The Gigged Economy

Archive: Trump’s Workforce Development Week!

I’ve been wondering about how it is that we are reportedly near full employment and yet no one seems to be making more money, no one is getting raises. It doesn’t make sense to me that employers are not increasing salaries hoping to retain employees. Everything about the economics of right now seems off script to me.

Further down the dictionary’s definition of gig is this one: a harpoon-like device used for catching fish or frogs. So I was thinking about the verb To Gig as I read the economy deep-dive email thingie from Axios, which is in many separate parts and altogether tells a story.


“More Americans are working than ever before, but a growing number of them aren’t 9-to-5 employees, nor skilled freelancers who negotiate their compensation, Dan and Kia write.

Instead they are your Uber driver, your DoorDash food deliverer or your Rover dog-walker.”


The remarkable unemployment numbers coming from our Vichy gubmint might be hiding that a large part could be to these gig employees:


U.S. employers currently have just two options for classifying their workers: employees and independent contractors. But neither really suits the on-demand economy, Kia writes.

  • Employees are considered to be under the control of their employer, which can dictate when and how they perform their work. It’s antithetical to the flexible design of on-demand economy jobs, while the corresponding liabilities are antithetical to on-demand economy business models.
  • Independent contractors provide goods and services while retaining control over schedule and compensation. But on-demand economy workers clearly don’t have real control over what they’re paid, as evidenced by recent ride-hail driver strikes in Los Angeles after rates were suddenly slashed.

Axios continues:


Why it matters: On-demand jobs have become a central cog in our economic growth engine, providing both entry-level jobs and supplemental incomes. They are to 2019 what fast-food work was to 1989.


Those jobs became full-time work for many people, and a minimum wage was designed to be liveable for a family of three. Republican have told us, those McJobs were never intended to be careers, but instead were for high schoolers. Republicans said that to justify not increasing the minimum wage.

So these gig workers jobs, the Uber drivers and dog walkers are not expected to be careers and yet…


  • Uber alone reports 3.9 million global drivers, around one-third of whom are in the U.S.
  • For context, the U.S. added 2.6 million jobs in all of 2018.
  • There isn’t broad agreement on how many people are in the on-demand economy, particularly because labor reports often conflate such jobs with more traditional “gig” work like contract graphic design or independent trucking.

So could we conclude that half of all the new jobs in 2018 are Uber drivers? Not exactly, but as a metric it is startling. Axios compares and contrasts:


Here’s how Uber and McDonald’s match up:

Workers

  • Uber: 3.92 million
  • McDonald’s: 210,000 (not including franchises)

Average Salary

    • Uber: $15 per hour
    • McDonald’s: $9 per hour ($11 for shift managers)

Revenue

  • Uber: $11.3 billion
  • McDonald’s: $21 billion

Now, while $15/h is a good wage, and certainly better than $9/hr, but there are no shifts. A Mickey-D’s cook knows his/her wage and how many hours they’ll get per week. An Uber driver has no guarantees of getting fares, and thus has no guarantees of getting paid, and of course carries the cost of operating the car, not Uber.

Axios continues:


America’s employment data is being skewed by the gig economy, according to a recent paper from the Dallas Federal Reserve.

  • There’s been an increase in the number of people working as contractors who mistakenly report themselves as employed.
  • This includes those who should at best be considered underemployed, like the ride-hail driver who only has passengers in the backseat for 30 of his 40 hours in the car.

The bottom line: Government economists haven’t kept up with the changing nature of work, which can play havoc with employment statistics. It also could help explain why America’s low unemployment rate hasn’t been married to significant inflation or faster wage growth.


And of course, Axios has an anecdotal story, not that that’s a bad journalism, to connect the gig economy and the experience of a gig worker:


What they’re saying: For Mark Ferguson, delivering food orders for DoorDash was a means to an end shortly after getting separated and needing extra cash —but he tells Axios it’s “not a career” and “there’s no ladder to climb.”

“On one hand, I do kind of enjoy the change of pace from the typical email and spreadsheets and the 3pm marketing meeting… [But] if you think this is a full-time job and you can make it — you’re fooling yourself. These platforms are here to make money and they will find out the absolute bottom before workers don’t show up.”

The bottom line: “Even though it’s marketed as the height of advancement and app-driven modernity,” writes Ravenelle, “for many, gig work is what happens when there are no other options.”


Here’s the take-away: instead of building a better ladder to greater opportunity, we have added a rung to the bottom of the ladder.

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14 Responses to The Gigged Economy

  1. Redhand says:

    Here’s the take-away: instead of building a better ladder to greater opportunity, we have added a rung to the bottom of the ladder.

    A concise summary. And of course, the GOP loves it. The bottom rung people simply don’t enter into their calculus, except as fodder for statistical gaslighting about how “great” the economy is.

    Liked by 3 people

  2. purplehead says:

    As Redhand noted, that is such a perfect way to put it, TG. Just right on the mark. We’re all marks.

    Liked by 1 person

  3. tengrain says:

    I have a couple of younger friends here in Seattle, smart degreed women, both of whom say they feel underemployed, and so they have gone job hunting (while maintaining their current jobs) and are finding no nibbles; it just didn’t make sense that we could be so near total employment, and yet even in a thriving economic hub, these seekers couldn’t find better jobs. Anecdotal, I know, but wait! there’s more!

