The Gig Economy
What if the future is bleaker than we thought?
Have vs. Have Not.
That’s the usual framework for discussions about the digital divide: people who have access to technology and those who don’t. In this scenario, we picture homes without computers or internet access. Children doing homework with pen and paper instead of a laptop and a word processor. Homework done without the aid of the Internet for research. These days, digital have-nots might as well include people without smart phones or tablets.
Today, however, I’m going to posit a different digital divide that, in my most paranoid, hopeless, moments, makes me fear for the future.
But First, Argument By Anecdote
In my early days as a data person, I created a database-driven web application that allowed customers to answer a few questions about a certain task and end up with all the documents required to complete their task for the rules and requirements at their location. Nifty! Great for my company! But that application meant the company no longer needed to warehouse printed documents. They no longer needed the people who worked in the warehouse or the employees who maintained the manual method of creating and vetting physical batches of documents.
That’s a now familiar disintermediation. Old jobs disappear and other ones take their place, and there is, the thinking goes, a net stasis in jobs one might have. In the 1950s no one was a web developer, after all. In the 1950s, you had to go to your local stores to buy soap, clothes, or appliances and the like. Today, we can shop online, avoid the terrible traffic and parking tickets, and get the exact product we want instead of the one in the store that we don’t really want, but that’s all they have.
The digital economy has the potential to create a new and very large underclass of underemployed people. It’s already happening. I’m not talking about Buggy Whip jobs (TM by JSON!) that have all but vanished as a viable career. I’m talking about a transformation of the workplace where full time employees are replaced with “You’re Your Own Boss” jobs that rarely pay a living wage. Uber puts up billboards promising drivers $5000 a month income. A possibly chimeric income, it seems:
I thought great, this would be a great job for me. But then after working like two weeks and I saw what I actually got paid, it was less than minimum wage. Here
Here’s what the US Department of Labor says:
Unfortunately, current tax, labor and employment law gives employers and employees incentives to create contingent relationships not for the sake of flexibility or efficiency but in order to evade their legal obligations.
Gigs Not Jobs
Let’s talk about gig and how that is a service disintermediation. In the publishing word, book covers are a case in point. A cover produced by a traditional publisher (in some circumstances) might cost upwards of $5000. Publishers have art departments with employees, but they also hire independent contractors. Some of the same people doing covers for indie publishers are also doing covers for traditional publishers.
The going rate for self-published covers is less than $300, and that’s covers that involve some actual talent to pull together. A “pre-made” cover might cost $35.00.
At $300 per cover, a book cover designer is going to have to sell a lot of covers to pay the bills. If that person lives in a high cost of living area, a living wage income might be as much as $5000 per month, before taxes, assuming little to no debt. Such a person would have to have work consisting of at least 17 book covers a month. That’s about a cover every weekday of every month.
Companies like Fiverr, Top Coder, and 99 Designs provide inexpensive services for people looking for help with a task or work. A host of people compete for what amounts to work at below the cost of a hiring a professional. If you are a person or company looking for help because you have no need of an employee dedicated to such a task, services like these must are a godsend. Decent work at below-professional level cost. It might even be a win/win in some cases.
The more you win, the more opportunities you’ll get. (99Designs)
What if you don’t win?
This is a clearing house, a way for designers to make money on gigs. The designers are not employees and other than the TOS here , 99Designs has no duty to the designers. I do not dispute, by the way, that a service like this is a convenient way for people looking for designers to find someone to do the work. It’s a way, obviously, for designers to find clients and get their work out there.
But are designers finding work through services like this going to make enough to live on? What about social benefits? How much work does a designer have to get in order to pay the bills and put food on the table?
If you’re someone looking to supplement your income, then gigs like these could indeed bring in much needed or just extra cash. Making enough money to pay the bills and keep a roof over your head is far more difficult.
ObamaCare exposed some nasty corporate mind-sets (no surprise to employees, but the dirty secret of those who say the market will protect everyone). One of the first things that began to happen in the wake of ObamaCare was employers reducing employee hours in order push the cost of health care onto the employee.
Jobs that used to provide solid income no longer do. They’re gone (The US Steel industry) or out sourced (call centers). Blue collar jobs are either vanishing or the protections established in the wake of pre-labor union work environments are being dismantled. As if some how the abuses that led to workers uniting never happened and could never happen again. White collar jobs are in the cross-hairs, too. (Top Coder, off-shoring, tele-medicine).
In my years in tech, I’ve watched lots of people get laid off and then brought back 6 weeks later as contractors. No benefits. No guaranteed income.
What I worry about is the notion that companies should operate without regulation because when ethics are left to the market, the market will self-correct to some degree of fairness. After all, exploding cars that kill customers are bad for business. Employee turn over is expensive, so surely a “rational” company will create employment environments designed to retain employees, right?
In this era of service disintermediation, I worry we’re creating a jobs environment in which people don’t have one job, they have many jobs. That in itself wouldn’t be a bad thing, but in the US we are not providing such workers any of the safety-net that is lost without full-time employment. What little safety-net there is under attack.
In the US we model our idea of a “worker” on an able-bodied white male. This able-bodied white male is assumed to (eventually) have a spouse at home doing most of the work of maintaining a home and raising a family. In reality, workers who are not able-bodied white males incur burdens that impact how often they’re hired, how much they’re paid when they are hired, how long they are in the workforce, and how competent they are perceived to be.
It’s not uncommon, in discussions about poverty and entitlements, to read about workers with multiple part time, low paying jobs. This is a reality a certain segment of society seems happy to pretend does not exist. The need for multiple jobs is increasing and creeping up the pay scale, as it were.
The Gig Economy
In the gig economy, it’s possible to hire someone without knowing gender, race, or disability status. It’s possible for workers to cobble together enough income via gigs to supplement a day job that either doesn’t pay well or that isn’t full time. The Gig Economy can help an entrepreneur get her business off the ground and running. That entrepreneur can get by with obtaining help on-demand in a market place created by technology. Instead of risking the business with the cost of an employee, new businesses can hire just the help they need, when they need it.
Sounds great, right?
There’s a downside. I worry about a world in which companies have far fewer employees and many, many more gig workers. As long as social needs such as insurance, time off, vacation, maternity and family leave, and more, are tied to full-time employment, the gig economy creates a whole class of persons who are under-employed, underpaid, and over-stressed.
If this is an emerging reality, we should be creating ways to offer benefits to those workers, too. Otherwise, all I can think is the future looks pretty damn bleak for a lot of people.
What do you think?