Small Business Labs

Non-Profit Sector Big and Growing Faster Than Overall Employment

The Johns Hopkins Non-Profit Economic Data Project recently released its 2019 Non-Profit Employment Report. 

There are two key findings.  The first is the U.S non-profit sector is big, employing 12.3 million paid workers.  

As the study chart below shows, this makes the non-profit sector as big in terms of employment as the U.S. manufacturing sector.

The non-profit sector is also growing relatively rapidly. 

As the report chart below shows, from 2007 to 2016 (the most recently available data) employment in the non-profit sector grew nearly four times faster than the for-profit sector. 

We've long covered non-profits because the vast majority of them are small businesses. Over 80% of all non-profits spend less than $1 million per year in total expenditures.

And since there are about 1.5 million U.S. non-profits, a quick bit of math shows that the average non-profit has 8.2 employees.  

We've also long forecast that the non-profit sector would outgrow the for-profit sector of the economy. We continue to forecast this. The trends driving this growth include:

• The Internet and other technology makes is making it easier to start and operate a non-profit and especially small non-profits.
• Baby boomers, looking for encore careers and a way to give back, are starting growing numbers of non-profits.
• Millennials, who have a strong interest in social service, are starting non-profits.
• Non-profits and social service organizations are in many cases replacing governments as the key solvers of social problems.
• Revenue generating business models have become more common, which is leading to more self-sustaining non-profits. 

One issue may detract from the continued growth of non-profits is changes in tax laws. Key quote from the Johns Hopkins report:

"... the Federal Tax Cut and Jobs Act passed in December 2017 included several items that could have a negative effect on nonprofits’ ability to generate private donations. For example, by greatly expanding the standard deduction available to individuals, the tax bill will eliminate the tax incentives for giving for millions of taxpayers."

While we agree this is a risk, we believe donors will continue to provide enough support for this sector to continue to grow.

Quibi Bets Big on Mobile Movies

Quibi is a startup entertainment company that has raised $1.4 billion in venture funding to build a new content streaming service designed exclusively for mobile devices. 

Founded by Hollywood titan Jeffrey Katzenberg and led by CEO Meg Whitman, a Silicon Valley titan, the company has additional star power because of who they've signed up to provide content. 

According to TechCrunch:

"Quibi has attracted big-name talent to help kick off its first year, including Academy Award winners Steven Spielberg, Peter Farrelly and Guillermo del Toro; directors like Antoine Fuqua, Lena Waithe, Sam Raimi and Catherine Hardwicke; and stars like Stephan James, Chrissy Tiegen, Laurence Fishburne, Dave Franco, Bill Murray, Emily Mortimer and Kevin Hart, to name a few."

Quibi, which is short for “quick bites” is going to offer short-form videos of 4 to 10 minutes on everything from movies and TV shows in the form of short chapters to daily news and sports reports. 

These bite-sized pieces of content will have Hollywood quality production values, meaning they're expensive to make.  According to MarketWatch's article on Quibi:

"Lighthouses,” the service’s premium videos, will cost about $100,000-per-minute to produce, on par with some of the most expensive shows on TV.

The question, of course, is whether or not people want and will pay for high quality, short-form video entertainment on their phone (Quibi is planning on charging $4.99 to $7.99 per month for access to their content). 

Key quote from Fortune from Jeffrey Katzenberg on why Quibi will work:

“Everything they’re being offered today is centered around the TV. This is about your in-between time,” he told Fortune. “It’s quick bites, on the go and in between. It’s a very, very different viewing habit that we know our anticipated customers already have.… There is an unbelievable amount of content being consumed today on phones on the go. It’s just not of this quality.”

The shift to mobile computing devices is one of the most powerful technology trends of the past decade.

Whether Quibi is successful or not, it's an excellent example of the continuing impact this shift is having.

The Growing Backlash Against AB5, California's New Gig Economy Law

California's new labor law, AB5, was meant to help Uber and Lyft drivers - and others - get hired as traditional employees with the hope this would increase their pay and financial security. 

But the broadly worded and vague language of the new law is leading to a wide range of unintended negative consequences.

It's also resulted in a growing backlash among independent workers as well as organizations that hire them.

For example, Business Insiders 'It feels cold and heartless': Hundreds of California freelancers have been fired before the holidays over a state law meant to help Uber and Lyft drivers covers a mix of freelancers who have lost work because of the new job. 

Key quote:

A new California state law meant to restrict the gig economy has caused companies like Vox Media to cut jobs for freelancers directly before the holidays.

The loss, or potential loss of work, has led to both freelance journalists and independent truckers filing lawsuits challenging the law. 

Uber, which already said it would not comply with the new law, also joined with Postmates to challenge the law in court.  

Translators and interpreters, another industry with a lot of independent workers, are also looking to the courts for help as they lose work.  

And some companies, with Wonolo being a good example, are simply leaving California because of the law. 

