Unemployed Rush to Freelancing Sites, Putting Pressure on Wages

Photographer: Chris Ratcliffe/Bloomberg

With millions of Americans unemployed, and full-time positions scarce, there’s a massive rush to freelancer sites — one that could result in everyone getting paid less.

Since June, more than 24,000 people — two-thirds of them Americans — got on the waiting list to join Braintrust, which offers contract projects from the likes of Nestle SA and Nike Inc. On Freelancer.com, user sign-ups from the U.S. rose by more than 30% between February and July, year over year. On Upwork Inc., client and freelancer registrations have jumped 50% since mid-March, when the pandemic hit.

“It has ramped up very rapidly,” said Adam Jackson, who runs the Braintrust network. “We are seeing people who got laid off from Airbnb recently join Microsoft. It’s being driven a lot by layoffs.”

Because of this influx of users, rates that freelancers charge may be starting to slip, at least on some sites. On Freelancer.com, used by 46 million people, pay for an average job has dropped by about 20% in the past six months — partly the result of more people competing for the available projects, according to the company.

While some skilled freelancers can still command the hourly rates of their former full-time positions, they aren’t getting benefits such as health-care coverage. Benefits add about 30% to an average salary, according to the Department of Labor.

“They are scrambling, they are hustling to find work and keep their families afloat,” said Erin Hatton, an associate professor of sociology at the University of Buffalo, who wrote a book about the temp economy. “This type of economic depression, coupled with a lack of a social safety net — that is going to mean that more and more workers will be flooding the market and willing to take lower and lower wages.”

Remote Work

That’s driven in part by Americans competing for jobs outside of their traditional, local labor markets.

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