one of the flagship companies of the British economy moved their manufacturing to China. Is it because they don’t like Britain? No.”

What about sole traders? Individuals can’t relocate quite so easily.

“Then they shouldn’t compete,” said Thrasyvoulou, “They should get another job or do something else with their lives.”

Mind the Gap

Some saw this coming, like a tidal wave of zeroes and ones.

“The factors that determined where economic activity were once simple,” said economist Frances Cairncross in 1997’s The Death of Distance, “Now, a rising share of the rich world’s output has become ‘weightless’.”

In a weightless or virtual world, the text goes on to ask, where does the market go? Even then, the writing was on the wall. With the freedom to locate - business goes where it’s cheaper to do business. Overheads fall, including wages - and profits increase. And this has a global affect on what people are paid.

“Between countries, incomes will become more equal,” said Cairncross, placing longterm faith in the free market, “Within countries, they will become less equal.”

Intrinsic to this is the belief that the economy will steer itself; that it will find its own level and everyone will benefit.

Eventually.

But while some are still content to trust the future evolution of our world culture to the digitally facilitated whims of the free market and the fickle corporations that surf it, others suggest that emerging inequalities are unsustainable; that we are heading for a crisis in the global economy as tangible as climate change.

Thomas Piketty’s recent book Capital in the Twenty-First Century empirically tracks a rise in income inequality during this and the last century, linked inextricably to a boom in capital wealth among the very rich.

The book doesn’t concentrate on just the traditional big economies either. It analyses the growing capitalisation of former developing nations and 21st Century industrial powerhouses, like China and Russia.

“I saw a pattern begin to emerge,” Piketty recently told The Guardian, “Capital, and the money it produces, accumulates faster than growth in capital societies.”

The outcome is that poverty grows in tandem with capital, establishing a bitter legacy; roaming, global exploitation - on a scale so vast that the entire system is in danger of collapsing in on itself. The death of distance is a key factor in this acceleration.

“We will all be poorer in the future, in every way,” says Piketty, “and that creates a crisis.”

Piketty calls for changes in taxation as one way to close the gaps. Economist and former editor of The Observer Will Hutton explains the choices in The Guardian - saying that the solutions are so radical that we are not yet ready for them.

“A top rate of income tax of up to 80%, effective inheritance tax (…) and, because the issue is global, a global wealth tax.”

The Iron Triangle

But Hutton also suggests that, at grassroots, there’s still evidence of an “inherent sense of human justice”; a few pockets of resistance that could pave the way for our acceptance of these radical solutions.

We can see it anecdotally, when a London based company posts a job online with a budget of £6, asking for 22 images to be retouched to magazine quality. The comments below incredulously ask whether the fee is per photo or per hour - when it’s actually the entire budget for the job. People are still questioning injustice when they see it.

There’s some statistical evidence of that backlash too. The migration of western business to overseas call centres plateaued in 2011, for example. In 2013, several major companies, including Google and Apple, began moving their manufacturing and assembly operations back to the US. As for freelance sites?

“I think the appeal of these sites is cooling off,” says Jon Norris, Editor of Freelance Advisor, “Businesses realise that a lower cost can often equate to lower quality work - especially for written work when many of the freelancers on these platforms do not have English as their first language.”

For the time being, the majority of British creative workers we spoke to claim they’re yet to be directly affected by the proliferation of freelance sites. There’s a recurring narrative of dipping a toe into the water and finding it too shallow. They retreat, leaving others to dredge up the sludge at the bottom of the income stream.

There’s an easy to grasp principle in project management called the Iron Triangle or Triple Constraint. Reduced to its simplest form, It theorises that any project has three immutable constraints; time, cost and scope (or end result). In any project, you’re only able to pick two to focus on. You can get a job done fast and cheap, but not well. You can have high quality delivered quickly, but not cheaply.

Freelance sites make the choice binary; fast or good, because everything else is cheap, wherever you live in the world. And, unless our governing bodies can be persuaded to accept radical solutions, it’s going to get cheaper.

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