    Another friend was driving on the side, she was determined that her new car should pay for itself as a matter of principle. After a few months of that, she gave up on it. She said on her best weeks, she broke even, but as soon as she had the first car repair, she realized she would never recover all of her costs as she thought she might.

    I’ve known newly minted lawyers who have driven on the side to try to pay off the college loans for that degree. Something is so fundamentally wrong right now, nothing about the economic numbers makes sense, and I keep thinking someone somewhere is picking the pockets of the Yutes of Today.

    Anyway, that’s sort of the background for why that Axios email thingie really resonated for me.

    Rgds,

    TG

    Liked by 3 people

  4. laura says:

    I have a group of workers at a small water district in northern cali. Full time employment with negotiated wages, medical, pension, and must respond to a call for service in less than 30 minutes -requiring they live in the service area. Half work second jobs because they cannot afford housing. The board is actively considering demanding a wage cut when we negotiate a new Agreement next year because workers have it too good.

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  5. Astamari says:

    “Gig” has multiple meanings. The OED gives two separate, unrelated sets of definitions for the word:
    gig (n.1)
    “light, two-wheeled carriage, usually drawn by one horse” (1791), also “small boat,” 1790, perhaps imitative of bouncing. There was a Middle English ghyg “spinning top” (in whyrlegyg, mid-15c.), also “giddy girl” (early 13c., also giglet), from Old Norse geiga “turn sideways,” or Danish gig “spinning top.” Similar to words in continental Germanic for “fiddle” (such as German Geige); the connecting sense might be “rapid or whirling motion.”

    gig (n.2)

    “job,” originally in the argot of jazz musicians, attested from 1915 but said to have been in use c. 1905; of uncertain origin. As a verb, by 1939. Among the earlier meanings of gig was “combination of numbers in betting games” (1847). Related: Gigged; gigging.

    The first gig is pronounced with a soft “g”; the second with a hard “g”.

    My talented 20-year old college daughter has had jobs simultaneously as a dog walker and as an advanced marine biology researcher (paid internship). This is long since becoming the norm in this country.

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  6. MDavis says:

    This explains some things. I had thought that the dropping of people from the “unemployed” list when they gave up looking (or no longer reported because unemployment insurance had run out) was the answer. Now there is the “gig-economy”, like Reagan’s service economy but on anorexia. What else feeds the falsity of the “the economy is great” myth?

    Liked by 1 person

    • tengrain says:

      MDavis, I think it is “all of the above.”

      Rgds,

      TG

      Liked by 2 people

      • MDavis says:

        Well, yes, of course, but I’m pretty sure there are other contributors. Such as part time employment (cover your own health insurance, part-timer!) and on line employment, which is also an independent contractor situation, with competition from Bangladesh and Ulan Bator.

        Liked by 2 people

  7. That $15/hour sounds better than $9, but it’s not a salary, nor a wage. It’s a payment to an ‘independent contractor’. This is an important distinction allowing Uber (and the rest of the Parasite Vulture Capitalists running the gig economy) to get away with with their “privatized profits, socialized losses” business model.

    The person driving for Uber is a contractor; that $15 net needs to cover all taxes,( including the portion of the payroll taxes that the company pays for salaried or wage workers), insurance on the vehicle (and, by the way, if you don’t tell your insurance company the vehicle is being used for commercial purposes, you will find yourself in a deep hole should there be an accident and a paying customer gets hurt!) all maintenece and the usual associated overhead that comes with running your own business

    If there’s any left over for rent and food, that’s great!

    This is the oligarchs end game, keeping everyone so busy trying to make ends meet while they’re trumpeting how Great things are…

    There was the quote early during Chimpy’s reign where he was gloating about how many jerbs he’d created; allegedlty one person in the crowd said “Yea, I should know! I’m working three of them!”.

    Liked by 2 people

  8. Rocky D says:

    Yes! You said it…Vichy government! My version was Vichy republicans but that’s okay. Thank you.

    Like

  9. Heim says:

    $15 an hour for UBER? Nah. I “worked” UBER in a Pennsylvania college town so as not to be bored and it was more like $8 an hour after expenses. Enjoyed doing it but it didn’t pay anything. UBER algorithm also noted that I didn’t turn down long distance which did not pay return trip.

    Liked by 1 person

  10. Scottie says:

    Reblogged this on Scotties Toy Box and commented:

    Grand post TG, thanks for the info. To the Toy Box viewers this is a grand post on the job situation in the US. The information given in the post is something we all need to understand before the next election. We need to turn this around to help make the country better for everyone and make the benefits of society available to everyone. Hugs

    Like

  11. Scottie says:

    Thanks for the information TG. I know a 78 year old lady on oxygen working as a cashier at a local supermarket to make ends meet. Housing has gotten so expensive James had to get two roommates to afford a two bedroom apartment, and he works a country job and long hours with extra shifts. The pay scale and earnings of the working people have simply not kept pace with the cost of goods, services, and housing. I do not know how families with children do it today. The land of opportunity is no more if it ever was. Hugs

    Liked by 1 person

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