The ‘self-employment penalty’ emerging in WordPress

Community participation is a benefit for employees - and a huge cost for freelancers.

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Pretty much everybody in the WordPress community started out as a freelancer – it’s just the natural career progression for many designers, developers and writers. As the industry has grown, the companies that “do WordPress” have gotten bigger, and some of those freelancers have now become employees of companies with bigger budgets. My company is a microcosm of this trend – we’ve grown from solopreneur to 20+ employees over the past few years.

This isn’t a bad trend overall – but it has had some perverse outcomes for the people who remain freelancers or very-small-business owners. They are increasingly being boxed out of opportunities by the employees of larger companies. Case in point, this analysis by Women in WP of the attendees of WordCamp US 2022.

This conference is a huge career-building opportunity. Tickets sold out in just 82 minutes, so large companies like mine who literally had a person sitting there at the moment of launch got lots of tickets. Freelancers or self-employed folks – or really just anybody who was busy or didn’t set an alarm for 10 a.m. Pacific – got locked out because tickets sold out so quickly.

However, even for the people who got tickets, there’s still a self-employment penalty due to the cost of travel.

For employees, travel to the conference is generally covered by the employer – it is an added benefit on top of salary, increasing your total compensation. For the self-employed, travel costs come directly out of pocket and reduce your total annual income. For this conference, travel averages around $1,500 per person (plane ticket and a few hotel nights).

In our WordCamp Travel Sponsorship Program, we’ve spoken to dozens of folks who need help with those travel expenses. I have also seen that it is a huge barrier to people even considering applying to be a speaker, since speakers have to pay for their own travel to the conference. By providing folks with a travel stipend, we remove this huge barrier to participation. Almost everybody who’s applied for the stipend has been self-employed – because they’re the ones who are most disadvantaged by the large expense required to participate in a career-growth experience like WordCamp.

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This is an area where I think WordPress’ longstanding focus on “volunteerism” has become misguided. Yes, when we were all freelancers, the volunteerism made sense. Now that a big portion of the participants are getting paid by million- or billion-dollar companies, the freelancers are at a huge financial disadvantage. They are not able to participate equally, and thus the advantage for the employees compounds over and over again, eventually becoming insurmountable.

As an example of how I think the focus on volunteerism has overstayed its welcome, let’s look at a conversation with WordPress co-founder Matt Mullenweg from about two months ago. Post Status Editor Dan Knauss had suggested that WordCamp organizers should get paid for their labor. These organizers work their butts off for months, but don’t get paid unless they’re an employee of a large company (again, the self-employment penalty). Mullenweg responded:

“Volunteering at WordCamps is a really amazing way for people to give back and has a super high impact, I wouldn’t want to remove that as an avenue for people to be a part of the community. There are a number of sponsored folks on the community team that help provide infrastructure, accounting, etc for all WordCamps.

“WordCamps are meant to be local, so travel is usually not a barrier for folks. It does mean there needs to be more local outreach and development of speakers.”

Matt Mullenweg on July 17, 2022

You can see how outdated this perspective is. First, there at least three major national or contintental events (WordCamp US, Europe and Asia) that clearly require significant travel expenses. We know from our sponsorship program that this was a big barrier for a lot of people.

Meanwhile, Mullenweg distinguishes between the “sponsored folks” (people getting paid by their employer) and “volunteers” (mostly self-employed people) but doesn’t seem to see a problem with that arrangement. In my experience, there are often multiple people working side by side on the exact same work, where one is paid by their employer (i.e. they get paid for their labor) while the other is not (they are self-employed and thus are doing free labor that reduces their total possible annual cash income).

The same issue arises when contributing to WordPress via Five for the Future, which we’ve discussed at length in our Funding the Future of WordPress series. We know it would be great for more people to contribute to the open-source project. But the people most able to contribute are the people already employed by major companies, since the company pays them for their time. Freelancers and self-employed people, by contrast, have to reduce their possible annual income by sacrificing potentially paid time in order to donate their skills to the WordPress open-source project. You end up with individuals working on the same exact thing, but being treated unequally and – in my view – unfairly.

In the past I’ve written longer posts about paying WordCamp speakers and paying open-source contributors, so I won’t rehash all those points here. I believe in putting your money where your mouth is – which is why my company has paid $1,500 in travel expenses for six WordCamp speakers, organizers and volunteers via the MasterWP Travel Sponsorship Program. Next year my goal is to make travel reimbursement the default, rather than the exception, for the big WordCamp events.

That all said, I think it’s important to acknowledge that the WordPress self-employment penalty is a big problem that is getting worse. It seems to disproportionately affect people from underrepresented groups – the Women in WP assessment being just one example – and will continue to have a disproportionate effect on these folks until all the big companies reach racial and gender parity… which is at least years (if not decades) into the future.

WordPress has always embraced freelancers and the self-employed, and I think we’ve accidentally lost our touch. By ensuring self-employed people aren’t financially disadvantaged in their opportunities to contribute and participate in community events, we can get our freelancer vibe back.

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Rob Howard is an editor at MasterWP and the CEO of Howard Development & Consulting, the company behind WP Wallet.

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