We've also heard from a number of corporations that they will no longer hire California freelancers. One thing they will do instead is hire freelancers in other states and beyond AB5's reach. 

We expect to see many more examples of the unintended consequences of AB5 - and related legal actions - in the coming weeks and months. 

Our hope is the legislature and governor will recognize the law needs to be reworked and do so. 

The Rise of Career Nomadism

Korn Ferry is a large, global organizational consulting and recruiting firm. Their research institute recently released their Top 10 Talent Trends for the New Year.  

All the trends are interesting. But the one that jumped out at us is the rise of career nomadism.

Key quote describing this group:

"... there’s an increasing amount of employees who actually want to make walking out the door a major part of their career. These “career nomads” are high-performing talented pros who have no qualms switching jobs, organizations and even careers. Millennials, people born between 1982 and 2000 and now the largest part of the US workforce, seem particularly disinterested in staying put."

Korn Ferry goes on to say that corporations are going to need to attract and keep these nomads happy or miss out on a key source of top talent.

We certainly agree. And we see this as one of the drivers of the growth of independent work (freelancing, independent consulting, etc.). 

Work is becoming more team and project-oriented, and the barriers separating traditional and independent work continue to erode. For an increasing number of workers, it’s not simply a matter of having a traditional payroll job or working independently. 

Instead, many are doing both, developing their professional lives by shifting back and forth between independent work and traditional employment. 

Often workers choose to go independent to explore new opportunities, learn new skills or gain flexibility. Later on, many rotate back to traditional jobs. 

The most extreme version of career nomads are digital nomads. And as with career nomads, millennials are particularly interested in spending some part of their careers as digital nomads. 

Talent mobility is a growing fact of corporate life, especially among highly skilled workers.  Hiring organizations need to accept and adapt to this new reality.

Happy Holidays!

We'll be back in 2020.

The Paradox of Increasing Business Travel; Skift's 2020 Travel Trends

Skift is one of our favorite publications. It covers the travel, dining, and wellness industries from a business perspective. Because of their remit, they report on a wide range of interesting trends.

The recently released their 10 Business Travel Trends for 2020. The 10 are:

1. The Power of Being There in Person
2. Designing Great User Experiences to Boost Adoption
3. Travelers Demand an End-to-End Experience
4. Winning the Price, Loyalty, and Experience Trifecta
5. Platforms Simplify the Ancillary Purchase Process
6. Expanding the Sharing Economy
7. Bleisure Travel is the New Black
8. Rethinking Corporate Travel Expenses
9. Business Travel Culture Drives Company Success
10. Taking Care of Business, the Traveler, and the Planet

While we like all of these trends, we find The Power of Being There in Person the most interesting. Key quote from the report on this trend:

Video and digital collaboration tools have transformed the modern workplace. Today,  employees can easily collaborate with co-workers around the world, offering a huge boost to productivity and what would seem to be growing opportunities to reduce travel costs. But in spite of the increasing potential of these digital collaboration tools to transform modern business, the importance of face-to-face meetings remains strong and critical to business success.

The chart below illustrates the fact that 9 out of 10 business executives surveyed agree with this.

We think this trend is similar to the paradox of place. This paradox is even though the Internet and connective technologies have made working remotely easier than ever, people and companies are increasingly clustering together in fewer, more valuable locations.

A related paradox is despite these same tools being able to substitute for business travel, business travel continues to grow. 

Our view is connective technology is, somewhat counter-intuitively, helping to drive the growth of business travel. It’s doing this in 3 ways.

1. Connective technologies have allowed business operations and workers to become more distributed. This means more travel as managers and employees travel to meet with those not co-located.
2. Connective technologies have also increased the number of people who work together regularly, but aren’t co-located. Thanks to the Internet and related tools, companies are more willing to create distributed teams and allow team members to live away from their teammates.  This leads to more travel and more people traveling because these distributed teams get together in-person.

3. Related to 2, connective technologies have led to more cross-organizational teams comprised of business partners, suppliers, customers and company employees. These teams are almost always distributed, which creates the travel need to get together.

We’re seeing signs that paradox of place is starting to shift, with work becoming more distributed. This likely means there will be more business travel in the near future.

We’ll have more on this topic in the new year.

The Rise of Esports

Quartz’s members-only article (meaning you have to be a paying subscriber to see it) The stars, teams, and investors turning esports into big business nicely covers the rise of esports.

Key quote:

“Tens of millions of viewers are tuning in to watch other people play video games competitively, and it’s becoming big business …  it is creating a new kind of sports star, and both the gaming industry and professional sports franchises have taken notice.”

As the Quartz chart below shows, esports' revenue is growing rapidly and expected to generate about $1.1 billion in revenue is 2019. 

According to the article, esports started in 1982 with a TV show Starcade, in which teenagers competed in arcade games. Alex Trabek of Jeopardy fame even hosted one of the episodes. 

