We’re All Becoming Freelancers And Entrepreneurs
Most people in America, Canada, Europe, and much of the rest of the work make their money as employees.
Envisioning an 'employee' involves a myriad of things...
Working in an office
Being paid per-hour for work
Getting a 4% pay raise every year
Slowly moving up a 'ladder' of some kind
Of course, many, many employees don't fit this mold exactly...
Some employees at utility companies don't spend much time in an office. They're outside fixing pipes or checking electricity meters around the city.
Some employees, like salespeople, are paid at least partially on commission rather than on a strictly per-hour basis.
But, when you combine all of the little things that loosely define being an employee, a common theme rises to the surface...
When you arrive on the job, most everything has bene figured out for them. Once accepted into a position they just need to 'plug in' to the system.
If you wanted to, you could keep taking orders from the same person for a decade and keep receiving that paycheck.
Once you settle into a position that is comfortable and where you can make a contribution, you probably won't screw it up unless you're purposefully malicious.
Even before you got a specific job, a career plan was pretty much all figured out for you.
By virtue of going to college you knew you would be able to get a job in your chosen field. You didn't know whether it would be at one of the 'big three' companies in your industry or at a smaller firm, but you knew with certainty that you'd be working up a straightforward career ladder.
The stability, the structure, the predictability... they'll lead to a very comfortable life within this system. You can get a decent salary, confidently take out a mortgage on the big house, and bring your family on a vacation once per year.
Other than the important fact that many millennials find a life of this nature monotonous and purposeless, it works relatively well at delivering an individual and their family safely from cradle to grave.
At least... that's how it used to be.
The World Is Now Unstable
For the last 60+ years, the major defining factor between being a freelancer or an entrepreneur and being an employee has been stability.
Employees had it, while freelancers and entrepreneurs didn't.
What's changing now is that this stability, taken as a 'given' by employees for so many years, is becoming shaky.
We're choosing to become freelancers and entrepreneurs because...
The idea of working as a cog in a big company never excited us that much to begin with.
In 2015... the main reason we would settle for that cubicle (stability, safety, security) isn't a 'given' anymore!!!
A college degree doesn't provide much of a head start climbing up the ladder. 44% of recent graduates are underemployed, doing work that doesn't even require a degree. If you're $100,000 in college debt, that's bad ROI and your interest payments are actually hindering your career goals.
We've all seen the news about job losses due to the recession. Millions of 'stable' paychecks disappeared and career focused individuals were forced to take new jobs for much less pay than they expected to earn. The negative effects were very, very real for anyone with a laid-off family member.
Many college students saw grandparents lose their retirement savings in just a few short months. For many, this was a wakeup call that the cookie cutter system they were stepping into many not help them achieve their goals!
When you see your grandmother living off of of bananas, apples, pasta, and rice in a small apartment, (Rationing her $875 per month social security check) you may decide to look elsewhere for career advice.
I took on an internship at a well-known research lab two years ago. Surrounded by brilliant PhD's, I kept hearing heartening statements like 'only 7% of grants get funding' alongside comments like 'if I don't get funding on this next project, I don't know what I'll do'.
It seems like even higher education doesn't guarantee stability.
Importantly, more and more of the standard job roles Americans used to think of as 'safe' are being filled by foreigners. College graduates from Bangladesh and the Philippines can telecommute from the far side of the globe. Most likely, they could manage 80% of your job role and would do so more diligently than you.
Oh, and they will work for $3 per hour.
When businesses are laying off expensive American employees and a trustworthy, hardworking, and cheap labor force is begging to work in your place, they just might be given a shot at filling your old role. Many jobs are being relocated in this way, and the new international workers are voracious learners given a little training.
This trend is already taking place, and many jobs have moved off shore, likely never to return. It's not just Nike factories anymore.
The Incentives For Freelancing And Entrepreneurship
The massive potential upsides of being a freelancer or an entrepreneur have always existed.
With the right list of clients, freelancers can charge much more per hour, day, or week than most well-paid employees and they typically have much more flexibility. (Maybe that's why over 30% of the US population now chooses to freelance)
Entrepreneurs who start companies and leverage them to build wealth make up over 70% of all self-made millionaires in the United States.
Doctors who open their own practices almost always make more than their staff even though they may have similar credentials.
Unless you go into investment banking, it's very hard to 'hit it big' as an employee.
Today, millennials who remain in the typical workforce are looking more like freelancers! Typically we'll stay in a job for no longer than 3 years before moving on to our next short term position. (Like an overextended freelancing 'gig')
We're not happy with the current status-quo, it's veil of 'safety and stability' is slipping away, and it's potential upsides don't excite us. All of this leads to the question...
Why Not Swing For The Fence?
Times of rapid change offer the largest opportunities.
Many young people are asking... "Why not play in the big leagues where I've got the chance to hit a home run?"
You'll never get that chance swinging at whiffle balls in the little league where everybody supposedly wins the 'Beachside Retirement' trophy just for showing up. (A trophy that many expectant retirees are NOT getting)
Saying you've got 'nothing to lose' by jumping into a freelance career or launching a company is writing off the upside that corporate jobs do provide. Benefits are great, pay is usually not bad either, and even in unstable times they do have retirement plans.
As millennials, however, we're largely looking for something different than this typical career narrative.
Especially with the opportunity we as individuals have to hire help for $3 per hour, it's an awesome time to get out from under the hawk eyes of a manager so that you can start using these resources yourself!
In addition, the golden cow of a 'safe, secure job' is looking more and more unstable on it's pedestal each year.
Times are changing, and the go-to option of plugging into a corporation for your career is becoming less and less of the obvious best choice.
Your dream of location independence, business ownership, and passionate living are much more pragmatic options than ever before.
Have any ideas about the changing work environment?
Tell us your thoughts in the comments below, on Facebook, or on Twitter @Nico Jannasch.