Creativity as Commodity—a Challenging Climate

Read Time: 8 minutes

Ted Leonhardt sits down with SEGD as part of three-part series to discuss how creativity has been commoditized, how it affects designers and how to succeed in the current climate.

Design Leadership Consultant and Strategist Ted Leonhardtis dedicated to helping creatives thrive in the modern world—so much so, that after years of working in brand design leadership in 2005, he began a consulting practice focused primarily on helping designers and design firms develop more effective negotiation skills. Since then, his client base has broadened to all creative fields, and he employs training films, comics and in-person sessions to further his goal of helping all creatives receive full value for their work.

Right now, he’s writing a book on commoditized creativity, and he’s angry. Leonhardt writes:

“I’m angry. Angry that my creative energy has be used to build, sell and enable things that don’t make the world better. Angry that I and all creatives have been getting an increasingly smaller and smaller portion of the wealth this economic system provides. Angry at the lack of respect that I and my creative colleagues are subject to. Angry that we have knowingly and unknowingly been contributing to destroying the planet for our children and their children.

If you’re not angry, you should be.

There’s also a lot of depressing data out there; it’s a tough time for all workers, not just creatives.

  • According to NPR,one in five Americans are in contract positions
  • In-house creative groups are increasingly common
  • More than half of us will be freelance by 2027 says Forbesmagazine
  • A recent Northwest Editors Guildfee survey showed editors (some PhD holders) working for as low as $15 an hour
  • Small creative firms are routinely forced to accept low fees in response to corporate pressure—in spite of an expanding economy
  • According to a Payoneer survey,without taking into consideration any factor (like industry, location, and skill level), freelancers on average charge $19 per hour
  • AIGA, the professional association for design salary surveyshave shown essentially flat growth since the 1990s

 

Yes, there are a few creatives making over $100 an hour—and occasionally more—but the vast majority are working for close to the minimum wage. Why?

  • Corporations find it cheaper to contract rather than employ
  • Temporary employment agencies and online freelance platforms commodify workers by setting prices
  • For most workers, real wages haven’t changed in decades
  • Traditional creative services like branding and video have become commoditized
  • Corporations strive to keep cost low and profits high
  • The internet makes access to workers from lower cost markets possible for anything that can be done digitally

 

The deck really is stacked against creatives no matter how well-developed our expertise, comprehensive our training, or how impressive our portfolios look.

What I’m urging creatives to do is to create organizations that offer new ways to use creative power. Insights that help individuals and groups grow and prosper. Creative insights that provide the leverage and respect necessary for marketplace impact and a better life for people. The kind of impact that results in money.

The problem is that creativity has become commoditized by the marketplace and those who dominate it. The solution is to do what creatives have always done: create a new way.”

The following interview has been edited for length and clarity.

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Functionally, contract and freelance positions are different, but which do you find is a better option for creatives in terms of making ‘what you're worth?’

TL: In my experience, neither freelance nor contract positions offer high compensation opportunities unless your skills are rare or in high demand for some reason.

In contract positions, the corporation sets compensation and individual creatives have little negotiating power. However, these positions typically offer more steady work than freelancing. So, if steady work is offered for a fixed duration that’s an advantage. If, as a result of your good work a corporation offers you full-time employment, you have more leverage and negotiation is possible. To succeed you need to feel okay about working for a corporation in a position often in close proximity to those who hold more respected full-time positions. I’ve had many clients who are uncomfortable in that second-class role.

As a freelancer, you have the ability to negotiate each opportunity that comes along. So, the potential is there to ask for—and get—more. The problem is, that as an individual you tend to be viewed as of less value—and worse, if you’re feeling needy and have paltry experience negotiating, you can fall prey to your emotions and give in to a client’s demands for bargain basement prices. To succeed as a freelancer, you need the discipline to consistently market yourself, the confidence to ask for what you are worth and the negotiating skills to get it.

