Axios What's Next

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Many freelancers are feeling optimistic and anticipate boosting their income this year, Alex reports today.

Today's newsletter is 924 words ... 3½ minutes.

1 big thing: America's freelance capitals

Bar chart showing the metro areas with the highest average freelancer earnings in 2023, overall and by the service offered. Overall, San Jose, Calif., had the highest average freelance earnings at just over $60k per year. Nashville led in earnings for creative services at $56k, D.C. led for technical services at $75k, and San Francisco led in professional services at $61k.
Data: Census Bureau via Fiverr; Note: Analysis includes tax returns for non-employer entities with at least $1,000 in annual receipts; Chart: Kavya Beheraj/Axios

San Jose, San Francisco and Washington, D.C., are America's freelance capitals, finds a new Fiverr report, with the highest annual earnings per freelancer among the 30 biggest U.S. metros in 2023.

The big picture: Freelancers account for 4.1% of the U.S. labor force, per the report — and many seem to be finding success, with 43% reporting a revenue bump last year.

What they did: The report, which freelance platform Fiverr published in partnership with market research firm Illuminas, is based on data from several government sources, researchers' estimates and a survey of 801 freelancers conducted between Jan. 26 and Feb. 7, 2024.

What they found: The country's freelancers seem a generally optimistic bunch, with 55% expecting to earn more this year than in 2023.

  • 29% of freelancers also have a traditional job, though the share who solely freelance hit 71% in 2023, compared to 61% in 2021.
  • A "striking" 75% of freelancers with a full-time gig say they're highly satisfied with their side hustle, per the report, compared to just 47% who feel the same way about their day jobs.
  • The markets with the most new freelancers between 2018-2023: Orlando, Miami, Las Vegas, Houston, Tampa and Nashville.

Follow the money: What freelancers make can vary widely among cities.

  • Those in San Jose made an average estimated $60,135 in 2023 — hello, tech money — while those in St. Louis pulled in just $36,234.
  • Of course, San Jose and many of the other cities with relatively big freelancer earnings have comparatively high costs of living.

Caveat: The report's earnings data is based on individual tax filings as a "good approximation" for freelancers.

  • Some freelancers may be involved with more than one tax entity, while others may work together on a business that counts as a single tax entity.

Stunning stat: Gen Z freelancers appear to be acknowledging the value of their work, with 76% saying they're at least somewhat likely to raise their rates or fees in the coming months, compared to 49% of freelancers overall.

Friction point: Concerns about companies embracing generative AI are particularly pronounced among freelancers, many of whom are in creative fields and, with no strong ties to any particular employer, may feel especially vulnerable to being replaced with the emerging technology.

  • Yet the report finds that 40% of freelancers are using some form of AI themselves to help get their work done.
  • "Freelancers using AI-based tools experienced a significant boost in productivity, saving an average of 8.1 hours per week," the report finds.

Reality check: While freelancing can have its benefits — like flexible schedules and locations — it can be tough to get started, to be treated well and paid promptly by clients, and to get health care and other benefits.

What they're saying: "We are in our seventh year of putting this report together, and year over year, we see more and more people choosing the freelance lifestyle," writes Fiverr founder and CEO Micha Kaufman.

  • "It confirms my belief that independent work is the future."

The bottom line: Freelancing has challenges of its own, but a regular job simply isn't the only way to thrive anymore.

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2. Microsoft boots up AI-powered PCs

Microsoft's Brett Ostrum shows a notebook and a tablet from the company's Surface brand designed for use with artificial intelligence. Photo: Andrej Sokolow/picture alliance via Getty Images

Microsoft yesterday unveiled Copilot+ PCs, a new class of personal computers with novel AI-powered features.

Why it matters: The software giant is hoping to use the excitement around AI to drive a new hardware buying cycle.

Driving the news: Microsoft debuted two of its own Copilot+ PCs, and said more will come from partners like HP, Samsung and others.

  • It also announced a new feature, Recall, designed to help people find anything they've previously viewed on their computer.
  • And it teased a version of AI chatbot ChatGPT, using GPT-4o, coming soon to Windows.

What they're saying: "We're entering this new era where computers can not only understand us, but can actually anticipate what we want and our intent," Microsoft CEO Satya Nadella told reporters at a press event.

Go deeper.

3. Cities' public school conundrum

A bar chart showing the change in U.S. public school enrollment and number of schools between the 2019-2020 and 2022-2023 school years. Enrollment is down in urban, suburban, and town areas, and up in rural ones. The number of schools has decreased in urban and town areas, and is up slightly in suburban and rural ones.
Reproduced from WSJ via the Brookings Institution; Note: Excludes virtual schools, alternative schools and adult centers; Chart: Axios Visuals

Large U.S. cities are grappling with too many underpopulated public schools, forcing districts to make difficult decisions on closures.

Why it matters: Losing students can result in funding cuts for classes, extracurriculars or sports.

The big picture: Enrollment at urban public schools dropped more than 5% nationally from the 2019 to 2022 academic years, per the Brookings Institution, amounting to more than 84,000 students.

  • In that same period, the number of urban schools decreased by 0.3%, or 68 schools.

Between the lines: Cities' populations are declining as birth rates decrease and residents leave in search of cheaper living.

  • Parents have also sought more non-public school options for their kids, experts tell Axios.

Threat level: Schools with more students of color and higher poverty levels have been more likely to close, per the National Center for Research on Education Access and Choice.

Read the rest.

4. One fun thing: Bioluminescent surfing

A surfer catches a wave lit up by bioluminescent plankton. Photo: Erik Jepsen/UC San Diego

UC San Diego surfers are catching glowing waves near La Jolla lately thanks to a bloom of bioluminescent plankton that are putting on a nighttime light show.

Driving the news: The UCSD surf team and club went out to Torrey Pines State Beach last week, where the bioluminescence was visible from shore.

Yes, but: The natural phenomenon draws people to San Diego beaches at night, but it can also cause mass mortality among fish and other marine life by creating low or excess oxygen and unstable pH levels.

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Big thanks to What's Next copy editor Amy Stern.

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