On Friday New York announced that it would become the fifth state to mandate paid leave, in a bill that some are calling “the strongest and most comprehensive” bill mandating paid leave. But there are still some who won’t reap the benefits.
Paid leave—be it parental or sick—is on the rise around the country. As is the “gig economy,” which is built on the idea of people as free agents, able to work wherever they are able. But that freedom comes with a price, and as more and more benefits become available to traditional workers, alternative workers may want to start asking the powers that be what kind of protections they can expect.
According to a study released by Princeton and Harvard economists, the scope of the gig economy is staggering. When defining “alternative work” as any sort of temporary gig or contract work, the share of workers in alternate work arrangements climbed from 10.1 percent in 2005 to 15.8 in 2015. Put another way, that’s 23.6 million workers in November last year, compared to just 14.2 million in 2005. Essentially, they claim, all net employment growth in the U.S. economy since 2005 has been in alternative work arrangements.
“Thus, employment in traditional jobs (standard employment arrangements) actually slightly declined by 0.4 million (0.3%) from 126.2 million in February 2005 to 125.8 million in November 2015,” they said in Fusion. “The implied conclusion is that all U.S. net employment growth (for main jobs) has occurred in nonstandard work arrangement over the last decade. As of late 2015, we had not yet quite fully recovered from the huge loss of traditional jobs from the Great Recession.”
That 50 percent jump in a decade has, of course, been aided by technology. Though the fastest growing class of alt-worker is contracted workers,online “gig” work—represented in app form by Lyft, TaskRabbit, and the like—have been growing at a tremendous rate in recent years. Uber alone accounts for ⅔ of online gig work. And given the sharing economy’s relative youthfulness, this is just getting started.
So now that we’ve got a bonafide trend on our hands, what should we make of it? As the economists who authored the study note, it’s a great thing for that elusive work-life balance everyone is searching for. But that flexibility comes at a price.
More so than in many other countries, the U.S. has historically helped workers out by having employers provide assistance for social insurance: paid sick leave, health insurance, parental leave, workers’ compensation, 401(k)s, and equipment care. With more and more workers being placed in this nontraditional work arrangements, we’re also likely seeing more and more workers who are without any sort of safety nets; tackling insurance et. all on their own.
The trade of greater benefits for greater independence could be something that workers are voluntarily opting for. After all, theoretically the gig economy has higher pay and greater elasticity. But as The New York Times notes, the timing of the rise of the gig worker seems out of the hands of the worker—even a bit troubling:
If the period from 2005 to 2015 had been one when workers had a lot of power in the job market, that might even be plausible.It wasn’t. The unemployment rate was above 7 percent for nearly half of the period, from the end of 2008 to late 2013. Employers had the upper hand. That suggests it’s more likely that employers were driving the shift to these alternate arrangements.…“New technologies may allow some things to be shipped out and standardized and easily monitored,” Mr. Katz said. “Call center workers can be at home. Independent truck drivers can be monitored for the efficiency of their routes. Monitoring makes contracting more feasible.”So Uber alone may not be a major force reshaping the nature of work. But the same technologies that made it possible could be making employers more interested in building a work force of nonemployees. A weak job market has probably given them more ability to make it a reality.
Whether this is a one-time shift in the economy or here to stay, economists aren’t sure. What is clear is that Uber’s employment legal battles could carry a lot more weight than we’re giving them credit for. And it may be time to start thinking about where non-workers fit into the protections offered by employers.
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