Is the gig economy working?



hey it's Lou and here's the thing the 21st century is becoming the age of the freelancer conventional careers generally associated with the long-term commitment to a single employer are less prevalent than they used to be meanwhile there's been the rise of the irregular economy aka the gig economy the independent workforce free agents who bounced from one short-term opportunity to the next one study estimates that half of the u.s. work force will be freelancers by 2027 in the EU the number of freelancers grew by 99 percent between 2000 and 2014 the question is when you balance money with lifestyle are these workers better off than those in traditional careers and is the gig economy a choice or a trap a lot of people being an employee sucks you're subservient to a boss often engage in repetitive tasks and if you're middle-class or below your purchasing power has been stagnant for decades Diane Mulcahy a lecturer at Babson College told me traditional work doesn't work for everyone on the other hand if you're an employer well actually that kind of sucks to staff is often inflexible slow to learn new skills or break old routines they come with overhead expenses and expectations about holiday bonuses so there's dissatisfaction on both sides luckily an alternative work arrangement has never been easier a flood of digital platforms seamlessly connect ready and able hustlers with consumers looking for a surface things like getting a ride or getting your hedges tripped but keep in mind the gig economy isn't just about errands and low skilled laborers business consultants accountants and other highly educated professionals often do contract work then there's the creative class of writers designers and artists overall this ecosystem which skews young is particularly attractive to employers in the digital economy because the talent pool is global a developer and New Delhi can design a website for a start-up in New York everyone has the ability to be a virtual migrant my buddy a video editor is planning to move to the Dominican Republic and do all his work remotely his slogan is earn dollars spend pesos from the typical nine to five grind independent workers like him can set their own hours their lives aren't dictated by the whims of the scheduling manager as they would be at a place like a fast-food restaurant they can carve out time to chase dreams prioritize children or ease their way into retirement freelancing in this way is about gaining control now this flexibility comes at a price but it's not necessarily money professor Paul Boyer an economist at Stanford University who drove an uber while studying the gig economy estimates that workers in the gig economy make six percent less a year but they make about 15% more per hour this indicates that they're more productive makes sense when you're on staff somewhere you're often sitting around doing nothing watching the clock but when you're self-employed you see a more direct relationship between effort and income the problem is managing the ups and downs of that income people in a traditional job yet a steady paycheck but the income of independent workers is not guaranteed of the long run it will likely level out but there might be short-term shortfalls a 2017 study found that 63% of freelancers had to dip into their savings at least once a month versus 20% of full-time employees this instability can have psychological effects doctor guy standing professorial research associate at so asked University of London told me freelancers often feel like they're not working enough there's this persistent nagging guilt that they should be logging another uber shift or completing another chore via TaskRabbit a lot of people actually crave the structure of a workday it's how they organize their lives but it's not like staff jobs are guaranteed Iran sooner Rajan a professor of Business at NYU told me because of the waning power of labor unions and collective bargaining full-time workers don't have a ton of leverage anymore at least here in the u.s. most people can be fired at a moment's notice with little or no severance consider this Oreo told me that in the wake of the recession independent workers saw income reductions of about 10 to 20 percent that's no good but compare that with all the people who got laid off from staff gets their salary went from 100% to zero percent over the course of a single shitty meeting with HR there is of course a glaring disadvantage to freelance work especially in the u.s. that's the absence of vital benefits like health insurance and paid family leave without the protection of these safety nets freelancers are vulnerable to sky-high premiums or hospital bills that could wreck their finances in addition there's the big gripe I had when I was a freelancer no paid time off this can lead to burnout it also ruined every vacation I ever took I kept thinking about the money I was losing by not working full-time employers are also the way most people access retirement plans like 401 K s no wonder then that fewer than one-third of people who derived most of their income from freelancing are setting aside money for retirement full-time employees saved at a much higher rate however mo ke told me there's no organic reason that benefits like health care and easy access to retirement plans are tied to full-time work she called that system a historical artifact that's propped up by government subsidies at least here in the US we may take that arrangement for granted but it's complete construct it's nowhere in the natural order of things so Niraj and told me the challenge is to create a 21st century method of delivering benefits that doesn't filter everything through a full-time employer that's why doctor standing is a big advocate of universal basic income or why other support government-funded health care for all some people feel the gigging platforms should chip in to provide worker benefits and pay for worker protections like unemployment insurance because the thing is even with the shortcomings of the gig economy and don't get me started on companies that fail to pay freelancers in a timely manner most people in the independent work force are happy to be there according to a 2016 McKinsey report quote most independent workers have actively chosen their working style and report high levels of satisfaction with it and obviously the system is working for employers to the innovation economy in particular likes nimble companies that can tap into elastic workforces Apple for instance directly employs fewer than 10% of the 1 million people who design make and sell their phones and computers critics however often say the gig economy is a race to the bottom sure the upper echelon of the independent workforce have the luxury of choosing this flexible lifestyle they can jack up their rate to cover insurance they can fall back on savings or align the income of a spouse when times get tough but low-skilled working stiff without those support systems are being pushed out of full-time jobs and towards short-term work that doesn't help with career advancement that same McKinsey report categorizes 30% of the independent workforce as either reluctant or financially strapped the majority of them would rather have full-time jobs and because of transparent price gun platforms like up work and because so many people are entering the freelance workforce workers have to keep lowering their rates to find opportunities many folks cobble together a variety of short-term jobs and still fail to make ends meet too many this inequality is intolerable and unfair but order told me it's the result of much larger trends outside of the gig economy things like automation and globalization are what's hurting the working-class in fact he argues that you can feel the gig economy as a sort of safety net in its own right away to earn extra income and fight back against the forces that are squeezing the little guy so in the future perhaps a happy medium can be found a labor market that allows individuals to explore their potential through a series of different jobs without forgoing access to something as vital as health insurance and if companies are saving money by employing fewer full-time workers maybe their taxes should be increased to fund a more accessible safety net perhaps we the consumers like to pay a tad more on uber or door – so that our service providers have a measure of security because this new labor model is here to stay it's growing and we should make sure gig workers don't feel like disposable workers okay I'm gonna go with my life you




