The PRO Act is likely part of President Joe Biden’s $2.25 trillion infrastructure plan. According to Rep. Bobby Scott (D-Va.) “We expect the entire PRO Act may well be part of it”.
Since it passed the House on March 9th, the PRO Act has seen waves of support and opposition from both ends of the political spectrum. The New York Times calls it “the most significant enhancement of labor rights since the New Deal”. Senator Tim Scott (R-SC) calls it an “anathema to the future of our nation’s small businesses”.
But there’s been a lack of coverage from those impacted most – the freelancers themselves.
This article will change that.
The Impact of the PRO Act
The PRO Act won’t stop the freelance economy. The freelance economy is global, growing exponentially, and “with a GDP of $4.2 trillion, freelancers make up the fourth largest economy in the world” according to Stefan Palios.
It will shift the control of the freelance economy from freelancers to intermediaries – specifically unions, government and corporate (corporate predominantly in the form of staffing firms, agencies and freelance platforms).
The promise of the freelance economy is that it democratizes self employment by replacing intermediaries with software. But the PRO Act threatens to bring back the need for intermediaries by increasing legal exposure for companies to misclassify workers.
Companies will still hire freelancers. But rather than hiring freelancers directly, they will hire freelancers through intermediaries. Which undermines the very reason journalists like Kim Kavin freelance in the first place.
According to Kim, “Being a full-time freelance writer and editor means I am running a small business. I have my base of clients that I choose, and that I can provide more or less services to at any time. I negotiate the contractual terms of my business dealings with them, including my rates. Then, I complete the projects on my schedule, whether I choose to do the writing and editing at 8 a.m. or 8 p.m. on any given day. Why on earth would I want to layer another person or entity in between my clients and me? If I wanted somebody else telling me what to do and how to do it, or how much he thinks I should earn for my time and skills, I would have stayed in my staff job two decades ago.”
Kim’s not alone. In a study by and.co (chart below), freelancers leading source of work is referrals from clients and fellow freelancers, followed by inbound leads, not intermediaries.
Credit: and.co study The Slash Workers
The Freelancers Themselves
In talking with over 50 freelancers since the House passed the PRO Act, 5 major themes consistently pop up.
- Financial Safety
Here are a sample of those conversations with the people the PRO Act will impact.
Michelle Jackson, Colorado, Personal Finance
“I’m one of the hundreds and thousands of Black women who would prefer to go it on their own.”
She left a good job because of “difficulty in getting promoted beyond lateral promotions, wage inequities and not being able to have transparent conversations about them, being the only POC in a work space and not being able to exist as myself without constant exhausting passive aggressive issues from colleagues”.
Instead, she said, “Entrepreneurship has allowed me to lean into what I got penalized for in corporate. I love that I’m not in a forced paternalistic relationship with an organization that I don’t want to be a permanent employee of…because I don’t want to be an employee.”
In terms of the PRO Act, she said, “Don’t discount how angry and frustrated people are feeling about the potential of using the ABC test in the ProAct. Entrepreneurs in California lost their businesses overnight. People left the state. What will happen if it becomes the law of the land as it’s written now?”
Ana Gotter, Florida, Content Marketer
In April 2020, Ana lost 60% of her income with clients needing to pause contracts. But fortunately she didn’t have just one income stream.
As she said in April, “Freelancing isn’t for everybody, but I’m grateful for it, even right now when things are particularly hard. I still have 40% leftover, because all my eggs weren’t in one basket, and it’s easier for me to wrangle up a few extra projects than a whole new full-time job right now.”
As of January 2021, her income is back to pre-COVID levels thanks to a combination of new and returning clients.
Michele C Hollow, New Jersey, Journalist
“I’ve been freelancing for almost 25 years. When my son was in middle school, I’d get calls two-to-three times a week, every week, telling me to come and get him because he was misbehaving. He’s autistic and has ODD (Oppositional Defiant Disorder).”
She continues, “I truly believe no supervisor would keep me on staff because of all of the time I took off to care for my son. As a freelancer, I was able to meet every deadline by working around my kid’s schedule. Today, my son is doing better. However, my mom is 89. She’s slowing down and showing signs of dementia. I’m now her caretaker. Seriously, would any company hire someone full-time if they take off during the work day to care for family most of the time?”
