AI A Blessing and a Curse for Freelancers

For many in the freelance and side hustle economy, artificial intelligence isn't a distant concept—it's a daily reality filled with contradictions. The same technology that promises to streamline workflows and boost productivity is also flooding the market with competition, creating a complex new landscape for independent workers.

Take Abbianca Nassar, a freelance ghostwriter and brand strategist. Her work life has become a balancing act. Some clients want her to use custom-built ChatGPT tools to speed things up. Others are so wary of AI's robotic touch that they ask her to remove common writing elements, like the em dash, simply because large language models favor it. "My biggest fear is not adapting and then being left behind," Nassar admits, capturing the sentiment of many freelancers who feel they have no choice but to engage with AI.

This sentiment is widespread. Freelancers and small businesses can't afford to ignore AI, but they also can't make massive, risky investments in it. The consensus is clear: AI lowers the barrier to entry, but in doing so, it also drives down wages and makes it incredibly difficult to stand out from the crowd.

The Double-Edged Sword of AI

The freelance economy is a significant part of the American workforce, with Bankrate estimating that one in four Americans has a side hustle. For newcomers like Cody Luongo, a media consultant, AI has been a "constant companion," helping him draft press releases and refine pitches to compete with more seasoned professionals. "AI accelerates my work enough that I can do exponentially more for my clients with their allotted budgets," he explains.

While this is a win for clients and can help a freelancer's bottom line, it has a chilling effect on the market. Increased competition from both AI-assisted freelancers and AI tools themselves means clients can often find a cheaper, "good enough" solution. Research from Washington University confirms this trend. Following the release of ChatGPT, jobs for writing freelancers on Upwork fell by 2%, with earnings dropping 5.2%. The impact was even more severe for image-based freelancers after DALL-E and Midjourney emerged, with jobs falling 3.7% and income by a staggering 9.4%.

"The drop in earnings, if anything, is actually larger for high-quality freelancers in comparison with low-quality freelancers," notes Xiang Hui, one of the researchers. "High quality doesn't really protect freelancers."

The Rise of the 'Good Enough' Economy

AI's ability to lower the entry barrier means the market is now flooded with cheaper alternatives. Nick Loper, who runs the website Side Hustle Nation, points to the emergence of AI headshot companies charging $29 for a service that a professional photographer might charge $300 for. The quality might be questionable, but for many, the price is right.

This creates a confusing marketplace. I spoke with an Etsy witch who feels she is "drowning" in a sea of AI-generated competitors with stereotypical images and similar names, preying on people seeking genuine guidance. On the other hand, a PR professional has used AI to expand her services into event hosting, using it for everything from drafting invites to producing video recaps, allowing her to charge more for a comprehensive, AI-enhanced package.

A Tool for Productivity or a Crutch for Creativity

Many professionals view AI as a powerful productivity booster. Using it for mundane tasks like writing product descriptions, invoicing, or summarizing meetings frees up valuable time for more creative and strategic work. However, there's a growing concern that over-reliance on AI can stifle genuine innovation and skill development.

When people believe work is produced by AI, they tend to devalue it, regardless of the quality. Shane Schweitzer, a professor at Northwestern University, explains, "People just think they deserve less credit." Many see it not as a productivity tool but as a sign of laziness. This perception is rooted in the fact that AI-generated content, which relies on existing data, can often feel homogenized.

"AI can raise the baseline of creativity, but fewer people are having breakthroughs. You need breakthroughs for innovation," Schweitzer says.

Furthermore, creative work improves through iteration and practice. Relying on AI to generate initial drafts can prevent freelancers from developing the core skills necessary to excel in their field.

The Client Perspective: Cutting Costs and Shifting Demand

From the client's side, the math is simple: AI saves money. Businesses are increasingly using AI to replace junior-level freelancers or interns. Guillermo Fernandes, a blockchain entrepreneur, noted his startup replaced three out of four coding interns with AI tools. Carey Bentley, CEO of a productivity coaching company, is candid about her approach: "Every contractor I'm hiring, I'm looking at what I'm paying them, and I'm thinking about how I'm going to get at least a 3X ROI on this person's time."

This has shifted the nature of freelance work. Jinjin Qian of the freelance marketplace Fiverr says demand for simple, low-end jobs has plummeted. Clients now often use AI to create a first draft of a blog post, video, or app and then hire an expert freelancer to refine it and get it across the finish line.

Navigating the New Normal

AI has undeniably opened doors for side hustlers, making it easier to manage administrative tasks and get projects off the ground. However, it is not a magic bullet. The consensus among researchers and creatives is that while AI can lift everything to a passable, 6/10 quality, it simultaneously lowers the ceiling, making truly exceptional 9/10 or 10/10 work much rarer. For the modern freelancer, the challenge is no longer just about getting the job done, but about proving that a human touch still delivers indispensable value in a world leaning toward "good enough."