Since then the industry has grown to the point where professional sports teams are getting involved. Again from the Quartz article:

“The Philadelphia 76ers have bought esports teams and are providing them access to training facilities —and they’re not the only ones. New England Patriots owner Robert Kraft owns a team, as does Los Angeles Rams owner Stan Kroenke.”

Esports is an excellent example of how technology is creating societal change – and new businesses and opportunities.

BTW, we find the Quartz premium membership service to be well worth its cost. We particularly like their weekly subject briefings, like this one on esports. 

HBR on How to Negotiate as a Freelancer

HBR's Now to Negotiate as a Freelancer provides an excellent overview of this important topic.  Key quote on 3 things that tend to cause freelancers negotiation problems:

First, they focus on the business aspect of the relationship to the detriment of building a personal rapport; second, they attempt to differentiate themselves from their competitors with price discounting, and third, they waste their negotiation time on the wrong clients.

We agree with this list and in our experience, the key to freelancing success is finding and cultivating the right clients.

From our perspective the right clients have 3 attributes:

• The work you do is important to the client.
• The client values your work and the relationship.
• There's a good cultural and values fit between you and the client. 

The article suggests using the following two-factor grid to help decide which clients to pursue and projects to take.

It takes time and effort to find and develop relationships with "good clients".  It's also true most freelancers will have to work with a number of "bad clients".  

But finding good clients - and delivering excellent work - are in our opinion the keys to freelancer success. 

Uber's Safety Report

Trust and safety have always been major issues with the sharing/gig/peer-to-peer economy. But data on the safety problems in this growing part of the economy have been non-existent. But that's starting to change. 

Last week Uber released a U.S. safety report that provides details on the number of sexual assaults, murders and fatal crashes that occurred through its platform in 2017 and 2018.

The New York Times article headline on the report - Uber Says 3,045 Sexual Assaults Were Reported in U.S. Rides Last Year - sums up the media coverage of the report, which has highlighted the number of sexual assaults. 

And 3,045 sexual assaults is a lot and the actual number is no doubt higher because of unreported assaults. 

But Uber also provides a lot of rides - 1.3 billion in the U.S. in 2018. This means the incident rate per ride was only .0002%. 

Almost half (44%) of the sexual assault victims were drivers.  This again is not good and too many. But it means the rider incident rate was only .0001%. 

Uber also reported 58 fatal crashes and 10 murders in 2018. 

interestingly enough, there's almost nothing to compare Uber's data with.

Similar national data does not exist for the taxi industry nor for most other forms of transportation. 

Uber is also the first rideshare company to provide this data (Lyft says it plans to do so in the future).

So we don't know how this data compares with other forms of transportation.

But we do know you're less likely to die in a car crash while riding an Uber than you are driving yourself.  This is because there is national data on car accident fatalities. Key quote from the Safety Report:

"The Uber-related motor vehicle fatality rate for 2017 was 0.59 fatalities per 100 million vehicle miles traveled; it was 0.57 fatalities per 100 million miles traveled in 2018. For both years, the Uber data is about half of the national rates."

Regardless of how you feel about Uber's safety data, it's good they've released it. Key quote from the NY Times article:

Sexual violence experts agreed that publishing the numbers was an important step in combating abuse across the industry.

“That a company is willing to peel back the drapes and let us look into what is happening is, to me, the success,” said Cindy Southworth, the executive vice president of the National Network to End Domestic Violence and a member of Uber’s safety advisory board.

The more data we have on this the better. And hopefully, Uber's release will lead to others collecting and releasing their safety data. 

Lack of "Good Jobs" Means More People Turn to the Gig Economy

One thing that comes out loud and clear in our research is many turn to the gig economy because of a lack of "good jobs".  

By "good jobs" we mean jobs that pay well, are reasonably secure and provide benefits.  But while the U.S. unemployment rate is low, the economy is creating more low wage jobs than middle and high wage ones.  

This leads more people to do gig work to supplement their income. it also leads more to turn to gig work in the hopes of being able to make more than low paying traditional jobs. And even if they can't make more, they can potentially have greater levels of work control, flexibility and autonomy.

The lack of good jobs is highlighted by the U.S. Private Sector Job Quality Index (JQI). 

As the chart below shows (click to enlarge), job quality has consistently declined since the 1990s and after a brief uptick is near its all-time low. 

The JCI divides U.S. jobs into two groups: “high quality” jobs that pay more than the average weekly wage and tend to have more hours per week, and “low quality” jobs that pay less than the average weekly wage and generally offer fewer hours. 

The current reading, about 80, means that there are only 80 high-paying jobs for every 100 low-paying jobs. That's a substantial decline from 1990 when there were 94 high-paying jobs for every 100 low-paying jobs.

The main reason for this decline is a shift from goods-producing jobs to service sector jobs, which tend to pay less. 

