Why It’s Time To Raise Freelance Rates
Wages are rising. The costs of living are rising. So what are we going to do about freelance rates?
Hopefully, we don’t let them fall behind.
At the end of April, wages and salaries were up 2.7% year-over-year, and economists are projecting another increase for the second quarter, reported Reuters.
Why are workers earning more? Because they’re scarce and businesses are struggling to attract and keep them.
In the United States, 4 million people quit their jobs in April, a record-breaking number for a single month.
Of those still employed, 65% are thinking about quitting, according to a survey from PwC.
Then, you have all those folks who aren’t working and plan to hold off as long as they can.
I’m throwing all of those numbers at you to show that companies have a serious dilemma–there’s a labor crisis.
Because of that labor crisis, we’re in a workers’ market, which means a lot of the power has shifted to the working class.
Anyone who has skills and time can demand more for both. And that’s what they should do whether they’re employees or freelancers.
But the reality is many freelancers are still clutching to crumbs.
They’re still afraid to negotiate. And they’re definitely afraid to say, No, I’ll have to pass or I’m raising my rates.
That needs to change for our short-term and long-term interests.
Low Freelance Rates Could Feed A Harmful Narrative
There’s no valid reason for freelancers’ income to stall or fall behind in a rising market like the one we’re in. With the tide, our fortunes should rise too.
If our earnings don’t go up along with everyone else’s, it’s going to fuel the pro-employee movement that’s been gaining steam in recent years.
Politicians paint us as a powerless, exploited pool of labor that drives the continuing cycle of poverty.
If freelance income lags in a hot labor market, it’s going to funnel fat to the fire in those who are pushing for government intervention.
Low Freelance Rates Can’t Be Justified
We all have to pay our dues and get a foothold, but in general, low-balling, particularly in this market, is just bad business.
In the freelance writing world, for example, the days of the $10 and $20 article should be dead.
No one can crunch the numbers on a $20 article in 2021, and have them make sense.
Yes, $20 an hour may be a decent wage for an employee in many areas. But as a freelancer, you have to consider what has to be deducted from that rate.
The self-employment tax that a company pays for an employee, you must pay for yourself. The costs of equipment that the company buys for an employee to do the job, you must buy yourself.
Then, there is what’s left for you. The cost of living is upward bound. If your income doesn’t rise, you’re placing your quality of life at risk.
Furthermore, even if low rates can be defended in some markets, they don’t make sense in this one. Businesses across the spectrum are paying more for everything else.
To make anything, to get anything, to transport anything around, we all have to pay more.
So, if all other businesses are raising their rates, why can’t you?
Don’t Psych Yourself Out
A lot of freelancers feel that they don’t have leverage.
They fear that if they refuse what’s offered, quote a rate that’s too high, or hike rates, they’ll lose out. They’re scared their clients or prospective clients will go elsewhere.
In some cases, they may, but that’s part of business. Right now, it’s not a particularly painful part because options are available on both sides of the table.
Remember in many cases, companies need help more than the help needs them.
Furthermore, few of us will ever experience a market where there aren’t other options, and some will always be cheaper than you.
But if you want to be at the table as a bonafide, sustainable, and growing business, you can’t concentrate on collecting scraps off the floor.
And I’m not just talking about freelancers who are at the bottom of the pay scale.
Everybody should be able to earn more in this market.
If you’ve been charging $200 per article for the past three years. This is the time to start moving the needle higher if you ever plan to do it.
Granted, you may not get more money from the clients you have, but chances are good that you can get more from somewhere.
If you’re too scared to ask for what you’re worth right now or too scared to turn down a bad offer in this market, fear will always run you.
Because if you don’t believe this is the time aim for better freelance rates, when is the time?