How the COVID-19 Pandemic May End Up Changing the Job Market Forever
A lot of research on the COVID-19 job market is focusing on how the virus is putting hourly hospitality workers out of work. However, it turns out that there are also some broader, more long lasting changes. Experts predict that the COVID-19 virus may end up permanently affecting the way people view jobs.
More and More Workers Are Turning to Freelance
As the pandemic continues to grind the nation's economy to a halt, more and more fields are being affected. In addition to waiters, clerks, and entertainers, many white collar jobs are also starting to layoff employees. How are people handling the sudden lack of a job? New surveys indicate that people are turning to freelance work at an astounding rate.
A study from Upwork found that two million Americans have started to freelance in the past year. This is a surprisingly sharp rise. In 2019, only 28 percent of people in the nation freelanced full time. In 2020, 36 percent of people have started relying on freelance work as their main source of income. This is happening as more and more people find themselves desperate to make money without any companies hiring.
Experts Predict Freelance Workers Will Continue After the Pandemic Ends
Freelancing might seem like a temporary solution, but many people in the industry are thinking it might actually be permanent. Labor economist Julia Pollak explains that even in areas where the economy is recovering, the number of companies seeking temporary instead of permanent workers has roughly quadrupled.
White-collar industries like communications, advertising, and human resources are realizing that it can be more economical to hire a contractor for a single job instead of hiring someone permanently. At the same time, many workers are finding that the flexibility of freelancing is more convenient. With the rise in tools like Zoom, remote working is now more feasible than ever.
For several years now, experts have been talking about the rise in the "gig economy." Futurists predicted that the nation was moving towards a job market where almost everyone was a free agent, finding jobs with a variety of companies and individuals. Many believe that the COVID-19 pandemic is the trigger to finally tip the American economy towards this model. As one expert says, "what we thought was going to happen in three years happened in three months."
What This Means for the Job Market
This change to the job market is bound to have resonating effects for both employers and employees. Some of these changes may be positive. More companies are accepting of remote work now, which means people do not have to choose where they live based on job opportunities. Instead, they may be able to live near family, in low-cost-of-living regions, or peaceful rural settings while still getting access to plenty of great career choices. Surveys of employees often report that remote and freelance work gives them a better work life balance. When a person is their own manager, they can work on their own timetable instead of being pressured by the work culture at their place of employment.
There are also plenty of clearly evident advantages for employers. Hiring contractors can be a lot more budget friendly. It allows businesses to skip having to pay for pricey office real estate, employee benefits, or tenured employees. They can choose to hire the right specialist for every job instead of being stuck with a subpar employee full time. This can result in more diverse views and better financial savings.
At the same time, there may be some potential downsides. Companies may find that the lack of consistency can hamper their growth. Without a team dedicated to the overall goals of the company, it may be challenging to manage a business. For freelance workers, a lot of expenses like office space and health insurance fall on them. At the same time, self-employed workers are taxed at a much higher rate than their fellow full-time employed workers. This puts a lot of financial burden on freelancers. As the nation moves towards a higher freelancing workforce, it may be necessary to put more federal protections in place for freelance workers.