For example, employment in food services and drinking places has increased by 65% since 1990 while manufacturing employment has decreased by 30%.  Since food services and drinking places tend to pay below average wages, they have created a lot of low quality jobs. 

The growth of low quality jobs - coupled with rising costs for housing, education and healthcare - means more people turn to the gig economy as a second source of income.  

There's a lot of noise about making gig economy jobs better.  We agree this is a good idea.

But we believe it's more important to fix the traditional job quality problem.  As long as the economy creates more low quality than high quality jobs, people will struggle regardless of what happens with the gig economy. 

For more on the JCI, see Quartz's The great American labor paradox: Plentiful jobs, most of them bad. 

Remote and Distributed Work Driving Growth Outside of Major Cities

Citylab's Talent May Be Shifting Away From Superstar Cities covers research showing that the fast-growing "superstar cities" - New York, San Francisco, Seattle, Los Angeles, Washington, DC - may be slowing down. 

Taking their place in attracting talent are lower-cost cities and towns, mostly in the sunbelt. 

The data comes from EMSI's Talent Attraction Scorecard, which looks at six metrics by county: job growth, skilled job growth, net migration, annual openings for skilled workers (per capita), educational attainment growth (based on adults with associate degrees and above), and a broad measure of regional competitiveness.

In addition to finding talent is spreading out across the U.S., the study also found continued growth of remote workers - again, especially in lower-cost areas of the country. 

EMSI found about 7 million Americans report being full-time remote workers. This is about 4.7% of the workforce.  

As the study chart below shows (click to enlarge), many Western cities have a much higher percentage of remote workers than the national average.

There are several drivers of the shift away from superstar cities.  Key quote from the article:

The big knowledge and tech hubs which once had such a stranglehold on attracting talent seem to be losing their allure. Many places around the country now have bundles of amenities—renovated old buildings, coffee shops and good restaurants, music venues, and not least of all, more affordable homes—that can compete with the biggest cities. In other words, the amenity gap between superstar cities and other places has closed, while the housing-price gap has widened.

Another driver is continued improvements in distributed work technologies. With the advancements of video conferencing and online collaboration tools, it's become much easier to interact with and manage remote workers.

We believe the trend towards distributed work will continue and even accelerate over the next 5 years.  The economics of moving to lower-cost areas of the country are simply too strong for this not to happen.    

Renewable Energy to Pass Coal for U.S. Electricity Generation in 2021

According to the Institute for Energy Economics and Financial Analysis (IEEFA), renewable energy sources will pass coal in terms of U.S. electricity generation in 2021.

As their chart below shows, each of the sources will produce around 800 billion kilowatts of electricity in 2021.

Included in the IEEFA's definition of renewables are utility-scale biomass, geothermal, hydropower, solar and wind, plus small-scale solar.  

The fastest-growing of these sources by far are wind and solar. They are forecast to continue growing at the pace of the past couple of years (around 20% for solar and 10% for wind). 

Coal generation, as the chart below shows, has been rapidly declining since it's peak year in 2010.

Simply put, coal is not economically competitive with other sources. This even though many of the costs of coal (pollution, worker health problems, etc.) are not included in its price.

As cheaper and more efficient ways to store energy become available, there will be even less need for coal plants.

Expect coal's rapid decline to continue. Also, expect solar's growth to continue.

This is good news for both the economy and the environment.  Solar energy creates more jobs (and better jobs) than the coal industry as well as being much better for the environment. 

Scientific American's Top Emerging Technologies of 2019

Scientific American's describes their Top 10 Emerging Technologies Of 2019 as "World-changing technologies that are poised to rattle the status quo." 

Key article quote on the technologies:

One day soon an emerging technology highlighted in this report will allow you to virtually teleport to a distant site and actually feel the handshakes and hugs of fellow cyber travelers. Also close to becoming commonplace: humanoid (and animaloid) robots designed to socialize with people; a system for pinpointing the source of a food-poisoning outbreak in just seconds; minuscule lenses that will pave the way for diminutive cameras and other devices; strong, biodegradable plastics that can be fashioned from otherwise useless plant wastes; DNA-based data-storage systems that will reliably stow ginormous amounts of information; and more.

It's a great list and hard to argue these technologies won't have a big impact.

But you could easily argue about when "one day soon" will be.

By far the hardest part of technology forecasting is timing. 

Identifying trends is pretty easy.  For example, it's not hard to predict that AI will improve and have a big future impact.

What is hard is identifying when the impact will occur. 

Back in 2014, there were lots of forecasts that AI-based driverless cars would be common by 2020. There were also many forecasts that many professions - accounting, medicine, law, etc. - would be disrupted by AI by 2020.

These forecasts were obviously wrong.  

So while we agree that the technologies in this list will have a big impact, whether or not the impact is "soon" will depend on your definition of "soon". 

