The Freelancer Pay Gap
What is it and what can we do about it?
Last Friday, I published a Google Form asking freelance writers and journalists to anonymously share their rates.
The response has been amazing. There have been nearly 600 entries so far and I’ve heard from journalists who’ve successfully raised their rates after seeing the data. I’ve since joined forces with Alex Holder, author of Open Up: The power of talking about money, and published another form for the creative industries.
I thought it was worth sharing here what the freelancer pay gap is and why this project is important.
What is the freelancer pay gap?
A pay gap is a difference between what people from different backgrounds get paid. For example, the gender pay gap is the difference between the average earnings of men and women, expressed relative to men’s earnings. For example, “women earn 15% less than men per hour”.
Pay gaps also exist depending on race, ethnicity, age, location and education status. Typically, pay gaps are measured for employees, so people in full-time staff roles at a company.
The freelancer pay gap is how these wage disparities manifest for the self-employed. This means, looking at how gender, ethnicity, age, location and education status affects the earnings of a freelancer. And then, looking at how those gaps compare to those of their staff counterparts.
How big is it?
In the UK, the gender pay gap is tracked by the government. Since 2017, any organisation that has 250 or more employees must publish and report specific figures about their gender pay gap.
This mandatory reporting, however, only applies to companies and their full-time staff. So, it will come as little surprise that there’s not a whole lot of data on the freelancer pay gap. The data we do have, however, shows that not only do pay gaps exist for freelancers, they are also wider than for staffers.
Research by IPSE (the Association of Independent Professionals and the Self-Employed) from last year found there is a 43% gender pay gap among the self-employed. This is significantly higher than the 17% among employees.
“Much has been said about the gender pay gap among employees, but the gender pay gap among the self-employed is actually much bigger,” Inna Yordanova, Senior Researcher at IPSE, said. “This has shocking knock-on effects for the overall financial wellbeing and mental health of women in self-employment. They are more worried about their finances and their savings and they are less able to access vital financial support like mortgages and pensions.”
The situation is no better in other countries. According to the OECD, the US and Poland have the biggest pay gap among the self-employed, both at 56%. Even Belgium, the country supposedly at the forefront of closing its gender pay gap, has a gap of 30% among its self-employed.
In 2017 HoneyBook, project management and bookkeeping software company, uncovered a significant pay gap between male and female freelancers. Last year, the company followed up with new findings on pay equity in the creative industries. While the annual wage gap is narrowing, new data shows that this is not because women are earning equal pay, but instead because they are working more. In other words, the gender pay gap is shrinking because women are taking on more projects each year to make up for unequal pay.
You’ll notice I’ve only talked here about the freelancer gender pay gap. That’s because, if there is any data on the ethnicity pay gap for freelancers, I couldn’t find it.
Why does the freelancer pay gap exist?
Pay gaps exist for lots of complicated socio-economic reasons.
What’s significant about the freelancer pay gap compared to wage disparities of employees is the implication that it’s self-made.
Even IPSE, one of the few industry bodies tracking this data, suggests the problem lies with the individual. “Unlike employees, the self-employed gender pay gap is not driven by employers undervaluing women. Instead, it is likely to be driven by self-employed women undervaluing themselves and charging a lower day rate.”
This is a red-herring. Women don’t undervalue themselves in a vacuum, there are cultural and social reasons which teach us to believe we’re less worthy of higher pay than men.
Research already shows that flexible working can close pay gaps. This is because women still take up the majority of primary carer roles in families, meaning that their capacity to return to traditional work roles is reduced and as a result, there is an over-representation of women in low paid, part-time work.
It should follow that self-employment also offers the possibility of democratising work for those who’ve historically been underserved by it. And yet, the data we have suggests the opposite is true and in fact, the pay gap is even larger for freelancers than in-house staff.
This is down in a large part to the lack of legal protection in the self-employed sector, particularly the gig economy, which leaves workers vulnerable. This is especially true for women, people of colour and other marginalised workers.
Speaking to the FT, Katia Segers, a member of the Flemish parliament said this due to the changing nature of work. “In today’s modern economy, what you see is more young people starting out as independent or freelance workers developing ‘slash careers’,” she said. “Then, of course, the gap is huge because they don’t belong to a company that would be forced to publish their wage figures.”
How accurate is the data?
Wage gap reporting is complicated. While self-reporting no doubt has its limits, it’s an important start.
The data journalist Mona Chalabi has done a lot of work on equal pay and as she explains in this post about it, snapshot figures only tell part of the story.
“The gender wage gap varies depending on where you work, how old you are, your educational status and your race or ethnicity,” she writes. “That 80 cents on the dollar figure is misleadingly simplistic. For women of color, women in the midwest and those working in certain occupations, the gap is much larger than that.”
What can we do about it?
The biggest difference individual freelancers can make about the pay gap is to share their rates.
Transparency is a simple act that makes a big difference. By sharing your rates, you help other freelancers see what’s possible for them to earn. You also contribute to a growing dataset that can be used to analyse the extent of the freelancer pay gap.
If you’re a freelance journalist or writer, you can anonymously share your rates using this form.
If you’re a freelance creative who works in advertising/design/production etc, you can use this form to anonymously share your day rate. Where you can, do share the name of the company or agency that paid you.
It’s especially important to share your rates if you’re white and/or male. This is because these groups typically earn more than their female and POC counterparts so by sharing your rates, we can see the benchmark.
If you’re interested in learning more about the #FreelancerPayGap, follow the campaign on Instagram.