I believe creatives should view contract and freelance as short-term or transitional sources of income used to support yourself while you search for a full-time corporate position, which offers more security, or a position within a supportive group. The kind of group, which needs you and allows you some control over your future.

 

What about working with a staffing agency that offers benefits and stability?

TL: I have clients and acquaintances that love working through staffing agencies. They tell me that they get enough work to be busy and they enjoy not having to market themselves. In the big west coast cities, along with Chicago, Boston New York and other hot markets, these staffing agencies provide a valuable service if your skills and experience fit their clients’ needs.

The downside is that you’re vulnerable when you have only one source of income and you haven’t developed the skills to market yourself. Again, I’d view working through staffing agencies as transitional.

 

Freelance life can be a hard-won hustle and lonely at times—but is it worth it monetarily? What are the reasons to choose it?

TL: Most of us chose freelance because we don’t have a better option for income or for additional income as in a side hustle: we’re between jobs, live far from a big city, need to make some extra money, are looking for a change, were laid off, or need to have a more flexible schedule. I’ve heard all these reasons. And, loneliness is the common complaint right after finding enough work when a dry spell hits.

 

Has the boom of design work ‘commissioned’ online from overseas or on competition/spec work sites ended, or just begun?

TL: Designers and other creatives from lower-cost markets are going to become increasingly skilled and better at competing for ‘first world’ work. That’s just the nature of the human spirit. So, I’d expect ever more sophisticated competition from India and elsewhere.

 

Experiential graphic design is a specialized field, with niches that require special knowledge (like ADA compliance). Does the commoditization of traditional creative services like branding and video impact EGD work in the same way?

TL: Any skillset that consistently grows corporate profits is eventually brought in-house. In the 1960s and 70s, industrial design firms had employment in the hundreds and thousands until computers entered the picture and hand drawings were no longer needed. In the 1980s advertising agencies gobbled each other up and became financial instruments traded on Wall Street, flourishing into the 90s, thinking the money would flow forever. It didn’t.

The combination of technology and greed has driven these trends in one way or another since the dawn of the industrial revolution and the growth of capitalism. Environmental graphic design has undoubtably already been affected by these trends. My guess is that wages and fees for EGD work have not risen since the 1980s.

 

Freelancers are on average making $19 per hour: Is this because they undervalue their time, underestimate when making a bid, are lowering prices to compete, or something else entirely?

TL: The Payoneer survey data was from the United States, only. Relentless market forces have caused all middle-class incomes to shrink since the ‘80s. Freelancers are just as vulnerable to these market forces as anyone else. The loss of labor unions and worker rights and the focus of corporations on cost control are two examples of this trend. It’s become acceptable for corporations to focus entirely on increasing profits at the expense of workers. The ethics of corporate management have shifted dramatically in the last quarter century.

 

What are your theories on why design salaries aren’t growing?

TL: The economy has grown substantially since the 90s. Wall Street was way up during the Obama years, and almost as much under Trump. Sales revenue for publicly traded corporations dipped during the 08-09 recession, but profits remained high as a result of cost control. CEO pay rates have risen to all-time highs. The number of billionaires has grown dramatically. Google it.  

With all this growth in wealth for those that hold stocks or senior positions in corporations there’s been no growth in wages or fees for anybody else—including us creatives. Studies show that middle class incomes have risen only 14% over the last 30 years. That’s less than ½ a percentage point per year. Far below inflation. (adjusted for inflation)

The latest AIGA survey—just out—says designers are making $65,000 on average. That’s about what The Leonhardt Group paid designers in the 90s.

It’s not about computers and software. It is about corporations doing everything possible to keep costs down and profits up.

 

It’s hard to ask for what we're worth, but add on top this market that is driving salaries and per-hour design rates down—what is a tactic to combat this disturbing ‘new normal?’

TL: Most importantly, to know how to construct an offer that demands money and respect because of its inherent goodness, virtue and benefit to society and the world at large.

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The conversation continues in parts two and three, wherein Leonhardt proposes a new way forward for creative businesses. Stay tuned!

 

 

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