There’s been much discussion about the gig economy, about
whether it is the wave of the future, and whether new kinds of gig jobs are
good for human beings.
The simplest definition of a gig
worker is someone who is self-employed and/or an independent contractor. That
means someone who is not legally considered the employee of an employer. Modern
examples are Uber and Lyft drivers. Some authors focus mainly on gig jobs mediated
by on-line platforms. But others include all kinds of independent contractors
and self-employed workers. Some claim that a third of all jobholders are gig
workers.
It is not uncommon for bloggers to
write as though there were no gig workers until the 2010s. They may ignore retro-giggers:
house cleaners who work for themselves, lawn mowers, people who regularly sell at
local flea markets, people who walk dogs and house-sit for a fee, house
painters who have no or few employees. And jazz musicians who don’t have a
steady job. (They gave us the gig-term, didn’t they?) If gig workers are those
who are not considered employees of those for whom they provide products and
services, there have always been gig workers, and much about the gig phenomenon
is not new.
But are there more gig workers than
ever? Counting gig workers, old and new, is something that the Bureau of Labor Statistics
and the Census Bureau do. Together they are responsible for tons of employment
data, and, most importantly, the monthly unemployment rate. But they have
rarely surveyed people in “alternative work arrangements”--which includes
independent contractors--and contingent jobs. The survey is called the Contingent
Worker Supplement (CWS). But when neo-gigs came into view in the 2010s, there
had not been a new CWS since 2005.
Princeton Economist Alan Kreuger and
Harvard Economist Lawrence Katz aimed to fill the vacuum with a survey carried
out by the Rand Corporation in the fall of 2015. It was called “The Rise and
Nature of Alternative Work Arrangements in the United States, 1995-2015,” and it
is available from the National Bureau of Economic Research. Like CWS, it
focused on people’s main or sole jobs. Perhaps the most striking conclusions
were these:
1. People
in alternative work arrangements, which included independent contractors and
people hired by temp agencies and labor contractors, increased their share of the
work force between 2010 and the fall of 2015 from 10.7% to 15.8%. That is substantial.
2. Of all
net new jobs, 94% were gig jobs. Seems like a revolution. But was it?
3. Almost
a fifth (19.4%) of all job holders reported that they sold goods and services
directly to customers. A minority used old-time intermediaries like Avon.
Relatively few used innovative tools. For 2015, the share of the work force that
found their main or sole jobs through on-line intermediaries was 0.5%. Not much
of a revolution. K and K showed that many
gig workers were not working for Uber, Taskrabbit, or similar companies. Many
were in sales, health and educational services, construction, and other apparently
retro jobs.
Two years after K and K’s pioneering
study, the Bureau of Labor Statistics was able to fund a new Contingent Worker Supplement.
The results were obtained in May of 2017 and published on June 7, 2018. They
showed that there was little change in the share of workers with alternative
work arrangements. The category of
independent contractors, including independent consultants and freelance
workers, totaled 10.6 million people. But that represented a smaller share of
the labor force at 6.9% than in 2005 (7.4%). So no revolution?
Careful scholars and journalists
found reasons for skepticism.
-Neil
Irwin, in “Maybe We’re Not All Going to Be Gig Workers” (New York Times, September 15, 2019), provided a concise survey of
research that suggested that the neo-gig economy was a niche arrangement in a
few sectors and mostly provided a side hustle for people whose regular jobs did
not pay enough.
-Irwin mentioned
the research of Dmitri Koustas, who
found that many people’s earnings from their regular jobs fell off just before
they started as gig workers.
-The Federal
Reserve Report on the Economic Well-Being
of U.S. Households in 2018 showed that 3 in 10 adults engaged in a gig
activity in the month before the survey, but the number who were doing things
like driving for Uber and Lyft was smaller than the number who sold stuff at
flea markets and about the same number as those who walked dogs for pay. The enterprise
that involved the single largest share of adults--10%--was online selling. Digital,
yes, but not earth-shattering. And did online selling yield much income?
-Researchers
at the JPMorgan Chase Institute studied 39 million Chase checking accounts and
found that 2.3 million accounts received at least one payment from online
platforms between October of 2012 and March of 2018. Millions, yes, but not so many
over five years. In March of 2018, the state and the city with the highest
share of participators were Nevada and San Francisco, but in each case just
2.8% of the families were generating platform earnings.
-On May
15, 2018, Lawrence Mishel of the Economic Policy Institute provided a clever
way to measure the employment impact of Uber and similar companies. While
833,000 people drove for Uber in a year, most did not work a full week or
year-round. The total hours worked by all Uber drivers was the equivalent of
90,521 full-time, full-year workers.
Some of these reports and articles
and also the 2017 BLS Contingent Worker Supplement raised questions about Kreuger
and Katz’s 2016 study, in particular that the gig economy was surging. In a 2019
report, K and K walked back some arguments. They admitted that there were many new irregular jobs in the 2010s not
because of deep structural changes, but because the Great Recession and very
high unemployment made workers desperate for cash. Some became “independent contractors,”
but that could have meant, as was reported at the time, that they were offering
to clean out your garage, mow your lawn, or assemble your Ikea furniture for
$10 an hour. Much of the increase in the number of independent contractors was
a cyclical event rather than a permanent shift. (K and K, I believe, devoted just
one paragraph in their 2015 study to the cyclical explanation.)
But K and K were not giving up. They
pointed out that the CWS--like their 2015 study--only studied people’s main or
sole job. Perhaps the gig revolution was hidden in people’s second and third
jobs. They had a point. As we’ve seen, most people who drive for Uber in a
single year are not full-time, year-round workers. For many the job provides
supplemental income to help pay off debt, pad retirement funds, or surmount an
income shock in their regular jobs. However, federal statistics on multiple job
holders showed no significant increases. End of story? Nope. K and K claimed
that the Census Bureau and the Bureau of Labor Statistics were missing many multiple
job holders. Perhaps so. But who many?
What we can say about the gig
revolution is that the neo-part has often been exaggerated. We can admit that flexibility
of hours and easy entry into gig jobs can be useful. For example, you are a
single parent and cannot work a standard schedule; or you’ve retired and need a
little more money. But the big picture is that Uber, Lyft, Instacart, and
GrubHub are adding a lot of bad jobs in America. Pay rates are subject to
capricious changes by the de facto employer; the companies usually offer no
benefits and pay nothing into unemployment, Social Security, and Medicare funds.
These companies are parasites living off the fact that many other jobs don’t provide
flexible hours and adequate pay and benefits. But they don’t provide the latter
either.
In some states, notably California,
workers and liberal politicians have had enough, and they have begun to redefine
Uber drivers and other freelancers as employees of the concerns that they work
for. On-demand drivers are angry, as Bryce Covert shows in the March-April, 2020
issue The American Prospect. It is also
noteworthy that the March, 2020 coronavirus stimulus bill, known as CARES, allows
gig workers to apply for unemployment benefits, although neither they nor the
companies they worked for have contributed to state unemployment funds. Does
that imply that gig workers and their de facto employers need to contribute?
Yes. The Uber model of the no-benefits employer has failed miserably. But more
about these issues in Part II.
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Frank Stricker is a board member of the National Jobs for
All Network and emeritus history and labor studies professor at California
State University, Dominguez Hills. The views in this article are not
necessarily those of his organizations.