Here’s a terrible chart.
It’s from a Morgan Stanley note all about the side-hustle economy. The Crayola scribble is intended to show how Americans have embraced their multi-earner potential much faster than they did electricity and flush toilets.
Crypto, podcasting and Amazon Prime membership are categories “exposed to the Multi-Earner theme” that are already at critical mass penetration-wise so are okay for investment, Morgan Stanley shows via this only slightly less bad chart:
There’s a wider point, though having lived through it you’ll know it already. It’s that leisure-time jobbing is having a moment. The Morgan Stanley research hangs on an online survey of about 4,000 UK and US citizens aged 16 to 55 that found nearly half were gigging or gambling for extra income.
It’s straightforward, wide-angle stuff. Boredom and necessity through the pandemic have encouraged significant numbers to test their screen-bound incremental earnings capacity by making, selling, trading or whatever it is that DAOs are doing. Work apathy has been handy for all sorts of get-rich-quick schemes.
Pandemic-formed habits might stick, particularly among the digital native Generations Z and Alpha (born after 1997 and 2012 respectively) for whom wage growth has been lagging productivity their entire lives. And so, an industrial complex of current and potential Morgan Stanley clients has arrived to take its skim:
Is the volunteer workforce making good money? Survey says no. Self-reported wages run from about $9 an hour for content creation to about $3 an hour for play-to-earn gaming. That’s not great relative to proper work. Twenty-eight US states enforce a minimum wage higher than $9 an hour and none is allowed to disregard a $7.25 per hour federal minimum wage.
No problem, Morgan Stanley says, because poverty wages are better than none. Insipid wage growth and unaffordable housing “are creating conditions ripe for not just voluntary but necessary exploration of multiple earning streams by individuals,” it says.
The broker also finds that, by employing the simple trick of ignoring everyone over 40, subsistence wages are possible. Millennials (who make up half the survey group) are relatively more entrepreneurial. Gen Alpha (for whom there’s no survey data, because they’re not even teenagers yet) are already making money by tidying their rooms so will hopefully be more entrepreneurial still.
There’s a lot here to quibble. For starters, should financial trading (gamified or otherwise) be on the same axis as Youtube content farming and fulfilled-by-Amazon import export? Look past the WFH thing and these pursuits have very little in common beyond their high susceptibility to survivorship bias. The unforgiving economics of Roblox and Instagram are unlikely to have moved much since the survey ran in February, whereas Nasdaq’s subsequent 13 per cent slide and the NFT market’s implosion will have eroded many of those trade-to-earn averages.
And since inequality is hardwired into online economies, what use are averages anyway? From online poker and crypto punting to email writing, podcasting, videogame streaming, bum photography and cryptid husbandry, rewards pool at the very top end. That’s not helpful for the approximately two-thirds of survey respondents who want their hobbies to eventually become a primary source of income . . .
. . . . and spells likely disappointment for the approximately two per cent of respondents who intend to join the Cryptoblades pro circuit within the next 12 months:
Also, where’s the 18+ content? OnlyFans gets just one mention, in a client-friendly chart about how decentralised create-to-earn platforms like Audius (a Spotify challenger) and Sandbox (a crypto-metaverse thing) take lower commissions but attract hardly any users. “People create art, music, games, etc,” says Morgan Stanley, without ever defining the etc. In what’s meant to be a decades-relevant thematic overview that deploys 30 bylined authors across its 86 chart-filled pages, coyness is unhelpful.
Industry-specific case studies towards the back of the note acknowledge some of its limitations in scale, scope and methodology. None seems to inform the grand thesis, however, which is that in a stall-speed economy a worker freed regularly from the corporate panopticon will supplement wages by busying themselves with, you know, whatever.
And from that rudimentary premise emerges a fantastical make-your-own trillion-dollar Total Addressable Market matrix that’s ideal for back-engineering the desired valuation on your pre-IPO fundraising round:
By the way, in case you’re wondering:
Source: ft.com
