Uber and Lyft, in response to a California court ruling that all drivers must be reclassified as employees with benefits, are threatening to quit doing business in the state. Putting the news, and the legal posturing of Uber and Lyft aside, the judgment and its possible impact on other gig-economy companies that rely on independent contractors will be a quagmire. But it raises more profound questions that go far beyond these startups, and our society.
How should we be thinking about work?
Why do we continue to classify work as either full-time employment or independent contractor? Why isn’t there a grey zone in between these two qualifications? Why do we assume that work should be tied to specific tasks and the amount of time spent doing that task?
More importantly, what is work? And where is work coming from in 2020 and beyond?
A lot of politicians and their sycophants talk about creating jobs but never talk about the specifics about how will those jobs emerge? What kind of jobs will we create? What is the real economics of creating those jobs? Who is going to create those jobs?
We don’t get answers -– but instead, we end up with political slogans.
The United States isn’t very good at large scale manufacturing that people talk about – it is clear that the ship has sailed for cheaper shores. There are construction jobs, and those are plentiful in times when things are great, but not so great when chips are down. (You can check out the most recent job statistics at the US Bureau of Labor website.)
America is a majority service economy. And if anything, the pandemic has exposed the fragile nature of this service economy. Restaurants, airlines, travel and hospitality, and retail are shrinking faster than an empty plastic bag under a stream of water. Depending on whose numbers your trust, many millions of jobs are going to be permanently lost. Even bigger companies aren’t immune to this affliction.
How are people who are going to have no jobs, going to be rethinking their future and finding work?
And that brings me back to gig-economy.
If the economy contracts and jobs vanish, more people will be forced to take these gig-economy jobs. And if that is the only option to find work in a feeble economy, then shouldn’t there be an effort to find the gray zone between permanent employee status and the independent contractors. Admittedly, there aren’t easy answers. Even the BLS is grappling with this ongoing shift in economic activity.
The gig economy in BLS lingo is labeled electronically mediated employment. “Electronically mediated employment is defined as short jobs or tasks that workers find through websites or mobile apps that both connect them with customers and arrange payment for the tasks,” BLS adds.
They also point out that this could be the primary job, second job, or side-hustle. It could involve using your equipment, such as cars and computers. No matter which way you look at it, the idea of an electronic mediated employment, aka “marketplace” is not going away. And for better or for worse, it is going to become more pervasive. The question is how to deal with this shift.
If you want to discuss these topics, do get in touch. I am looking to expand my knowledge around the future of work – and how should we think about work.
August 13, 2020. San Francisco