World Tour: Minimum Wages, Gender Pay Gaps, is Freelancing Really the Solution for a Higher Paycheck?
In today’s world, the concept of the mandating of a minimum wage by a nation’s central government is hugely popular. There’s some new information compiled by ReportLinker that should give us all pause for thought.
But in spite of the plethora of opinions surrounding it amongst the populace, politicians, and economists, the real history of how that regulation plays out in real life is typically neither pretty nor compassionate.
And, of course, we are talking about minimum wages, not total wages and compensation.
So it should come as no surprise that, as ReportLinker Data discovered, just because unemployment rates go down, it does not mean that minimum wages paid by employers go up in tandem. In the United States, different state governments set different minimum wages. In Europe, different nations set different ones, with the minimum wage in France and in the UK being at all times high since the 60’s.In the US, there are myriad forces at play in the market determining how much workers should get paid (7.16$ being the minimum hourly wage authorized in 2016). These include the very young, the inexperienced (often the same as the very young), the low-skilled, and the physically or mentally impaired (“partially disabled”).
Spanning the globe, different cultures increase minimum wages according to different incentives. For instance, if we compare (after adjusting for inflation) the minimum wages paid out in Japan (6.65$), Turkey (5.79$), Brazil (2$), and the US (7.16$), we see dramatically different statistics.But one thing is clear across the varied nations: a lot of people, especially younger adults, are disgruntled about being paid less than they feel that they are worth while simultaneously having not much of a pension to look forward to and being “wage slave” captives in their prime years.
Many working people, in response, are turning to freelancing in the so-called “gig economy”.
The gig economy of freelancers and freewheelers is not for everyone. It can be a scary institution. That’s why 74% of people surveyed by ReportLinker say it’s unlikely that they’ll become a freelancer. On the flip side of that same coin, however, 65% agree that freelancers are happier than other professionals.
If you think that the gig economy or freelance niche is the province of Millennials and very young adults, think again. The share of the working economy in which those under the age of 30 act as freelancers is, in point of fact, paltry all across modernized nations and cultures. Just look at the numbers: in France, its 9%; in Japan, 7%; in Germany, 5%; in the UK, 10%; in Sweden, 7%; in Canada, 9%; in Spain, 6%.
The above statistics tell us a story of how daunting it is to attempt to enter this industry and be a success as an independent, self-sustaining person. Those who turn to the freelance or gig economy for better pay and personal fulfillment have to contend with fluctuating paychecks (some weeks going without one of them), the need to invoice and collect dewy payments for themselves, working long or odd hours (such as weekends), and not necessarily getting paid at all for working (for instance, spending hours doing marketing or sending out sales pitch letters without landing an assignment or project).
The gig economy is also not a place for idealism.
For instance, women who turn to the gig economy thinking that they’ll finally make as much money as their male counterparts are in for a sharp shock. For instance, in the US alone, younger males make 56% more money in the gig economy than the women and the older people who are also freelancing within the same niche. While this discrepancy is trending downward, it’s still very big. We might compare this to the comparatively minor 18% higher average wage earned by salaried men in the US through 2016.
This phenomenon is not limited to the US, and it’s cross-cultural. Among the self-employed, men compared to women in France earn 22% more money. In the UK it’s 33% more, whereas it’s 28% more in Spain, 24% more in Norway, and 40% more in Canada (which, incidentally, is the same pay gap earned by salaried men compared to salaried women in that nation). With the exception of Canada, the wage discrepancies between salaried men and women in the respective nations are substantially smaller (France 10%, UK 17%, 11% Spain, Norway 7%) than those between freelancing men and women.
One leading theory for the big pay gaps between self-employed men and women says that women set their prices too low in a lack of self-confidence. But in all likelihood, there’s an array of reasons for it…
In any event, the Age of the Freelancer seems nigh!