Is the Gig Up or Down?

New Orleans      With statistical unemployment below 4% for the first time in years, economists, policy makers, politicians, and self-interested hucksters have found something new to throw statistics at each other backwards and forwards:  is the gig economy growing or slowing?  At many levels one might say it depends on who you ask.  At another level one has to worry about why it matters to the drum beaters.

So, just to review the field of battle for a minute.  The respected Economic Policy Institute in Washington weighed in recently that the gig economy was so marginal it was basically only worth a side room in an academic convention amounting to less than 1% of the jobs in the economy.  The federal Bureau of Labor Statistics trying to update its figures put the number higher than that but way less than double figures and cast doubt on whether the level of such employment was rising or falling.  Others argued that the BLS statistics were an undercount citing the almost 70% of Uber drivers who are not counted by BLS because they have payroll jobs, and Uber is their side gig, so to speak.  Gig promoters claim that more than one-third of the USA labor force is involved in some form of contract or freelance work.  No one disputes the fact that contingent, subcontract and temporary labor is huge, but sorting it out is guaranteed a migraine.

Let’s look at why it matters, big or small.

There’s a continuing push by the giggers to get changes in labor law protections, and that’s not good news for anyone but the giggers themselves who are trying to compete with more established employers in the same industries by sweating the labor of their workers.  Not having to pay social security, unemployment, health benefits and the rest of the package and instead pushing the costs over to the workers themselves saves a ton of money, if you are allowed to get away with it.  The whole point of Uber-kind businesses is in fact to get away with it, which is why they continue to fight here and abroad against any finding that they are responsible for their workforce and not simply an internet application.

It also matters when the bean counters determine how big the number is of fulltime gig workers, because these are workers who represent a long-term time bomb on society if they lack sufficient Social Security benefits to support themselves when they outlive their gigs.  A significant change in the composition of the workforce creates a burden that companies want to shed by passing their responsibility over to the rest of us.

Some good news came from an unexpected front in a southern California ruling against the Cheesecake Factory restaurant chain when they were hit along with their janitorial subcontractor for over $4 million on wage theft claims because workers were denied breaks and forced to work unpaid overtime hours before being released from the shift by Cheesecake managers.  Having employing companies held responsible for subcontractor violations could set precedents that protect contingent and temporary workers as well as gig workers.

We need a lot more victories along the Cheesecake lines because whether the number is huge or small we need to force these kinds of business in another direction where protection of workers’ rights and benefits is still part of the business model.

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