The New Reality of the Gig
When I was in University 20-some years ago the idea of securing a lifetime job was almost gone. Sure people did it — and people will still do it- but most of us had written the concept off as part of a bygone reality. Like golf or penny-farthing bicycles.
These days a lifetime at the same company seems even less possible. Heck, getting a job that lasts longer than 2 years is fucking amazing.
What they’re calling the gig economy — that sector dominated by the self-employed — is only growing. Various reasons have been sited, and the truth of the matter is that any explanations that don’t put technology front and centre are wrong.
More than 53 million Americans are doing freelance work, according to a new, landmark survey conducted by the independent research firm Edelman Berland and commissioned by Freelancers Union and Elance-oDesk.- source FreelancersUnion.org
There really is no way of escaping the gigification of modern economies. We can’t policy our way out of it unless we want to constrain innovation. The forces of globalization and the destabilization of corporate structures aren’t being driven by policy. They’re being driven by tech.
Gigification and the future economy.
When my son was born a few years back the government of Canada had just put in to place paid child leave for business owners and the self-employed. I was too late to sign up, and relying on savings to get through the 4th trimester was not easy.
Even if the program had existed for years it wasn’t exactly obvious or well promoted, so I don’t know if I would have benefitted because I probably would never have found out about it.
Political leaders consistently talk about how small businesses are the drivers behind the modern economy. But other than cutting taxes there are very few initiatives meant directly to help small business.
And frankly tax cuts don’t help much in the first few years. Most small business fail in the first 12 months, and that’s where they need help.
The growing reality is that more people are going to be starting what are essentially businesses. Not because they want to, but because they have to. The risk is moving from large employers and getting distributed through the system to what used to be employees.
It’s time that governments fully recognize this trend and put programs in place that can help small businesses and the millions of people moving in to the gig economy. From employment insurance to paid family leave to stronger pension plans, people will need new options to help mitigate some of the risk so that they can build solid financial futures. Otherwise we risk huge numbers of marginally employed gig workers and increasing income gaps as more wealth gets concentrated in the hands of a small number of “winners”.
As someone who has run my share of businesses I can tell you that wealth does not come easily, but people who found businesses have less protection than their employees. If someone is laid off they can get government assistance. If my company tanks I declare bankruptcy and hope nobody comes after my house.
Does that approach still make sense when 30% of the working population technically runs a sole proprietorship?
There is no question that there is plenty of upside to gig work. You have more control over your own time, you might make more money than you would with a salary, and you probably aren’t tied to an office. All great things.
And I’m certain that as the freelancer market grows more businesses and organizations like www.freelancersunion.org and www.betterment.com will pop up to take advantage of the opportunity. Everything from healthcare savings accounts to employment insurance supplements can be provided by the market.
But to have impact these services will likely have to be backed by government funds and influence, or at least be regulated to make sure they aren’t laden with false promises. You can decry bureaucratic red tape all you want: the simple fact remains that in a highly specialized economy you can’t expect people to be expert developer/negotiator/marketer/investor/financial advisor/insurance broker/contract lawyers and still succeed. Freelancers need more services that can support them, and they need them soon.