Jake Poinier, Arizona, Writer, Editor, and Publisher
“Choosing to go freelance in 1999—after being in magazine publishing for a decade—was the best decision I’ve ever made. Freelancing gave me the flexibility to be much closer to my kids when they were growing up and gave my wife and me the freedom to spontaneously capitalize on opportunities that a corporate job wouldn’t have allowed.”
“Over the years, I’ve been our sole income several times, including 2020 when my wife lost her W-2 job. (Yes, due to a terrible boss.) Doing projects for 20 different clients or so every year is far more stable than being at the mercy of one boss or company that holds your career in their hands.”
“I view my clients as partners, which is why I believe so strongly that the PRO Act and ABC Test are completely contrary to smart business and economic principles.”
Kim Kavin, Journalist, New Jersey
“After nearly 20 years of earning a living this way, I could not feel more secure or happier about my choices. I went full-time freelance as a writer and editor, by choice, in 2003 after a decade as a staffer in the publishing industry. I understand my options for earning a living, and I choose to be my own boss. I earn a better income this way, and I’m far happier. There is nobody who can put a glass ceiling over my head or sexually harass me on the job. If a client is a creep, I dump him and take on a respectful one. If a client is cheap, I dump him and take on a better-paying one.”
JR Hernandez, Florida, Freelance Agency Founder
1.2 million freelancers in 2017 hired one or more employees. JR is one of these freelancers.
“As a Freelancer, I founded a business, whose core focus is to help other businesses grow all while keeping a full-time job and excelling at it. Rather than just limiting myself to a single stream of income or being at the mercy of someone else for raises and promotions. I opted to promote myself to CEO by building something that fills a need not only for myself but for my clients and other freelancers as well. I have done this on my own terms, with hard work, knowledge, skills, expertise, and risking my own money.”
In terms of the PRO Act, he says, “adding another layer of intermediaries only places additional obstacles on how freelancers and or small businesses grow, operate, and interact with current and or potential clients. In essence, the PROAct will move the entire gig-economy backward and act as a catalyst to removing the “Free” from Freelancer.”
Gabriella Hoffman, Washington DC, Media Strategist
“As a self-employed Millennial, my business potential as a freelancer is limitless. Since becoming a freelance in 2016, at age 25, I’ve seen tremendous growth that comes with this line of work. I’m not bound to one client or employer. And I love the freedom that comes with this flexibility. I’ll never return to a 9-to-5 job —even if you paid me double, triple, quadruple of what I was making now.”
She continues, “The PRO Act, however, will—simply put— kill my business and destroy the livelihoods of 58M other Americans who freelance. Being reclassified as a W2 employee , through the ABC test provision included in the PRO Act, will undermine my ability to work with multiple clients and have multiple revenue streams. And for what? Because I’m allegedly exploited by my clients? How am I exploited when I’m the key negotiator behind my contracts and am a determiner of my work scope? That’s ludicrous misinformation by PRO Act proponents. Also, the bill’s supporters claim freelancers need union protections to get health and dental benefits. I didn’t go into my line of work to focus on getting benefits. Like other business owners, I chose to be a freelancer to offer unique services and not stew over/obsess about benefits. Benefits are secondary—and even tertiary—priorities for my business. They can come with extra revenue I make in the form of monies I can set aside for myself without the aid of an intermediary.”
The impact of the freelance economy is larger than the sum of it’s parts. The freelance economy has created a path to self employment for over 50 million Americans.
As the California Black Chamber of Commerce put it, “Far from exploiting Black workers, the gig economy has become the gateway to independence and self-employment for African Americans. Whether the tool of one’s trade is a car, a trumpet, a pair of hands, or a pair of scissors, the gig-economy has opened doors of opportunity and self-reliance unlike anything seen since the golden age of Black entrepreneurship on Greenwood Avenue in Tulsa.”
Which raises a question larger than this one bill. Since the majority of the economy will freelance by 2027, how can we ethically promote a path to self employment that doesn’t threaten their ability to be independent overnight?