Making money online is the dream of many people — or a solution to a financial crisis. More and more people are turning to online platforms with micro jobs and crowd work booming. This form of freelancing gained popularity in 2020, especially for people who have lost their jobs and could not rely on social security in the wake of the COVID outbreak. Platforms like Fiverr, Etsy, or Upwork prove that freelancing and mini gigs are high in demand.
Platform work: short-term solution or permanent employment
Platform work is becoming increasingly popular around the world. The German economist Dr. Holger Schmidt’s Platform Fund shows how much attention work platforms receive: In contrast to many economists who focus on the stock market, Schmidt looks at platform-based companies separately, revealing trends that get lost in discussions about stock prices and IPOs.
According to his calculation, Fiverr has grown 730 percent in stock value over the past year, while Etsy’s was up 301 percent. While Fiverr connects freelancers with buyers in a direct way, talented artisans can sell their products on Etsy.
In 2019, Fiverr has already registered more than 50 million transactions. The balance for 2020 is still pending. However, work platforms have become even more popular as a result of the wave of layoffs in spring 2020 due to the pandemic. Not only Fiverr but also Upwork or Amazon’s Mechanical Turk have registered more users.
For companies, such platforms are attractive because they can buy highly specific services and pay exclusively for particular results — often at very low prices. On Fiverr, the most popular services revolve around logo design, WordPress support, voice-over, explainer videos, and social media.
Anyone can register on the platforms — certificates, degrees, and experience are no hiring criteria online. This is precisely why such platforms have become an emergency crisis solution for people who have become unemployed or are venturing into self-employment. However, Fiverr has been criticized since the beginning for pushing prices down, especially for graphic services — logo designs for less than 10 Euros are not uncommon. Crowdworkers have to work hard to stand out from the crowd and undercut each other.
For creative minds, platforms can be quite attractive because they have one significant advantage: They eliminate the middleman. For authors, the Substack platform has become very popular in English-speaking countries — it guarantees direct income based on one’s own work without a middleman chipping off a share of your revenue.
Stumbling companies, battered business models.
However, the rise of crowd workers and micro jobs may be a reason for concern. In her book “The Job,” author Ellen Ruppel Shell examined how more and more people became self-employed after the 2008 financial crisis — and also turned to work platforms. For her, this is a sign that companies that once created a multitude of jobs — as the car industry once did for assembly line production — are now turning to either automation or outsourcing.
Other industries, however, are stumbling massively due to new digital business models — you can see this in journalism. The pressure to adopt digital business models has been severe since the early days of commercial internet. However, many news outlets are failing to make a profitable business out of online journalism. Across the globe, local newspapers are closing, while the big players collect the ad money. Journalists struggle to find well-paid positions — or getting a job at all.
In countries like the USA, the global forces on workers have been harsh. The middle class in particular has come under pressure. Indeed, Ruppel Shell describes that were once solid middle-class jobs disappeared, no equivalent jobs re-emerged. Rather, people from the middle class were forced to have to apply for lower-paying jobs. Job growth, in fact, has been particularly high in “simple” jobs such as food service, while there have been relatively few well-paying new jobs.
“Good jobs” that not only provide a living but also foster professional growth are increasingly rare. I see this as one reason why personal branding has become a huge trend. Competing for a few interesting and desirable jobs, it has become more important to build advantage through an image on LinkedIn and other platforms that allow people to showcase their strengths.
The rise of freelance and work platforms proves that the job market doesn’t create enough opportunities — and people will therefore opt to try to make it on their own. In fact, after 2008 the job markets of many Western countries have been particularly harsh to young professionals with little experience. In Spain or Italy, there has never been a full recovery in spite of the large share of well-educated young people.
Race to the bottom
So far, the trend toward crowd work has been limited in many Western countries, yet growing in emerging economies. The demand for more micro jobs will be virtually unstoppable worldwide. This is also associated with a downward price battle. On platforms like Fiverr, service providers from all over the world are competing against each other, and while 20 Euros per job is not a small price for a worker from an emerging economy, Westerners will have a hard time making ends meet if they only relied on such gigs.
The development of the job platforms depends to a large extent on how the job market develops and whether a modern professional world offers opportunities for career changers, young professionals with little experience, and workers with small children or whether the number of “good jobs” will be reserved only for people who can score points with a straight résumé and the will to work overtime.