NEW YORK (BLOOMBERG) - America's youngest workers want to become business owners - just not in the way their parents might envision.
The drive to turn social media posts into sustainable income is highest among the youngest generation of workers, according to new research by Adobe. About 45 per cent of Gen Z creators surveyed said they aspire to own a business and make money from content shared online, according to the company's survey in May of more than 9,000 influencers and creators across nine countries.
Adobe defines creators as those who post social content with the aim of growing their online presence or to promote their creative work - anything from photography to music to non-fungible tokens. The influencers surveyed reported more than 5,000 followers on their primary social media platform and earn money posting content.
Gen Z content creators and influencers are part of the wave of entrepreneurship that has accompanied the labour market shake-up of the past two years. While many Americans started businesses during the pandemic lockdown out of necessity, the streak has continued, driven by a desire for flexibility and greater control over one's financial future. A record 5.4 million new businesses were started in the United States last year, according to Census data. While the monthly rate has plateaued below its 2021 peak, it has remained far above pre-pandemic levels.
Although there has been much speculation around whether this surge in small business creation was an aberration or the start of a long-term reversal, "what we are seeing is that this trend shows no signs of abating", said Dr Luke Pardue, an economist at payroll services platform Gusto.
The shifting dynamics are partly generational, he said.
"Specifically among younger workers, we are seeing this trend that even amid a tight labour market, workers are not seeing wage gains that are keeping up with inflation, so they are moving to self-employment where they can determine their compensation a little more independently," said Dr Pardue. "There isn't a lot that the nine-to-five employment can allow in terms of achieving some of the milestones that were available to prior generations."
Different dream jobs
While millennials are experimenting with having a side hustle alongside a day job, Gen Z is focused more on making a project into a career, said Ms Maria Yap, vice-president of digital imaging applications at Adobe.
Some universities, like Duke University, the University of Southern California and the University of Virginia, have responded to the shift in demand by offering classes on how to build successful social media enterprises.
The Adobe research suggests that ditching the corporate ladder for the Instagram grid can bring in a six-figure income if done full-time, though the reality is often more complicated.
Creators who monetise content make US$61 (S$85) an hour on average, according to Adobe. If done 40 hours a week, Adobe estimates this would translate to an annual income of US$122,000. Influencers polled by Adobe make US$81 per hour, which would parlay into about US$162,000 if done full-time.
Yet the boundaries are often blurred between hobbyists and hustlers, and most of the people polled by Adobe are not full-time. Content creators spend an average of nine hours a week and influencers spend an average of 15 hours a week making content. In the United States, six in 10 creators hold full-time jobs, Adobe found. If creators were to ditch their day jobs, it is not clear whether they would be able to drum up enough business to fill a 40-hour work week.
Public perception is often that content creators and influencers with more than 10,000 followers are earning a significant income, but this is far from the reality, said Ms Qianna Smith Bruneteau, founder of the American Influencer Council, a trade association for social media content professionals.
Of those who create content full-time, only about 12 per cent make more than US$50,000 a year, according to a global survey of more than 9,500 creators published in April by Linktree, a link-sharing platform popular with influencers. The living wage in Manhattan is almost US$53,000, according to the Massachusetts Institute of Technology's living wage calculator.
While some creators and influencers stumble into success, it can take countless hours of hard work without pay for others to build up a following, according to Ms Bruneteau.
"To produce content every single day, in a video-first environment - it takes tremendous work," she said. That can mean years of free content before a creator sees dividends.
"When you are just starting out, you can't expect to earn immediately. Like any small business, it takes about two years to reach break-even," she added.
Even with a large audience, monetising content is not easy - it takes substantial business acumen to pitch yourself to brands and establish partnerships. Successful creators often must work to generate as many income streams as possible across platforms, from ad revenue to merchandise to workshops and classes.
Mr Tejas Hullur, 21, is an influencer based in New York City. After starting out posting about crypto and finance over the summer of 2020, Mr Hullur said he hit his stride posting about the creator economy itself.
"It is very ironically meta, in the sense of making content for other creators," he said.
Like many of his peers, Mr Hullur quickly had to diversify his revenue stream after the income from brand deals turned out to be spotty. Still, the unpredictability of income makes it difficult to plan effectively, especially with an economic downturn threatening companies' marketing budgets.
Career longevity for influencers is also an issue. Often, Internet fame - and the money that comes along with it - does not last forever.
"We play in this world of hype. It can feel like you are on top of the world," Mr Hullur said. "I have seen this time and time again - the amount of TikTokers who were on top of the world in 2020, who still have a fully monetisable and flourishing business today, is, I would say, under 5 per cent. It comes up and then goes down."