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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.
Because banks, lenders, landlords, etc don't look at gig work as 'steady employment'? People don't want to set up their own company, buy their own tools, pay for their own training, healthcare, taxes, etc? Not to mention the job offers are terrible, gigs worth doing are hard to find..
"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.
most individuals can not lead that kind of life!
;)
I have been a self employed contract programmer for 30+ years. It takes a different thought process to in essence run a small business which is what contractors/self employed/gig workers are doing.
I do not have personal/work lives. As an individual who is self employed I have a life.
Most individuals do not have the ability/drive/desire to run a business/be self employed. They do not have that special ability to create opportunities, cope with problems and solve them themselves.
Just my 2 cents
At the grocery store company (in the central USA) where I work, a number of the ~twenty-somethings are doing "gigs", but not for any happy reason.
...And many of them try to push that work off the app when they can; to avoid the app fees and so they can skim on taxes as well...
All of them live on their own--so they need a full-time income--but none of them can find a starting job that is full-time.
And getting one part time job is easy, but most part-time jobs refuse to give fixed hours anymore, so it's nearly impossible to get two part-time jobs at different places.
So they are working one 'normal' part-time job (at the store, for 20-25 hours a week) and doing odd jobs on various phone/web app companies online. The online work is low-skill stuff like yard work, house cleaning, dog walking and so on.
So the truth with most of these people is that they're doing online gig work not because it's better than a part-time job, but because they can't find any full-time job, and because they can't find two part-time jobs that will schedule around each other.
I am not an economist, but I don't know that this is exactly a good sign.
Because the workers needed to make the Gig Economy (TM) haven't embraced it? And why would that be? Maybe it's because:
1. Gig workloads are inconsistent. One day or night you're busy, the next you might be sparsely working
2. Too many people started competing for those gigs, which leads to....
3. The Gig payscale is awful and many people give it up after a while because they realize they'd make more at a boring steady job where they can reliably predict what their next paycheck will look like.
4. Hours are supposed to be flexible on whatever the worker wants to do, but in reality there are boom times and down times. If you're not working those, you're not paying your rent.
As an example of the above, we don't have Uber where I live but when I travel I use it a lot. It's great for the customer. But I also make a point of talking to the drivers about their experience with it as I'm quite curious about what they have to say. More than half the drivers I talk to say the profit for them keeps declining because of increasing operations costs and Uber's income share on the rides keeps shifting. Most of the full-time drivers say if they had known how the numbers would work out they would probably not have ditched their old day job to do Uber full time. Maybe one in 10 I talk to actually seem to enjoy it.
The gig economy is bullshit. It's just another fancy label for "you're going to be at will contractors and we're gonna pay you peanuts"
... is more efficient.
We suffer more in our imagination than in reality. - Seneca
Where I live and frok my perspective, I don't see any desperation or lack of full-time jobs. We probably live in different places, though. Anyway, you mentioned something that reminded me of something interesting.
> low-skill stuff like yard work, house cleaning, dog walking and so on.
Funny thing about that is the going rate for someone to cut your grass or clean your house is about $30/hour here in Dallas. (Roughly equivalent to $50/hour on the coast), yet the vast majority of people lacking marketable skills would rather make $12 / hour at a "regular job".
I've talked to a lot of people because I like to help young people get started and convicts get re-started and the number of people who choose $12/hour working for someone else rather than $30-$40/hour working for themselves is surprising to me.
It seems there are at least two reasons. A somewhat logical reason is that they want consistency. Doing gigs you don't know if you'll make $400 this week or $550. People like consistency so much they prefer to know they'll make $400 working at the mall.
A purely emotional reason is that people are so nervous about having their own business - despite the fact they know many twelve year old kids mow lawns. They might personally know a 12 year old who mows 10 lawns every week for $300, yet they work 30 hours for the same money because their nervous about whether they can do the same thing that kids all over America do.