All of the technologies listed are under development.

And a few (social robots, for example) have reached the point where there are in-market examples. 

But don't expect widely commercialized versions of most of these technologies for at least another 10 years, and in some cases much longer.

The Online Platform Economy as a Safety Net

The JP Morgan Chase Institute recently released a new study, Bridging the Gap: How Families Use the Online Platform Economy to Manage their Cash Flow. 

The key finding of the study is "participation in the Online Platform Economy functions as a cash-flow management tool for many families."

In particular, JP Morgan found many use online platform work to supplement their income when they lost a job. Key quote from the study:

"Taken together, our findings indicate that the Online Platform Economy— and particularly its transportation sector—play an income-smoothing function for families between jobs."

Regular readers may remember this was one of the key findings in our On-Demand Workforce Workforce study conducted with Intuit and released in 2017. 

In that study, we found 21% of online platform workers reported they participated in this type of work to get through financial hardships or shocks, such as a job loss or major medical expenditures. 

We also found 41% of the workers surveyed had faced a financial shock over the prior year. See the Aspen Institute's write up of the study for more details. 

These findings are important because policymakers tend to focus on long term, full-time gig workers.  This means they could easily pass laws that limit the ability of people to use online work platforms in times of financial need and/or to supplement their income.

Key quote from the JP Morgan Chase Institute study:

... as policymakers weigh approaches to improve the pay, benefits, and protections of platform workers, they ought to take into consideration potential impacts those same approaches might have on the very characteristics of platform work—low barriers to entry and high flexibility—that allows families to use it to smooth their income.

We agree with and echo the importance of low barriers to entry and high flexibility. 

Income volatility is growing and more Americans are facing financial hardships and shocks than in the past. It’s also clear that our traditional safety nets are not working as well as they need to. 

Online platforms and gig work have become an alternative safety net for many.  We have to make sure in our zeal to protect workers, we don't take away this important income-generating alternative.  

California's New Gig Law, AB5, Ignores the Growing Role of Remote Work

Business Insider's California is attempting a massive labor experiment that could grow into a disaster for millions of workers outlines some of the many problems with California's new AB5 worker classification law.

It's written by a self-employed multimedia journalist based in Los Angeles. He describes a key issue as:

"I have an independent business, I don't get paid vacations, and I have to cover my own health insurance. I've made these trade-offs for career flexibility. But the state's new Independent Contractor Law, Assembly Bill 5 (AB5) assumes that I'm being exploited and should be an employee, whether I want to be or not."

The author goes on to say that while well-intentioned, AB5 was "haphazardly written and rushed through the legislature, and it doesn't account for the way tens of thousands of freelance professionals in the state work."

Because of this, a lot of self-employed Californian's are likely going to be hurt by the law. 

This is especially true because more and more work can be done remotely. 

This means California firms can get around AB5 simply by hiring contract workers who reside outside the state. 

As the article points out, this is already happening. Key quote:

"There are already examples of a California backlash. Patch Media has placed an ad looking for reporters to cover stories about California, so long as the reporters don't actually live in California ... Some employment listings ... come right out and say it: "Due to legislative restrictions, residents of California and Massachusetts are not eligible for this opportunity." Massachusetts has a similar though less restrictive law."

Echoing this, we recently met with a large California based corporation. They told us because of AB5, they had decided to stop hiring independent workers in California.

They also plan to increase their use of remote independent workers located outside of the state.

Also echoing this comes from the LA Times article Opinion: California is making the writing life even harder. Key quote:

"Facing ever narrower margins, media companies prefer to avoid the time and cost of parsing the law and any risk of running afoul of it. They can turn to the many good writers who live in the other 49 states."

We obviously have mixed feelings about AB5 but agree that its intent was well-intentioned.

Nor do we think AB5 should be repealed. There are a lot of misclassified workers in California who should be classified as employees.

Many of these workers would benefit from and prefer being a traditional employee. And AB5 could be a good starting point for fixing these problems.

But it needs to be reworked and amended because it ignores the reality of three key work-related trends:

1. remote work is growing and a state-level law, like AB5, is easy to bypass by using workers located outside of the state.
2. more workers want the autonomy, control, and flexibility that come with being self-employed. Forcing these workers to be traditional employees is bad policy.
3. companies want greater workforce flexibility. Limiting their flexibility will result in firms hiring fewer California workers.

There are lots of examples of legislation that attempt to stop or turn back change. They rarely work. 

Both the legislature and California Governor Newsom have indicated a willingness to amend AB5. We hope they're serious and quickly move forward on fixing the clear problems associated with his legislation. 

53 Million Americans are part of the Low Wage Workforce

Brookings' Meet the Low Wage Workforce reports that 53 million Americans, or about 44% of all workers aged 18-64, have low-wage jobs.

