Is the On-Demand Economy Taking Over?

Is the On-Demand Economy Taking Over?

Only about 10 percent of Americans work in the gig economy, but the disruptive impact of the sector should not be underestimated.


The latest data on the “gig economy” is, like everything about the gig economy, a Rorschach test for the future of work. Depending on how you look at them, short-term, casual, and contract jobs are growing and shrinking, both disrupting everything, and changing less than you think.

The “contingent worker survey”—an analysis of Census and federal labor statistics on employment that is informal, self-employed, or otherwise “nonstandard”—suggests that, since the data was last issued in 2005, precarious gig work has not drastically altered the labor force, as many feared. The number of jobs that are unstable, or not firmly attached to an employer, has plateaued at about 10 percent. Separately, the category of “contingent workers,” who hold irregular or temporary jobs generally lasting less than a year, hovers around 6 million workers, or 4 percent of the workforce.

So apparently the so-called “age of disruption” isn’t changing everything? It certainly feels like gigdom is ever-present—with our ubiquitous shopping and communications apps, our streets swamped by Ubers.

Beyond employment statistics, however, the new labor landscape must be viewed multidimensionally: The relatively small portion of the workforce categorized as “gig” doesn’t amount to a revolution (or an epidemic, for that matter), but a symptom. In absolute numbers, the nonstandard workforce has gained hundreds of thousands of workers over the past 12 years—rising from 14.8 million to 15.5 million nationwide—but this has been offset by the expansion of other regular jobs in tandem. But, by definition, unstable and casual work often isn’t captured in official employment statistics, since it’s typically used as a “side hustle,” perhaps supplementing other work. Separate surveys reveal that one in three workers are engaging in gig-type work on top of regular jobs. That means that there is a real pattern of work becoming more marginal and unstable, because of a deeper wave of precarity bleeding through the workforce.

Nearly six in 10 contingent workers are in service industries, such as hotels and restaurants, or in retail jobs—typically in stores or online sales—or in the care sectors of education and health, ranging from home-care aides to preschool staff. A common thread is that the nature of this work has a destabilizing impact on the workers’ lives—low wages, unpredictable hours, and fewer, if any, protections or benefits. We’re not all gig workers, but more of us are working bad jobs, while the regulations around work in general steadily unravel.

According to Maya Pinto of National Employment Law Project, the casualization of work in the gig economy represents a widening crisis of inequality and eroding workplace rights. “We are expecting that this kind of work is going to grow in industries with higher-than-average injury and fatality rates, the more dangerous industries, like construction and transportation, and also in lower-wage industries,” Pinto says. “The implications for overall erosion of labor standards are pretty striking.”

Far from the gig-economy dreams of self-starting “portfolio careers” and Silicon Valley tech consultants, one-sixth of contingent workers are in manufacturing and construction; about a third of all temps are in manufacturing. So the stereotypical standard jobs of the past, blue-collar sectors once considered stable pathways to the middle class, are becoming more precarious. Big-box chain stores are also powered by workers whose hours fluctuate between zero and overtime every week under automated scheduling systems.

That the gig version of standard jobs is more exploitative and less secure isn’t a glitch but a feature. The business model profits from the gap between regulated and deregulated work by scrimping on labor costs and outsourcing hardship to workers, leading to erratic hours and cutbacks on needed protections like paid leave and workers’ compensation.

Today, although the majority of standard workers have health care, only about 13 percent of temps and 30 percent of on-call workers do. Contingent workers face an estimated 25 percent “wage penalty” compared to full-time, traditionally employed peers—with earnings coming in at $685 versus $886 per week. Blacks and Latinos are also heavily overrepresented in temp labor.

“What that indicates is that the growth of nonstandard work is the driver of labor-standards erosion and rising income- and wealth-inequality…, structural racism and occupational segregation,” Pinto says.

Speculative visions of a brave new digital world may also be overstated: an estimated 4 percent of the workforce is employed through an online platform. However, the explosion of digital commerce shows that while the sector may employ few, it’s reshaping how we live and consume—and maybe that’s a problem as technology and globalization separate our jobs and lifestyles from our local community economies.

We’re not all going to be replaced with robots anytime soon—but the on-demand economy will intensify capitalism’s age-old crisis, as work becomes more precarious and less able to meet our everyday needs. We won’t all become gig workers, but all of our economic lives are becoming more volatile, as workers and consumers. Maybe your mother’s homecare provider can’t be relied on for long-term care because her contract runs for only a few months. Maybe you can’t rely on your temp job for consistent paychecks you need to afford your mother’s care costs through next year. Amid these overlapping uncertainties, what kind of support can anyone rely on?

Workers might or might not desire “flexible work,” but every worker needs stability. Readjusting welfare systems to fit the new workplace reality will involve expanding universal labor protections and benefits, regardless of employer. Counterbalancing the overhyped promises of prosperity through “flexible” work, some cities and states are promoting citywide living-wage reforms and collective-bargaining agreements for contractors. Some platform service firms are now offering long-term, full-time employment and benefits—innovating to actually support, rather than exploit, workers

“Anyone who’s working full-time,” Pinto says, “should be able to earn livable wages and have health insurance and be able to save for retirement.… Regardless of work arrangement, workers need to have access to quality jobs.”

The future of work is uncertain, but it’s clear we need to upgrade how we organize our workplaces, and extend the safety net to close deepening gaps in labor rights and protections.

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