The Quiet Death of the Gig Economy
Disruption, blissfully happy digital nomads, the sharing economy and oh yes — the “Gig Economy” sounded good on paper, but it seems to not be all it was thought it might become.
As the U.S. economy finally and painfully slowly recovered from the great recession of 2008, the supposed unemployment rate fell to record low levels in 2018.
According to Guy Berger on LinkedIn, Krueger and Katz published the (at the time) most rigorous analysis of alternative work arrangements. Their conclusion was that such arrangements (of which a minority are online platform gig work) had grown significantly between 2005 and 2015. Their estimate was its share of the US workforce had grown by a whopping 5 percentage points. (7–8 million workers.). Well guess what, that trend now seems to have reversed as the economy recovered.
With Lyft and Uber set to go public with IPOs this year, that to be part-time drivers with them is somehow desirable or helpful to “make ends meet” has all but dried up, right before supposed autonomous vehicles and self-driving cars start to hit the streets in various ways.
Indeed there does not seem to be much sharing and caring in the ruthless world of Uber, amid legal battles and drivers who make less than minimum wage and are like grunt contract workers of the worst kind, totally unprotected.
In a world where Amazon is miserably harsh to its bottom feeder workers, why the heck did we once think the ‘gig economy’ was some glorious alternative workforce? Why the ‘gig’ economy may not be the workforce of the future after all, with rising minimum wages and a small bump in wage growth in 2019. I personally think the American labor force is screwed with a skill-shortage coming the likes of which we’ve rarely seen, but that’s another story for another day.
From Uber to TaskRabbit to YourMechanic, so-called gig work — task-oriented work offered by online apps — has been promoted as providing the flexibility and independence that traditional jobs don’t offer. But in 2019, if anything they seem like scams for the destitute, desperate and debt-ridden. I feel a bit nervous about how manipulative an Uber driver can be just to earn an extra buck. Maybe it’s not a Gig economy but kind of like another form of slavery given a pretty name.
Horror stories of what it’s really like to do delivery work also give you a second guess that this Gig Economy isn’t just disruptive to make these companies rich, it’s a sham and harmful to these workers. I feel as if Silicon Valley has duped us, yet again.
Nobody could have thought or imagined that doing a small gig in exchange for an hourly payment could become someone’s full-time job. It’s a bit like career-death, you get used to the work-lifestyle perks of the so called flexibility until you realize just how little you made the year you side-hustled in the Gig Economy, or became a freelancer or attempted to be self-employed. It’s risky folks, and I don’t recommend it for a minute.
When you need to bring food to the table you are on the fringe of the labor force, the painful predicament of being a Gig Economy minion is your everyday, until it becomes your new normal. Until you lose hope to up-skill or change your career path. Labor is tiresome, but when the fat cats get rich on the backs of people who need the money, you know American capitalism has invented another scam to profit. That’s precisely why the Gig Economy has to die.
Crypto and the Gig Economy seem hot in a recession, but the reality is that lovely expansion of alternative work seems a nice response to the weak US labor market, when job seekers didn’t have many options. But now with the labor market in a much healthier state for a few more months, more conventional jobs have rebounded. The implication may be that we’ll see these kinds of jobs proliferate again during the next downturn. Bitcoin and side-hustles, it doesn’t feel very sustainable.
The “gig” economy was supposed to be an opportunity for entrepreneurs to be their own boss. But if you have to deal with companies like Uber, you might end up getting screwed royally. For the hundreds of people who use services like Uber, TaskRabbit or Turo to earn their livelihood, there’s no thing as benefits, paid leave or basic worker rights. That’s not an ethical solution for people living on the edge.
Companies like TaskRabbit make a fortune by extracting commission in exchange for connecting consumers across the country with reliable people in their neighborhood who will happily take care of their burdensome chores. But is it even ethical? The app-economy is a feudal use of technology and downright as evil as any capitalistic scheme you might want to devise to imprison people in impossible situations.
The Gig Economy was a myth and a scam, and Silicon Valley needs to be held more accountable with regulation. Alan Krueger of Princeton University and Larry Katz of Harvard should actually be apologizing, not revising their estimates. As of 2020, universal basic income sounds more reliable than an exploitative Gig Economy.
The gig economy was supposed to be the future of work, but it ended up hurting more than it helped, and we left it. Just as we should kill Uber.