What could happen if freelancers hop on the corporate “greedflation” gravy train?
As inflation skyrockets, some corporations are inflating prices beyond their costs—a practice now dubbed “Greedflation.” But should freelancers start adopting “greedflation” tactics, demanding higher rates as a hedge against rising living expenses?
Lina Khan, The Chair of the US Federal Trade Commission, emphasised in a 60 Minutes interview that while corporations may hike prices under inflationary pressures, there’s concern about profiteering. She noted that “prices aren’t just going up because of inflation but due to pricing power.”
She said in the interview that some CEOs have boasted publicly that “inflation is good for their bottom line.” This has raised the question of ethical business practices. Should freelancers exploit their “pricing power” like big businesses, or should they resist following corporate greed?
Higher rates or value package deals?
Freelancers have long been underpaid compared to their corporate counterparts, despite the flexibility and expertise they offer. Inflation reduces purchasing power, making it difficult for many freelancers to sustain a stable income. While corporations adjust their prices to maintain profit margins, freelancers, too, can argue for rate increases. After all, they face the same inflationary pressures—housing, healthcare, and everyday costs are all rising.
Moreover, freelancers, unlike big corporations, don’t benefit from economies of scale. The costs of running a one-person business—from software subscriptions to professional tools—are increasing too. As Khan highlighted, corporate profits remain high even when companies raise prices. Why should freelancers settle for lower margins when the market might bear more? They don’t have to. Sometimes it is just a matter of spelling out the value your clients will get when they use your products or services. Make a package deal that shows what they will get versus just an hourly rate.
Think of it this way, you and your business are not a parking meter that is only measured in minutes and hours: you are a human who offers bespoke services unique to your experience and knowledge.
The ethical dilemma
However, the ethics of raising freelance rates aren’t black-and-white. Khan’s point about companies using “pricing power” to exploit inflation can serve as a cautionary tale. If freelancers price themselves out of reach, they risk losing clients, particularly smaller businesses and startups already struggling in a tight economy.
Furthermore, if every freelancer ups their rates, it could contribute to broader inflationary cycles, passing costs down to other businesses and consumers. The question becomes: Is it fair for freelancers to echo the “Greedflation” tactics of corporations?
A strategic approach
Instead of blanket rate hikes, freelancers could adopt a more nuanced approach, adjusting prices based on specific factors such as the complexity of a project or the financial standing of a client. This would allow them to stay competitive while still managing the cost-of-living increases.
Freelancers also have a unique advantage: personal relationships with clients. While big corporations might alienate customers with price hikes, freelancers can explain the reasoning behind a rate increase in a more empathetic, transparent way.
As inflation continues to grip the global economy, freelancers find themselves at a crossroads. While corporate “Greedflation” strategies may seem tempting, freelancers must tread carefully. Balancing fair pricing with ethical responsibility, and leveraging personal relationships, might provide the optimal strategy in uncertain times.
Lina Khan’s insights suggest that while pricing power can be a potent tool, wielding it irresponsibly risks long-term harm. The question for freelancers is: how can they protect their income without crossing the line into exploitation?
