Mark Terry

Tuesday, February 26, 2013

Self-Employment 101

February 26, 2013
I was chatting with a friend of mine yesterday - okay, I was sort of venting. There's a lot of crap going on right now and I was momentarily juggling more of it than desirable and felt like I was dropping half of it.

Anyway...

Let's back up a minute.

Yesterday, on Facebook, I also posted a job posting I ran across and I called it the State of the Market. To whit, somebody was looking for someone to write articles for the real estate market and about healthcare and they were willing to pay the magnanimous sum of $8 per article. Yes. PER ARTICLE.

So, in other words, if you can somehow write a 500-word article that is professional in one hour, you would make about minimum wage. But if you, perhaps, did a little research, interviewed people, or in general did what you're supposed to do to make a professional readable written product, you'd make about 15 cents an hour.

So anyway, we were chatting and we talked about that article and I said there was another one that was looking for someone with an MBA to write articles and they would pay $25/hour. To which my friend said that he didn't see an MBA going for that, but $25/hour was pretty good.

So here's where I discuss self-employment briefly.

For a self-employed person, $25/hour really isn't all that good. Here's why.

For all you wage slaves who work the so-called 8-hour day, your yearly salary is typically built on 2080 hours per year. That is to say, 8 hours a day, 40 hours per week, 52 weeks per year. So $25 per hour comes out to $52,000 a year, which is decent. And, for most wage slaves in the U.S. at that pay rate, they've got another $10-$20,000 worth of benefits like health insurance, paid holidays, paid sick days, paid vacations, possibly even year-end bonuses, etc.

One very big misconception people who have never been self-employed have is that if you do a gig for $25/hour, then you're well on your way to that same $52,000.

Um, no.

Assuming I worked 40 hours per week 52 weeks out of the year, the fact is, I couldn't possibly get 2080 billable hours out of that timeframe. Because much of my time is spent on non-billable business functions - researching jobs, querying, filing, invoicing, talking to clients, marketing, etc.

In order to get 2080 billable hours, I probably would need to actually work 3000 to 4000 hours a year. That's a lot.

Or, as is the case with the majority of self-employed folks, they bill at a higher rate. Hell, if an attorney or a psychologist, etc., can bill $300/hour, I get enormously frustrated when people think $40 or $50 an hour for a professional medical writer is expensive. And more than a little pissed when they throw out a number like $8 per article.

2 Comments:

Anonymous Eric Mayer said...

What writers are generally offered in the way of pay is insulting. Writing in the Rodney Dangerfield of professions.

When you are self-employed you get no paid time off. If you're sick and not working you aren't earning. No aid vacations. As for the cost of individual health care plans!!! And, of course, for all these privileges we get to pay twice as much Social Security tax as an employee. Mind you, it is worth it not to be an employee, but most people do not know about the shortcomings of self-employment. They think you're free to lounge about all day.

11:18 AM  
Blogger Aimless Writer said...

I saw that post on fb. I have a friend who used to do quite well with a website on wedding cakes and she would pay about $5. for articles. Most of the writers were from places like India. When the Panda hit, her website just about died.
In researching the Panda, I learned it actually checked each site to see the quality of the writing, keywords etc.
Which brings me to the conclusion; you get what you pay for. Evidently the quality of writing on her site might have been less than stellar. At least the Panda thought so...

4:05 AM  

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