According to Brookings, the national average for a low-wage job is one that pays $16.03 per hour or less.  The low-wage level is adjusted using city-level cost of living data.  For example, a job paying $20.02 in high-cost San Jose, California is considered low wage while one paying $13 in low-cost areas of the country isn't.

Brookings found the median low-wage job pays $10.22 per hour with median annual earnings for $17,950.

This, BTW, means about 22 million Americans have jobs that pay $10.22 per hour or less. 

The report map below (click to enlarge) shows the distribution of low-wage jobs across the 373 metro areas. Brookings did not include rural areas or towns not in the top 373 metro areas in this study.

One of the reasons independent work (freelancing, self-employment, etc.) has increased over the past decade is traditional jobs have become less attractive.

Wages have been stagnant, benefits cut, middle-wage jobs have hollowed and job security reduced. As this data shows, there's also a lot of jobs that simply don't pay well.

These factors lead more people to choose independent work. And as long as this is the case, there will be continued growth in the independent workforce.

How Political Polling is Done

We get asked a lot about political polls. And while Small Business Labs is non-partisan, we're OK with talking about how political surveys are done.

There are two big issues to be aware of with political polls. 

The first is how the questions are asked. It's well known that a survey can easily be slanted one way or another by the way questions are asked.

A good example is a recent poll released by President Trump's pollster. The questions asked are so slanted that's we laughed when we saw them (we could have easily found a similarly flawed democratic leaning poll. But the pro-Trump poll is recent and topical, so we went with it as our example).

The second big issue is who is polled. This is a more complicated issue.

But fortunately Pew's Why public opinion polls don’t include the same number of Republicans and Democrats nicely explains it.

As the Pew chart below shows, more Americans report either being Democrats or leaning Democrat than those reporting being or leaning Republican. 

But the tricky part is figuring out how many from each party will show up and vote.

Historically, wealthier and older people vote more than younger, less well-off do. And Republicans are, on average, older and wealthier than Democrats. 

So even though Democrats outnumber Republicans by quite a bit, it's almost even in terms of who turns up to vote.

The best political polls to watch, at least in our opinion, are the ones from non-partisan sources. These include Gallup, Harris and the major news organizations. 

We also watch FiveThirtyEight, which provides a presidential "poll of polls" based on their assessment of the validity of about a dozen polls.

RealClearPolitics also provides a wide variety of political poll results, including state-level data. 

Pew Internet: Experts Optimistic about Digital Life over the Next 50 Years

Pew internet's Experts Optimistic About the Next 50 Years of Digital Life project asked hundreds of technology experts how people's lives might be impacted by the evolution of the internet over the next 50 years.

72% of the respondents said there would be change for the better, 25% said there would be change for the worse and 3% believe there would be no significant change.

Key quote on why most are positive:

The optimists responding to the better-worse-no change question expressed hope that in the next 50 years digital advances will lead to longer lifespans, greater leisure, more equitable distributions of wealth and power and other possibilities to enhance human well-being.

But as Pew points out, even most of the optimists said there are potential downsides:

... nearly all of these experts’ written predictions included warnings about the possibilities of greater surveillance and data-abuse practices by corporations and governments, porous security for digitally connected systems and the prospect of greater economic inequality and digital divides unless policy solutions push societies in different directions.

What these experts recognize is technology can be used for both good and evil purposes. It's up to us to decide which.

The report is long, but the first page provides an excellent summary.

Corporations Starting to Embrace Digital Nomads

12 months living as a digital nomad, from LinkedIn, describes how a GE talent development executive spent a year as a digital nomad.

The key quote describes what she did when she finished her year as a digital nomad:

A point of culmination of this experiment is when I had the opportunity to pitch my experience to the CHRO of GE and so I have presented my learnings about this aspect of the future of HR, painting an image of digital nomads and flexible work at GE.

In the forecasting business, this is what's called a signal.

And in this case, the signal is corporations are starting to consider creating digital nomad programs.

There are 3 reasons we see this as a strong signal.

First, the author of this article is in talent development. This means she works with the people who decide the remote work policies at GE.

Having someone in her position supporting digital nomadism makes it much more likely GE will allow others to become digital nomads.

Related to this, she was able to pitch the chief human relations officer (CHRO) at GE on her experiences. This means the senior team at GE is now aware of digital nomads.

And 3rd, this didn't happen at Google or Facebook or some tech startup. It happened at GE, a traditional manufacturing firm. 

According to the findings of the 2019 MBO Partners digital nomad study, there are about 7.3 million American digital nomads. Of these, about 3.1 million report having traditional jobs.

Based on our digital nomad interviews, the vast majority of job holding digital nomads have been allowed to do this outside of any official corporate policy.  In most cases, their boss decided to allow them to travel. 

This is starting to change. As with GE, corporations are starting to explore, evaluate and consider - and in some cases, putting in place - digital nomad policies and programs. 

See the MBO Partners digital nomad research brief (we worked with MBO Partners on this study) for more on this topic.

