Slashdot Mirror
Why Hasn't The Gig Economy Killed Traditional Work? (npr.org)
An anonymous reader quotes NPR:
In recent months, a slew of studies has debunked predictions that we're witnessing the dawn of a new "gig economy." The U.S. Bureau of Labor Statistics (BLS) found that there was actually a decline in the categories of jobs associated with the gig economy between 2005 and 2017. Larry Katz and the late Alan Krueger then revised their influential study that had originally found gig work was exploding. Instead, they found it had only grown modestly. Other economists ended up finding the same -- and now writers are declaring the gig economy is "a big nothingburger."
Arun Sundararajan, a professor at the NYU Stern School of Business and the author of The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism, remains a true believer in the gig revolution.... When asked about the onslaught of data contradicting his thesis, Sundararajan said the Bureau of Labor Statistics continues "to underestimate the size of the gig economy and in particular of the platform-based gig economy." The best BLS estimate of the number of gig workers employed through digital platforms -- whether full-time, part-time or occasionally -- is one percent of the total U.S. workforce, or about 1.6 million workers, as of mid-2017. Sundararajan argues that the survey questions the BLS used to gather this data were clunky and don't quite capture what's going on.... He believes work done through gig platforms can be more efficient than work done in a traditional company -- and that will spell the company's doom...
The dawn of a new gig economy has seemed plausible because the Internet has been dramatically reducing transaction costs. Search engines have made it incredibly cheap to find goods and services, compare prices, and get bargains. Social media and peer reviews have made it easier to determine if people are trustworthy. E-commerce has made it easier process payments. You can click a button on a mobile phone and instantaneously have GPS guide drivers right to you. But as big as these efficiency gains have been, a new economy based on crowds of people doing gigs through digital platforms -- as exciting or scary as that might sound -- still doesn't compare to one based on the efficiencies and stability of the good old-fashioned company.
Arun Sundararajan, a professor at the NYU Stern School of Business and the author of The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism, remains a true believer in the gig revolution.... When asked about the onslaught of data contradicting his thesis, Sundararajan said the Bureau of Labor Statistics continues "to underestimate the size of the gig economy and in particular of the platform-based gig economy." The best BLS estimate of the number of gig workers employed through digital platforms -- whether full-time, part-time or occasionally -- is one percent of the total U.S. workforce, or about 1.6 million workers, as of mid-2017. Sundararajan argues that the survey questions the BLS used to gather this data were clunky and don't quite capture what's going on.... He believes work done through gig platforms can be more efficient than work done in a traditional company -- and that will spell the company's doom...
The dawn of a new gig economy has seemed plausible because the Internet has been dramatically reducing transaction costs. Search engines have made it incredibly cheap to find goods and services, compare prices, and get bargains. Social media and peer reviews have made it easier to determine if people are trustworthy. E-commerce has made it easier process payments. You can click a button on a mobile phone and instantaneously have GPS guide drivers right to you. But as big as these efficiency gains have been, a new economy based on crowds of people doing gigs through digital platforms -- as exciting or scary as that might sound -- still doesn't compare to one based on the efficiencies and stability of the good old-fashioned company.
All this has done is displace those who would have worked at McDonalds.
Unless there is a massive race to the bottom then really workers have just moved slightly from one business to another. Given there are no reasonable gains to had at this tier of income I'm not sure what he was hoping for.
Anything remotely successful in this area is still going to resemble a typical corporation. Ahem, Uber, where we have gone from crufty shitty taxi service to a better taxi service.
That is probably the only positive because the traditional Taxi sucked ass. It was so unreliable and expensive at one point that I had a personal driver(s). It was actually a group that would share a phone and they always said call at any time.
"Gig economy" is for the desperate. Desperate workers who will take a shitty job, and desperate employers who need [task] done with minimal overhead and no commitment on their part. There is some overlap between "desperate" and "loser", but they are not always going to be the same.
Employment based around desperation isn't good thing in the long term, for either party. I think what we saw was a spike in desperation at the same time these services became technically and socially feasible. How big it is will vary year to year with the bubbles and fickleness inherent in the free market. Hypeman economists like Sundararajan will have their heads going in circles trying to make sense of it.
I think it's helpful in understanding to avoid buzzwords like "gig economy" altogether. These kind of buzzwords are loaded up with an entire narrative that makes it mentally easy for you to forget context and history, being swept up in the hype. The facts become harder to actually integrate into your worldview. Keep history and context in mind, and it's clear the "gig economy" is more evolution than revolution. You're fixed on this image of a bedraggled hipster, that is the detritus of Sundararajan's investment hype. The reality is more... real. Normal people wanting the same things they always have.
"Arun Sundararajan, a professor at the NYU Stern School of Business... remains a true believer in the gig revolution...."
I bet Arun has tenure at NYU.
I wonder if his position at NYU became like that of an uber driver (an independent contractor), he'd still be "true believer in the gig revolution"??
I spent 20+ years as a self employed software engineer. I finally had enough of never truly being free of my work and got regular employment. I have never looked back. I make about a third of the money but the freedom! It is worth every penny lost to be able to really have time off. To take a six week vacation! Call in sick when you have the flu instead of working.
Life as an employee is good!
...in 2008 we were in a drastic economic condition that allowed regulators to look away from business subcontracting employees to shed their responsibility in paying their fair share of taxes and benefits.
As our condition improved, regulators started to take a hard look at how employers were classifying their employees and a large amount of these employers saw the writing on the wall and hired their "contractors". The ones that didn't are currently taking their lumps with the AGs of many states.
So, companies got off not paying their fair share of comp, FICA, retirement, UI, and benefit packages for 4 or 5 years. You know, just like the banks. As usual, those "contactors" took it in the rectum and were held responsible to cover the full cost of taxes and insurance.
09 F9 11 02 9D 74 E3 5B - D8 41 56 C5 63 56 88 C0 45 5F E1 04 22 CA 29 C4 93 3F 95 05 2B 79 2A B2
Be careful not to confuse the hourly rate you're paying as a customer with the hourly rate the worker is receiving. Even if they are self employed, working lawns carries several additional costs. e.g. Capital equipment (truck, trailer, mower, edger, etc.) and the maintenance on all those items, their time managing that maintenance, their time scheduling the work (and dealing with schedule changes), etc.
8 hours of pay is costing probably 12 hours of their time, which effectively brings their hourly rate from $30 down to $20. Now subtract expenses. I don't know exactly how much that would be but even if you estimate only $5/hr that brings them down to $15/hr which is only $31k/yr assuming they can work all year, which is not true for lawn care in most states.
Also, if you're doing everything above board, the guy doing gig work has to pay self employment taxes. As a W2 the employer would be responsible for half of your federal taxes; but as a gig worker you have to pay both halves. That 30/hr starts looking more like 10/hr very quickly once you factor all the typical expenses and taxes.
In a bit of shameless internet panhandling, I accept Litecoin Donations at Lbd2oH9QsthD1GfuUXPyka12YxvWJYnBVf