Wednesday, September 19, 2018

Last Call For The Company Store, Gig Economy Edition

Already more than a third of working Americans are contract/freelancer/temp workers, and we're rapidly approaching the point where the majority of American workers will be freelancers with zero benefits in under a decade

If freelancing continues to grow at its current rate, the majority of U.S. workers will be freelancing by 2027, according to projections in the Freelancing in America Survey, released today by the Freelancers Union and the giant freelance platform Upwork. The survey found that 50.9% of the U.S. population will be freelancing in 10 years if a current uptick in freelancing continues at its current pace.

But those American workers still get paid nominally, and that means one of the fastest-growing industries in the US financial sector is payment services.  If you thought payday loan sharks and mortgage giants were predatory parasites, wait until tens of millions of us start getting paychecks in the gig economy through companies like WorkMarket that exist literally solely in order to take a healthy chunk of your income.

“Now for the first time, thanks to Fast Funds Mobile,” as WorkMarket VP Mousa Ackall wrote in January of 2017 when announcing the service, “freelancers can gain instant access to their funds via the WorkMarket mobile app – offering the level of flexibility and effortless mobility that modern workers crave.”

Ah, finally, the level of flexibility and effortless mobility I deserve.

I did not happen to be in dire need of the money right away that particular month, but as a freelancer, there have certainly been times in my life that I might have been tempted to take the devil’s deal. There are no shortage of people in more tenuous financial situations that might not be able to turn it down. In fact, as Jens Audenaert, general manager of WorkMarket explained to me, it’s proven to be an exceptionally popular feature and its use continues to grow. Weird!

Michael Sainato is one of them. He’d written a piece for the Huffington Post about Standing Rock activists in July. After a month of waiting to be paid, he was told to sign up for WorkMarket as well. A couple of weeks later, he got a notification that the $400 he was owed was available to him, but the only clickable option to withdraw the money was on something called FastFunds, something he’d never heard of. Confused and clicking around on the site he said he somehow selected the payment option, and $30 was subtracted from his invoice. He told me that while it was a mistake, he would have taken the cut regardless, because the payment was already exceptionally late and he was hard up for cash that month.

“It’s absolutely predatory,” Sainato told me. “You shouldn't have to be charged to get paid in a reasonable amount of time and HuffPost is well aware that freelancers tend to have financial issues in that they can't push off being paid several more weeks, few people can.”

“No one would reasonably spend $30 or more on [getting paid] unless they were financially put in a position where they couldn't afford not to.”

While the idea of early payment discounts aren’t novel in large industries like construction or manufacturing, where suppliers might arrange to let a company pay less than full price of an invoice if they do so in a prompt fashion, and factoring is a longstanding tradition, in which businesses sell their accounts receivable to a third party in order to facilitate having cash flow on hand more quickly, the concept coming to individual creative industry workers is novel, and yet another example of how media professionals, and freelancers in particular, are being preyed upon.

Ahh, but should you think this is only for freelancers, think again.  The rest of us will be getting these "new payment options" very soon.

The early payment model WorkMarket is using is part of a movement across the economy at large to let workers, often hourly workers, access the money they’ve already earned earlier than usual. Walmart announced last year that its workers would be able to withdraw from their paycheck early up to eight times a year for free through a service provided by PayActiv, one of a fast-growing number of instant-pay apps that look to be the future of hourly employment. PayActiv likens the fees they charge employees accessing their own money ahead of payment schedule as akin to an ATM service charge.

Fifth Third Bank was savaged when it offered the exact same service a few years ago and charged $10 bucks to get $100 early, when you needed the money up front this week to pay a bill, it was cheaper than A) the late fee from missing the bill payment, B) the overdraft fee from the bank for trying to write a check Friday for a deposit that wouldn't clear until Monday.  But the bank was sued when people realized that it was a 200% APR loan with a 35-day period, and payday lenders were pissed that real banks were getting away with their con.

That was during the Obama years.  Now in the Trump era, the wild west of "payment services" to access your own money is here to stay.

And everyone will get their cut before you will ever see a dime.

The Blue Wave Rises, Con't

Democrats may be on their way towards making impressive gains in the House and Senate nationally, and at the state level in winning back several governor's mansions...but true blue Maryland is not going to be one of those states.

Maryland Gov. Larry Hogan holds a commanding 22-point lead over Democratic challenger Ben Jealous in a new poll that suggests the Republican is consolidating substantial support from groups that traditionally back Democrats in the deep-blue state.

The Goucher Poll, released early Wednesday morning, found likely voters favor Hogan over Jealous by a margin of 54 percent to 32 percent. Undecided voters have dwindled to just 9 percent of the electorate, the poll found, meaning Jealous must win the lion’s share of persuadable voters and bank on dramatically heightened Democratic turnout to have a shot on Election Day.

In addition to Hogan securing his Republican base by large margins, the poll found he had the support of 38 percent of Maryland Democrats, who outnumber GOP voters in the state by more than 2 to 1.

