Underestimating the Hustle: Fiscal Authorities and the Burgeoning Creator Economy
Paul Donovan, the chief economist at UBS Global Wealth Management, has recently shed light on a startling realization: fiscal authorities and statisticians have been consistently underestimating various types of economic activity, with side hustles being the poster child for this statistical blunder. Apparently, the numbers don’t add up when you’re trying to quantify the hustle of the modern-day entrepreneur — a pointer to the genius of our “creator economy.”
In a riveting op-ed for the Financial Times last month, Donovan unveiled a significant milestone: according to WPP Media, creator-generated content is set to earn the same global ad revenue share as radios and newspapers by 2025. That’s right, folks, while your grandparents are still holding onto their old radios, the rest of us are busy monetizing TikTok dance challenges.
“Advertising revenues aren’t flowing to traditional platforms,” Donovan quipped. “To communicate in today’s world, one merely needs to locate a 15-year-old with an iPhone and a knack for grooving.” Yes, forget strategic marketing meetings; the golden ticket to success lies in mastering the cha-cha slide—or whatever the kids are doing these days.
Of course, while some influencers are raking in the dough solely from their online antics, most content creators are likely struggling to make more than a decent cup of coffee from their side hustles, Donovan noted. But fear not! A wider demographic can jump on this economic bandwagon. Musicians, for instance, can now release their tunes on streaming services, taking a shortcut around the gatekeepers known as record labels — can I get a hallelujah?
“Online marketplaces are overflowing, allowing anyone with a half-baked idea to find a customer without the pesky overhead of renting a physical storefront,” Donovan elaborated. It’s a digital utopia where you can sell handmade macaroni art directly to that one aunt who claims it’s “the next big thing.”
However, measuring this economic revolution is like trying to catch smoke with your bare hands; “social media influencer” doesn’t even merit a mention in labor force surveys. And, surprise, surprise! There’s a tendency to underreport growth partly due to these glaring oversights in data collection—who would have thought our nation’s economic data could be so…imprecise?
Donovan aptly noted that while side hustles thrive on minimal fixed costs and a vast potential market, data collectors prefer focusing on giant retail chains rather than my cousin’s Etsy page selling artisanal unicorn hair. But the real kicker? The side hustle has actual economic value, yet the hard work that goes into it is often brushed aside, leaving countless creators thinking, “I know I worked hard, but apparently, no one else does!”
To add to the mix, figuring out how to tax side-hustlers is a headache for fiscal authorities. Because taxing every minuscule venture often costs more than the revenue generated, many sole proprietors get to claim exemptions on their income. But hot tip: as the winds of tax policy shift, these exemptions may soon be as mythical as the unicorns in your kid’s drawing.
Take Florida, for example, where a Republican gubernatorial candidate recently proposed a staggering 50% “sin tax” on OnlyFans creators — ostensibly to fight “cultural degeneracy” and scold young women into silence. Content creator Sophie Rain fired back, declaring it “the dumbest thing I’ve ever heard.” Good for her! “No one ever forced me to start an OnlyFans,” she declared. Whatever happened to freedom of choice? Guess that’s a side hustle we can all agree on!
