Capitalists and Cheapskates on Craigslist

In these days of economic turmoil, in which large employers are abandoning any sort of commitment to the well-being of their employees, it is not surprising that many people are considering self-employment. Self-employment is attractive for a couple of reasons. First, a savvy entrepreneur can become independent of fickle, unreliable employers. A successful small businessman or businesswoman can therefore earn a living while being free from the fear of “downsizing.” Second, self-employment is “controllable,” at least on paper. That is, there need not be some external agent such as as boss forcing the self-employed person to work like a dog for sixty or seventy hours a week, while barely earning a living wage. In principle, the self-employed person should be able to set his or her own hours in order to live a manageable life.

The ability to form and use networks is a key for the self-employed. Not very long ago, such networks were built out of relationships – between service providers and satisfied customers, between service providers and trusted suppliers, between friendly fellow practitioners. Such networks were, in a sense, “owned” by all the users thereof. Now, such networks have largely become electronic. Everyone advertises and talks to each other on line these days.

It is instructive to trace the migration of relationship-building from the physical world to the cyber-world. There are several good examples of this from recent history. One such example is Craigslist, which started out simply as one means out of many by which a collection of friends with similar interests networked with each other. (See Craigslist from Wikipedia.) Craig Newmark's e-mailed list of things of interest to him expanded beyond his circle of friends as friends talked with other friends, and soon his list was a big, popular thing with the potential to make a lot of money for its owner.

For things that have no monetary value, or for the sort of “garage sale” things that people sell or trade, Craigslist still has value in connecting ordinary people with ordinary people. But while in its earlier days, Craigslist was a good way for small-scale entrepreneurs to connect with each other, it no longer seems very useful to the self-employed.

The problem is the capture of Craigslist and other on-line venues originally created for ordinary people to connect with each other. Nowadays, most of the people who advertise for jobs or offer services on Craigslist seem to be large corporations, or are start-ups backed by lots of venture capital from heavyweight “investors” looking to corner the market for some service. Thus many of the things that could at one time be done by ordinary people in order to get by without a regular job have now become commodities meted out to the public via growth capitalists. Those who are trying to escape from being turned into commodities are discovering that even self-employment is now being commodified.

There are many signs of this commodification. Are you smart? Did your education give you a solid background in mathematics? Now that your office job has dried up, you may be thinking, “Hey, I could tutor high school kids in math!” But beware of trying to drum up business via Craigslist. Tutor Doctor, Complete College Prep, and a host of other big, multi-state services will eat you for lunch if you try to set up as an independent tutor. Of course, you could always surrender and go to work for one of these outfits. They typically charge around $45 an hour for tutoring – but they will pay you around $20.

Let's say that tutoring isn't your thing, but you have a strong back, work hard and like cleaning houses. I know people who put themselves through college by cleaning houses, and they worked as independent small businesspersons. They couldn't do it today – not with people like The Cleaning Authority, who have massive advertising budgets and massive budgets for placating the legal system. Do you like kids? Want to be a nanny? Beware, because there are venture capitalists trying to capture the nanny market as well. In fact, at least one firm which has advertised on Craigslist offers to meet all your domestic needs – housecleaning, tutoring and nanny services – all from one provider. How convenient.

The commodification of things which used to fall under the category of self-employment has led to other harmful outcomes. Those who do domestic work or tutoring for these firms must increasingly submit to onerous and invasive background checks and must provide extensive references, often for jobs that don't pay more than $12 an hour. (A lot can be said about the burgeoning “background check” industry, by the way. More on that in another post.) This has emboldened private parties looking for services to ask for the most outrageous things while offering the most outrageously cheapskate compensation. Just this past week I read an ad posted by someone in Lake Oswego (a rapidly evaporating enclave of people who once thought they were rich) asking for a tutor to provide after school instruction and supervision to a couple of kids. The prospective tutor was to provide an extensive list of references for this most important job – in exchange for $5 an hour plus gas money!

The commodification of self-employment has emboldened some people who are as yet untouched by our ongoing economic collapse to try to use their fellow men and women as slave labor. These people are wanna-be capitalists who think they can get something for nothing from their fellows just because times are hard. So they post ads on Craigslist for “nannies” and “tutors” who must provide multiple references and submit to a background check and fingerprinting in exchange for chump change, or for nothing more than “free room and board.”

Self-employment is a valuable and viable means of coping with hard times. But I think that those who want to make a successful go at it will need to re-learn the art of building networks of relationship outside of the Internet. Networks of personal relationships cannot be easily co-opted by capitalists and cheapskates.