Trapped in the Gig Economy

By James Yeun

If you haven’t worked in the “gig economy”, chances are you have at least taken part. But chances are rising that you have been, or will be, working for the gig economy.

The “gig economy” is a growing section of our economy. According to a 2016 report by economists Alan Kruger (Princeton University) and Lawrence Katz (Harvard University), the percentage of workers engaged in “alternative work arrangements” is approximately 16%, a rise from 10% in 2005. According to the authors, this means that all new job growth between 2005 and 2015 is due to the growth in alternative work arrangements; in other words, over ten years, no growth has appeared among traditional full-time jobs.

Despite this, such jobs represent a minority in the labor market. If we focus on the online gig economy, we are looking technically at an even smaller portion. According to the Pew Research Center, about one-in-twelve Americans (8%) have earned money in the last year using digital platforms to take on a job or task. However, even small percentages can have large impacts; Uber alone has more than 200,000 active drivers.

Still, while the gig economy continues to grow, many people are unsure what the gig economy is, or who even works in it. What is emerging from the research is that there exists a class of workers that is isolated from the traditional labor market and is dependent on the gig economy to meet its basic needs. According to the Pew Research Center, about 56% of people say that their gig income is either essential or important for meeting basic needs. One-third of them have full-time employment; people with full-time jobs who cannot make ends meet are turning to the gig economy. It should not be surprising that this same group is disproportionately made of people of color and the working-class. What may be more surprising to some is that this group is also disproportionately recent college graduates. Those who have traditionally been at the margins of the labor market and those just entering the labor market struggle to find either full-time employment or full-time employment with a decent wage; as a result, they are turning to the gig economy.

Given the importance of gig income, many workers expend a great amount of labor at their gigs. In a recent paper, economists at UCLA and Yale found that nearly one-third of active Uber drivers worked 20+ hours a week and nearly one-fifth of active drivers worked full-time. Additionally, using the study, we can estimate that active Uber drivers working full-time or more account for about 40% of the labor done within a given week. The gig economy is not composed entirely of people working odd hours, here-and-there; a substantial segment work full-time and contribute a large portion of the labor within the gig economy.

What we need to understand is that the gig economy is an essential or important source of income for a core group of traditionally economically vulnerable people. Few of us would consider “gigs” as anything more than dead-end jobs—something to do in your free time or between jobs, but not something to propel you into the middle-class, not something to begin your career with. Gigs let people survive, but do little to alleviate someone’s poverty. But, for a large, and growing, portion of the economy, the gig is all people can do.

To that end, Uber drivers have been organizing, but the point of this article is not to suggest methods of organization; rather, it is to motivate solidarity between those who are exploited by the gig economy and those who are not. It is clear that some people are better with the gig economy than without it. Among those who worked in the gig economy, 42% did it to simply supplement their incomes. For the 92% of Americans that do not work in the gig economy, many of them likely benefit from the goods and services provided by the gig economy. However, in exchange for giving some access to more spending money and cheaper and more modern services, the gig economy has chopped up one good full-time job into a few part-time ones; it has justified employing people at full-time hours for part-time pay and no benefits. It has trapped substantial portions of people—who have historically been in precarious positions in the labor market—in the gig economy rather than placing them as its beneficiaries.

The gig economy does not run on free time; it runs on real, hard labor. It is not motivated by entrepreneurial spirit, but by the fear that there is no other way to meet basic needs. We must choose between an economy where a few benefit by the aggressive exploitation of the poor and marginalized, or an economy where everyone is entitled to a full-time job with full-time pay. It is socialism or barbarism. It is exploitation or decency. To choose socialism is to believe that a decent and just society can be wrenched from the barbarity of daily exploitation.