Each Year a Lot of Americans Start and Stop Being Freelancers

One of the more interesting findings from the 9 years of data from the MBO Partners State of Independence study series is how many Americans enter and exit independent work.

As the study chart below shows (click to enlarge), the number of new full-time independent workers/freelancers entrants has stayed steady at around 1.5 million annually since 2011.

But the number of people exiting has varied widely. In 2012, only about 800,000 exited, but in 2016 2.4 million did. And since 2016 the number of exits has steadily declined.

The main reason the entrants' data is consistent is the aspirational nature of self-employment. Simply put, millions of Americans want to be self-employed.

Every year MBO Partners has done this survey between 12%-14% of Americans who aren't self-employed said they plan on becoming self-employed over the next couple of years. 

And while most won't, each year about 1.5 million take the plunge and become self-employed full-time.

The reasons people exit independent work is more complex and tied to cyclical economic forces and the state of the traditional job market.  

Early in the economic recovery, relatively few independent workers exited. This was because there were few alternatives since the traditional job market was relatively weak.

But as the job market gain strengthed, a growing number of independent workers returned to traditional employment.

This was especially true for the group we call "reluctant independents", which are independent workers who report preferring a traditional job. 

In fact, over the past five years, our research has found that four out of five independents who left the full-time independent workforce were reluctant independents. This resulted in the percentage of reluctants falling from 34% of full-time independent workers in 2012 to just 19% in 2019. 

The declining number of reluctants is also why the number of exits peaked in 2016 and has declined since. There are simply fewer reluctants left to exit. 

Going forward we anticipate the number of new full-time entrants to continue to run in the 1.5 million range. 

We also expect the number of exits to continue to decline and drop below 1 million per year by 2021. 

This forecast assumes the economy continues to slow (2020 GDP in the 1.5% range and 2021 in the 2% range), but doesn't all into a recession. 

We'll have our recession outlook in another article in the near future.

The Pros and Cons of Working Remotely

Recode's How remote work is quietly remaking our lives provides a deep dive on the growing impacts of the shift towards working remotely. Key quote:

"The changes remote work has introduced have happened so gradually you may not have noticed. But its growing popularity is remaking how we work, the tools we use to work, how we communicate at work, and even the hours we work ... What was once a rarity among a select set of workers is quickly becoming a defining feature of the future of work."

The pros and cons of remote work are well known, but the article chart below nicely summarizes them. The underlying data comes from a remote worker study done by the social media marketing firm Buffer.

The big pro is, of course, flexibility.

We cover the importance of flexibility a lot (if you do a Google search on "flexibility "Small Business Labs"" you will find 3400 citations).

But it still needs reinforcing -  it's a key driver of both the shift to remote work and the rise of independent work.  

We also certainly agree remote and distributed work is a defining feature of the future of work.

And to better understand this trend, we closely follow two remote work edge groups - digital nomads and fully remote organizations.

Digital nomads can be thought of as remote workers on steroids. Because they're both remote and nomadic, they tend to have advanced methods for work remotely - including how they use technology. 

Fully remote organizations are also on the leading edge of remote work because, well, all of their employees are remote. 

While reading the Recode article we were struck that remote work is a great example of Amara's Law, which is:

We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.

Back during the first Internet boom in the 1990s one of the most common forecasts was that very soon everyone would work remotely. This, obviously, didn't happen. 

But 2 decades later, it's starting to happen.

Upwork Study: Freelancing Providing Opportunities to Those Unable to Work in Traditional Jobs

Upwork released their 2019 Freelancing in America study. It's the 6th year Upwork has conducted this study. 

The study found about 57 million Americans are freelancing. This equates to 35% of the workforce. 

One of the most interesting study findings is that almost half of all freelancers report they are freelancing because their personal circumstances don't allow them to hold down a traditional job.

As the study chart below shows (click to enlarge), health issues and family obligations are the two main reasons people report not being able to work in a traditional job.

These findings illustrate the importance of the "low friction, highly flexible" work options freelancing provides. 

Low friction means it's quick and easy to start earning money as a freelancer, especially with the advent of online marketplaces like Upwork, Airbnb, Etsy and Uber. 

Highly flexible means freelancers can work as little or as much as they want or need and when they want or need.  This means freelancers can fit work in around other activities, including schedule limitations due to health or caregiving responsibilities. 

We've long pointed out that many people need greater levels of schedule flexibility than is provided by traditional jobs. 

This is especially true for those needing to work part-time to supplement their income. 

More broadly, flexibility is almost always the top reason people become and like being a freelancer. And Upwork's study again found this, with over 3 out of 4 freelancers listing this as a major reason they are freelancing.

Many critics of freelancing say flexibility is overrated or doesn't really exist, especially for gig workers who get their work via online platforms and marketplaces.

