What I’ve Learned About Government, Big Banks And Consumerism

As a freelancer, the state made me feel like an economic outlaw

When my three daughters were little, I would often make the trek to what they called the Big Store. It was about a mile from our condo in New Jersey. Sometimes, I’d push them all in a triple stroller in a slow-moving caravan, through filthy streets littered with broken glass, past the bodegas and botanicas. The girls often chatted or sang, barely stopping as we walked by a drunk passed out in a doorway or a drug addict yelling obscenities from across the street. It was as if we were marching from one side of the economy — where everything was neat and organized, and no one got hurt — to the other — where nothing was predictable, and life was harsh and brutal.

The Big Store was a musty, cavernous thrift store. In the summer, it was cool and dark inside. I used to frequent it long before I had kids, when I was fashion editor at Women’s Wear Daily. Sometimes, I would run into fashionistas from New York City, who said it was their favorite place to shop because it wasn’t picked over and had great vintage clothes.

My three girls outside of our house in Jersey City.

But things had dramatically changed by the time I went there with my kids a decade and a couple of jobs after my stint at WWD. I had started a freelance writing business in October 2007, and I needed to put any extra money toward keeping a financial cushion for us. This time, instead of vintage clothes, I needed to replace the ones that my girls had outgrown.

I had plunged into the freelance life without really knowing how to build the type of business that could substitute for my corporate job. I was used to being able to buy organic cosmetics at Whole Foods on a whim, and take trips to Machu Picchu and Tahoe. We had the confidence that the direct-deposited pay from my former employer would arrive in my bank account every two weeks.

But now, we were living a more precarious existence. With my husband Bob working as a self-employed real estate appraiser, neither one of us had a regular paycheck. We now had to buy health insurance that cost almost as much as our mortgage. If we weren’t disciplined about our spending, I would have to go back to the corporate world and leave my girls behind. There was a big learning curve to building the life I wanted, and it took a full six months to create a full-time business.

Then the Great Recession hit. Many of my clients started paying me late or taking work I had been doing in-house; meanwhile, the real estate market was collapsing, which affected Bob’s business. I often woke up in a panic, wondering how we would pay our bills. The Department of Labor might investigate if an employer didn’t cut workers’ paychecks for months, but when you’re a freelancer, there’s no one to protect you.

That period taught me something important: The moment you step outside the way people are supposed to work in the U.S. — either because that model doesn’t work for you or because you’ve lost a traditional job — you get cut off from the country’s support systems. Never mind that our culture reveres entrepreneurial heroes like Mark Zuckerberg. Depart the W-2 world, and you become a sort of economic outlaw. You don’t get access to unemployment. But you still have to pay taxes like everyone else.

No one should start a business if they can’t handle the financial risks that come with going out on your own. But I slowly concluded that even hardened risk takers might take issue with the economic system the way it exists right now. Choosing independence means you become a second-class citizen.

Maybe this is by design. Employment attorneys have told me government historically hasn’t wanted more people to join the 1099 economy. It is easier to siphon taxes directly from an employee’s paycheck than to get independent workers to pay the state later.

When we moved and applied for a new mortgage, I had built a steady income from retainer clients, and we had high credit scores. Still, it took months of submitting copies of every check deposited in my business bank account — no matter how tiny each payment was — to prove my income. We finally got approved, but it illustrated how unfriendly the banking system was toward the self-employed. A few years later, I understood one of the reasons why: Banks often outsource mortgage applications to business process outsourcing firms overseas. The BPOs use automated programs designed for W-2 workers, and 1099ers’ applications generally need some manual processing. We were messing up the banks’ plans to save money by automating.

There’s a massive tradeoff society makes by ignoring the needs of free agents. According to a new report from the U.S. Government Accountability Office, 40% of the working population now does contingent work, ranging from part-time jobs with unstable schedules to running small businesses. That means a lot of Americans are teetering on a very skinny branch, where sudden economic gusts may disrupt their incomes and derail their lives.

For me, the benefits of freelancing far outweigh its drawbacks. I love the work I do, the interesting clients, and the independence. It’s great to be able to tailor my work schedule around things I want to do with my family when they’re home from school, like daytime trips to the beach and the Rubin Museum in Manhattan.

Now that I have fine-tuned my business model, I’ve also found I can earn far more on my own than in a corporate gig. It’s made me realize how underpaid many workers are, relative to what they actually contribute — and how unaware of this most of them are.

At the same time, I’ve realized that if you want to go independent, you have to rethink your relationship to consumerism. My income or Bob’s could potentially plummet at any time. The more you can save, the easier it is to stay free. That is why I suspect consumer spending hasn’t come roaring back in a way that would really buoy the economy. More people are becoming free agents — not always by choice — and they think like me. We’re not part of a world where severance pay or unemployment gives you some breathing room if the music stops. We’ve got to build our own safety net.

A few days ago my youngest daughter remembered our old journeys to buy clothing and asked me, “What was the Big Store really called?” I told her Goodwill, but remembered later it was actually the Salvation Army. The name was just a name to her, with no particular meaning. But she recalled having fun riding in the aisles of that grimy store on a Barbie skateboard she found there. That’s what I want her to remember — the fun. That was the reason I went freelance.

Illustrations by Anna Vignet

Work: Reimagined is a series of stories dedicated to exploring the evolution of the workplace.