Even though most voters support the issues on which Jealous has campaigned — a $15-an-hour minimum wage, boosting education spending, and Medicare-for-all — they trust Hogan more on education, the economy and health care, the poll found.

“They like the issues, but they haven’t connected them to Jealous,” said Mileah Kromer, director of the Sarah T. Hughes Field Politics Center at Goucher College in Towson, Md., which surveyed 472 likely voters from Sept. 11 to Sept. 16. “It’s clear that Ben Jealous needs to introduce himself to Marylanders.”

While Hogan and the Republican Governors Association have spent more than $2 million in a sustained advertising blitz in Maryland since June, Jealous launched his first television adMonday, with a modest buy in the Baltimore market. The Goucher poll — the latest to show Hogan with a double-digit lead in the race — was completed the previous day.

A quarter of voters identified the economy and jobs as the most important issue that would determine whom they picked in the governor’s race — more than any other topic. That bodes well for Hogan, since likely voters said they thought he would handle economic development and job creation better than Jealous by 66 percent to 23 percent. 

Ben Jealous has done an abysmal job of campaigning so far.  It's so bad for him that Hogan is getting more than a third of the black vote in the state, and women prefer Hogan by 9 points, 47-38%.  And despite Donald Trump being next door, only 40% think he's a factor in the race at all.  Both Trump and Hogan have ignored each other, and that's fine with both of them.

Jealous is winning with voters under 35.  Millennials prefer him by 20 points.  The problem is voters over 35 prefer Hogan by more than 30 points, and there's a lot more voters over 35 that actually vote in midterms.

If younger voters showed up to the polls in Maryland in record numbers, then yes, Ben Jealous would have a real shot at this race.  Hogan's not terrible for a Republican but in 2018, he still chooses to be a Republican, and that's a disqualifying move as far as I'm concerned.

But since Millennials don't actually vote, and especially, aggressively don't vote in midterms, Hogan will be reelected and win walking away.

There's a lesson here for those who choose to learn it.

Florence And The (Farm) Machine

We're just now starting to get a picture of the billions in dollars of damage to North Carolina, South Carolina, and Virginia from Hurricane Florence and the record flooding, especially in eastern NC.  The losses in lives are tragic, but there's also the aftermath of thousands of pigs and millions of chickens in Carolina farms that are gone, and with them, the livelihoods of tens of thousands still reeling from Hurricane Andrew two years ago.

The number of hogs and poultry killed in Hurricane Florence flooding is already double the casualties from Matthew in 2016, and the losses are expected to mount this week as new information comes in from farmers as they gain access to their properties.

Meanwhile, the number of hog waste lagoons in North Carolina that are damaged or overflowing continues to increase.

The N.C. Department Agriculture and Consumer Services said Tuesday that so far 3.4 million chickens and turkeys have been killed by Florence, and 5,500 hogs have perished since the storm deluged the state. In preparation for the advancing storm, farmers were moving their swine to higher land, but the intensity of the flooding exceeded all expectations. The N.C. Pork Council said some of the hogs drowned in floor waters, others perished from wind damage barns.

The agriculture agency provided no details as to which counties or farming operations suffered the losses. The only specifics have come from a note to investors issued by Sanderson Farms, saying that flooding claimed 1.7 million broiler chickens out of its 20 million in the state, ranging in age from 6 days to 62 days.

Sanderson Farms said that 60 broiler houses and four feeder houses were flooded. Farmers, who are contracted to Sanderson, could be out of power for as long as three weeks, and are running on emergency diesel fuel. Sanderson Farms noted that about 30 independent farms that supply its chickens are isolated by flood waters and unreachable at this time. Each of the farms houses about 211,000 chickens, totaling more than 6 million birds that can’t be reached with chicken feed.

Perdue Farms said it was largely spared by the storm.

“We experienced minimal impact on our live operations, with partial losses at two farms raising our chickens,” spokesman Joe Forsthoffer said by email. “Our feed mills are operating normally and we’re delivering feed to farms. We moved birds from low-lying farms in advance of the storm.”

During Matthew, which struck in October 2016, the poultry industry lost 1.8 million birds, while 2,800 hogs perished, according to state Department Agriculture. North Carolina farming operations total 819 million head of poultry and 9.3 million hogs.

The N.C. Department of Environmental Quality said Tuesday that four open air lagoons that store hog waste have structural damage, up from two known pits whose retaining walls were compromised as of Monday.

The environmental agency said 13 lagoons are overflowing from heavy rainfall and 55 are close to the brim and could overflow if water levels continue rising.

If Andrew was a head shot to the economy of the sandhills, Florence was a mortar round right through the window.  The economic, environmental, and consumer impact of the storm will be felt in this area for years to come, and there's every reason to believe that in the years ahead, Atlantic hurricanes will only be more powerful and more common.


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