We tend to believe freelancers and gig workers over these critics.  And they consistently tell us work flexibility is both important to them and real. 

Uber Enters the Staffing Business

Last week Uber announced Uber Works, a platform that connects workers with businesses that need to fill available shifts in hourly jobs such as cooks, warehouse workers, commercial cleaners and events staffing. 

Uber's chart below (click to enlarge) provides their quick description of the service.

Uber is partnering with staffing firms for this effort. The staffing firm partners will employ, pay and handle worker benefits.

This, of course, means Uber will not have to deal with the employee classification or other legal issues they faces in their ride hailing business.

Uber betting that their technology will provide value to workers, the companies that employ them and the staffing agencies that place them. 

They point out in their blog post announcing the service that temp workers currently struggle with rigid scheduling and a lack of information on what jobs are available and how much they pay. They claim Uber Works will fix these problems. 

For businesses, Uber says they can provide a broader pool of potential temp workers and simplify the hiring and payment of these workers. Staffing firms benefit from more placements and better information flow.

Uber's obviously not the only company offering this type of platform.

Wonolo, Snag and Moonlighting all have similar platforms in the sense that they offer businesses access to shift workers. 

Also, Shfitgig, which recently pivoted away from connecting workers to jobs, now offers staffing firms a technology platform that claims to provide many of the features Uber is offering. 

And, of course, several of the large staffing firms are trying to provide similar online staffing platforms.

This includes Uber's first staffing firm partner, True Blue. Their platform, Job Stack, seems to be quite similar to Uber Works. 

So there's a lot of competition for Uber Works.

But the market is also huge. According to the Staffing Industry Analysts, the global staffing industry generated $490 billion in revenue in 2018. 

This, coupled with Uber's brand recognition and technology skills, means they could easily be successful.

Uber Works is currently only available in the Chicago area. Uber says they will roll it out to more cities in the near future. 

MetLife Study: 45 Million U.S. Gig Workers and 85% of them interested in Continuing as Gig Workers

MetLife recently released The Gig Economy: Opportunities, Challenges, and Employer Strategies. Key quote from the study press release:

The report’s findings demonstrate the fundamental impact gig work is having on the American workforce in the changing work-life world, as employees are increasingly drawn to the allure of flexibility, autonomy and desire for purpose in their work.

The study is well done and found, like almost every other study of independent work, that the independent workforce (freelancers, self-employed, gig workers, etc.) is large and most independent workers want to continue as independent workers.

Key quote from the study report:

Today, almost 30 million Americans get their primary income from gig work, constituting nearly a fifth of the total workforce. An additional 15 million workers supplement “traditional” full-time work with “gigging/freelancing.” This number keeps growing, as many of the best and brightest workers turn to gig for their primary employment.

Another key quote is on why people like independent work:

“Our research shows that workers are turning to gig in the pursuit of creating the ultimate work-life blend where their careers meet income needs, provide a flexible schedule, and also give them a sense of purpose”

At this point, we think we've reported on well over 100 studies showing that the independent workforce is large and most independent workers are satisfied with being independent.

These studies have come from a wide variety of sources - government agencies, academics, think tanks, consulting firms, and companies. 

And despite the roughly 14 years we've been researching the independent workforce, we are not aware of a single, reputable study not showing that the independent workforce is large and most independent workers are satisfied with being independent.

So, you may ask, why are we bothering to repeat ourselves and report on these results?

The reason is we regularly read in the press and have people tell us the independent workforce is small and most independent workers would prefer a traditional job.

This despite the overwhelming evidence this isn't true. 

So we'll keep pointing to these studies until this changes.

The Economic Impact of Craft Brewing

The Brewers Association recently released their small and craft brewing economic impact report for 2018. 

The study found that the craft brewing industry contributed $79.1 Billion to the U.S. Economy in 2018 and provided directly and indirectly about 550,000 jobs. 

These numbers are based on what are called economic multipliers, which are used to measure both the direct and indirect impact of economic activity.

For example, the employment multiplier for auto factory workers is about 7. This means for every auto factory job gained or lost, 7 other jobs are gained or lost. These occur in suppliers to the plant as well as places where auto workers spend their money. 

As the chart below shows (click to enlarge), the number of actual jobs at breweries has grown quite rapidly, to 77,902 in 2018 from just 24,864 in 2010. 

This means brewing was one of the fastest-growing sources of employment during that time.

We've long used craft brewing as an example of the rise of niche businesses. We even featured the industry in a 2008 research report, The New Artisan Economy, which we did with Intuit.

And the three broad trends we laid out in the New Artisan Economy report as driving the growth of niche businesses continue to do so:

1. Growing numbers of customers are looking for unique, unusual, personalized or locally produced products.  

2. The Internet and online marketing have made it much easier to find or be found by people interested in buying niche products.  

3.  Technology is lowering the costs of serving niche markets and making artisans able to compete with even the largest of firms.