Back in 2009, All Things D predicted that online content farms represented the face of new media. Indeed, Demand Media, one of the largest content farms, was for a brief period in 2011 valued higher than The New York Times. It seemed as though an increasingly significant proportion of freelance writers would be resigned to perpetually grinding out titles like “How to Cook a Soft Boiled Egg in a Coffee Maker” and “How to Handle an Aries Man to Move the Relationship Into Marriage” priced at $15, $25 or $30 — and oftentimes even less – for so-called content farms like Demand Media Studios.
Companies in other industries also scrambled to cut costs, outsourcing manufacturing and information technology functions to developing or emerging countries like Vietnam or India. Displaced workers settled into low-wage service industry jobs with part-time hours and no benefits. Meanwhile, frustrated professionals and artisans struck out on their own in an attempt to make a living from skills developed at their former jobs.
But a funny thing happened on the way to adoption of universal outsourced manufacturing jobs and the development of a dominant “gig” economy: people started getting hired for actual full-time jobs. The Internet environment that had driven pay continually downward for many freelance writers also experienced fundamental changes that made low paid content less financially viable. Meanwhile, freelancers began accumulating more sophisticated skill sets, especially in marketing and technology. The cumulative result: higher pay for freelancers across the board.
The “Gig” Economy
In the idealized vision of the “gig” economy, people make their living by engaging in an array of shared services. “Servepreneurs” drive other people around in their personal cars for Lyft or Uber, rent out their living spaces for people too cool (or cheap) to stay in hotels through Airbnb or run errands for people too busy to pry themselves away from their desks via TaskRabbit. It is not uncommon for providers in the “gig” economy to complete several “micro” tasks each day for different service providers. As a result, many participants in the gig economy maintain a routine of nearly perpetual motion.
If that sounds like a tough, demanding way to make a living, that’s because it is. But in an economy which in 2010 experienced five job seekers for every job opening, hustling in one-off gigs and short-term contracting assignments represented one of few legitimate avenues for generating income. Full-fledged entrepreneurs also proliferated during the depths of the recession, taking the gig model to higher levels by creating products and services designed to serve a particular market segment or fill a specific need. For entrepreneurs and gig workers alike, necessity rather than a desire to be the boss was often the major driving force.
A Reduction in the Ranks of Entrepreneurs
As the recession finally began to give way to recovery, the unemployment rate fell while the number of job openings rose. By August 2014, there were only two job seekers for every available job opening, according to the Job Openings and Labor Turnover Survey (JOLTS) issued by the Bureau of Labor Statistics. That figure is nearly equal to the 1.8 job seekers for every job opening recorded as of December 2007, the official start of the Great Recession, the Economic Populist reports.
Meanwhile, according to the annual Kauffman Index of Entrepreneurial Activity, 280 of every 100,000 adults launched businesses in 2013, a reduction from 300 of every 100,000 adults in 2012. It’s no coincidence that this reduction coincides with a reduction in the unemployment rate to the lowest rate recorded since 2010, according to Fortune. Many former freelancers, contractors, entrepreneurs and gig workers have enthusiastically returned to the full-time workforce.
Google Panda, Blekko and Content Mills
Another development intervened to change the shape of freelancing, especially for writers laboring for so-called content farms. Previously, such sites had generated tremendous ad revenue by “click-throughs” of paid ad links distributed throughout their pages. These paid ad links were often embedded in articles that frequently served as little more than placeholders for lucrative keywords.
But Google initiated a series of algorithm adjustments nicknamed Panda beginning in April 2011 designed to purge search results of low-quality content. In addition, search engines such as Blekko blocked more than 1.1 million websites judged to be “spam” from its search engine completely. These changes pushed websites perceived to offer low quality content – including several so-called content farms – off the crucial first page of results for browser searches or banished them from search results altogether.
As a result, fewer people landed on their pages. Fewer visitors translated into fewer ad click-throughs which led to reduced ad revenues. Fewer ad revenues led to drastic cuts, including reductions in available writing assignments for writers – at least for those writers who depended largely or entirely on content farms for their income.
Increased Demand Plus Better-Skilled Freelancers Equals Higher Pay
As clients and employers sought workers to update their websites or create marketing materials, many came to the conclusion that better quality was worth paying for. They sought freelancers with more sophisticated skills and were willing to pay higher wages or fees to obtain their services.
Meanwhile, many freelancers have enhanced their writing qualifications with technology related skills or social media expertise. The combination of higher demand plus better skilled freelancers has naturally resulted in higher pay.
Fewer Entrepreneurs; Better Economy?
Entrepreneurs and small business owners are vital elements of a healthy economy. Given this circumstance, one’s first impression might be that a reduction in the number of entrepreneurs is a bad thing.
But the departure of reluctant contractors to the ranks of full-time employment is actually a sign of continued improvement in economic health. Entrepreneurs who remain independent are more likely to do so because they genuinely desire to be their own bosses – not just because they can’t find “real” jobs.
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