Comments
  1. BTW – Sometimes we make mistakes. Looks like we accidentally screwed up with the map of India at 1:58. Sorry about that. Thanks to commenters who noted it. Here's the map of India – https://www.cia.gov/library/publications/the-world-factbook/geos/in.html

  2. haha anything that "skews young" is trash and you know it. There's a reason why it "skews young." When people get a clue they realize it's stupid.

  3. Gig economy is cause by rich elites, top 1% vs 99% poor majority. Greedy selfish rich bosses & CEOs only seeks to abuse workers like disposable slaves to do all the dirty & hard work for them,while they take most of the credit and money from the company! The rich bosses robs the poor workers: they do not care if the workers burn out or die earlier from overwork & Karoshi, as long as they steal huge $$$ from workers and economy! Plus cutting worker benfits, unpaid overtime and weekend work: (no matters how many extra hours & effort the workers have put in, the bosses are gonna deny promotions and bonuses to the workers). Plus replacement by robotic tech /AI, or offhosringto cheaper wages countries with less labor laws (eg India, Southeast asia, Africa, East Europe …etc). Workers who do not obey these mad dicatators corp bosses's crazy hard work schedule and outrageous demands will just gets fired and replaced. Theft by greedy managers and CEOs frequently using budget cuts as excuses. These rich demonic bosses must be stopped! Why do you think the labor unions was justifiably organized in the first place in the industrialized eras in Europe & Americas?!

  4. I mean its good if you need to make extra cash but i dont think its good that its growing because you have to make time and your paycheck isnt guaranteed and also you dont have any benefits like PTO or health insurance, its slightly better than being a traditional entrepreneur/employer, i think stable jobs with benefits need to be growing instead

  5. The gig economy is a financial pit for employees but it at least helps them to try out a variety of professions in the world of work, and makes certain jobs available in the market. But finacially it's bad: no insurance, no vacation pay, no security, no bonuses.

  6. do not forget worker's comp, don't get hurt on your gig job and try to use your health insurance….you are committing insurance fraud, a felony in most of america

  7. Yep, this is my life. But I am highly skilled so I actually have a business that's starting to grow. Hopefully they won't just be gigs anymore.

  8. Parental leave, medical benefits, and paid time off are becoming more and more rare for normal full time workers. As the benefits become equally shitty, more people are going to choose the option that gives them more control, and that's freelancing.

  9. Gig economy – the result of Neoliberal polices, government and bank cartels screwing everyone over, automation, consumerism, severe debt and outsourcing which all together causes people who are desperate to make money just to survive to do anything they can as they race to the bottom – while money, control and power go to the top. Don't believe the hype or the spin of the reality of the "Gig" economy – we are all getting screwed

  10. Great video! I make videos documenting my journey running a gig economy based company. Feel free to stop by!

  11. UBER'S CREED –> The gig economy has brought us back to the 1890's. When employees had no rights, no representation, no benefits…all labor laws & policy wiped out and undone. THAT'S what the gig economy has executed.

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