Now the changing employment landscape is giving rise to a new type of worker.
Opinion/Commentary, San Diego Union-Tribune, September 5, 2015
Labor Day represents the end of summer for many, but the original intent of the holiday was to honor and celebrate the American worker, with labor and trade unions often figuring prominently in celebrations. Now, however, the changing employment landscape is giving rise to a new type of worker. In a recent speech, Hillary Clinton questioned the “gig economy” which creates opportunities and unleashes innovation while also raising concerns about workplace protections. Here, a San Diego State business ethics lecturer and attorney writes about the changes in the work force, and two local millennials explain their employment preferences.
Adapting to shifting workplace
By Dan Eaton
Is the same spirit of independence that we celebrate on the anniversary of the birth of our nation transforming the meaning of our annual celebration of the work we do? Have we become an “Uber nation” in which an increasing number of workers are self-employed, whether by performing “gig” work in such sharing economy platforms as ride-sharing company Uber or by providing our services to a range of employers by registering with temporary staffing firms?
The evidence is not as clear as the outsized attention the “gig economy” has received in the business press. In July, for example, The Wall Street Journal reported that there is no solid proof of a gig economy revolution. Citing U.S. Labor Department statistics, the Journal reported that “the share of Americans who are self-employed and unincorporated has slowly declined over the past decade, to about 6.6 percent of workers today, down from as high as 7.7 percent in 2005 and as high as 8.5 percent in the mid-1990s.”
The conclusions in that report have not gone unchallenged, with much of the controversy arising from what to include in the definition of the gig economy. Larry Katz of Harvard and Alan Krueger of Princeton have pointed to the little-noted rise in those filing tax forms indicating income received from self-employment to suggest that this segment of the workforce is being undercounted.
Regardless of what the true numbers are, “What is not in dispute,” wrote Stanford Business Professor Jeffrey Pfeffer, in a Fortune.com essay decrying the rise of the gig economy, “is that the proportion of contractors, freelancers and part-time, contingent workers in the U.S. has been increasing and has been for a long time.”
That rise is largely because employers have gotten wary of adding permanent staff only to have to lay people off during down economic times, which can be expensive and is always disruptive to employee morale. Using contingent workers in whatever form gives companies the ability quickly to increase and to reduce staff in response to shifting economic conditions. Flexibility, then, is the common motivation for many individuals who take such temporary jobs and for most companies that provide those jobs.
Is that cause for celebration or cause for alarm? Millennials may answer that question differently from baby boomers. USA Today recently reported that the “growth in gig economy workers may reflect a shifting workplace ideal for many university students looking for employment post-graduation.” Numerous studies have found that millennials change even “permanent” jobs far more frequently than previous generations did.
Yet one worker’s prized scheduling flexibility is another worker’s despised income instability. For every anecdote of a worker expressing appreciation for having hundreds of “bosses” instead of just one, one can find a contrasting anecdote of a worker expressing resentment from getting too little in the way of pay and protection.
The legal regulation of work is struggling to adapt to this new kind of work. Just last month, a sharply divided National Labor Relations Board made it easier for non-union workers sent by temporary staffing agencies to unionized workplaces to obtain the rights of their unionized co-workers. Pending federal lawsuits against Uber and competing rise-sharing service Lyft will decide in coming months whether drivers are employees rather than independent contractors.
The answer to that question matters because employees have certain rights and protections that independent contractors don’t. It also matters because it is not clear that the leading sharing economy platforms could function, or at least function nearly as profitably, if they were required to give their registered service providers all of the rights and protections that are given to employees, such as overtime pay and workers’ compensation.
Technology has affected commerce in profound ways; it was inevitable that technology would affect labor in profound ways, too. The app that amazon.com makes available to its customers to buy merchandise at any time of day or night is a close technological cousin to the app Uber uses to alert available drivers at any time of day or night that someone needs a ride.
The current categories and concepts in the law of the workplace may need to undergo an expansion, if not a revolution. The tools that courts have to address the emerging challenges were developed in a different age, with different assumptions about the nature of American work and seem inadequate. Legislators at all levels may have to respond.
But any legal response – whether legislative, judicial, or regulatory – will have to be undertaken with the same care and ingenuity that gave rise to these new forms of the age-old marketplace through which labor is exchanged for money. Regardless of the changes that are in the air, the essential value in celebrating that marketplace will endure on its own terms. So Happy Labor Day, indeed.
Eaton, an instructor at the SDSU College of Business Administration, is a partner with the San Diego law firm of Seltzer Caplan McMahon Vitek, where his practice focuses on defending and advising employers. Twitter: @DanEatonlaw
Freedom, flexibility appeals to millennials
By Claudia Huizar & Jamie Reyes
Growing up, we were taught by our parents that success strictly pertained to pursuing an education and full-time job that would provide stability and income. They missed the part where freedom was no longer attainable, and our incomes were to be a little too stable. The average pay raise in the United States is 3 percent, and for entrepreneur-minded people like ourselves, that just wasn’t enough. According to the Ewing Marion Kauffman Foundation, millennials launched about 160,000 startups each month in 2011 and 29 percent of all entrepreneurs were 20 to 34 years old.
The gig economy is providing millennials opportunities to find business in trending industries. Social media, for example, was introduced as a passing trend in the early 2000s, when we were working at various public relations agencies. Today, it is a staple that has helped shape and define a generation, and opened doors for employment opportunities. Like social media, our generation is taking these passing trends and making an economy that is profitable out of what once was referred to as a “fad.”
Being your own boss allows you to buy a priceless commodity that many take advantage of: freedom. Rather than sitting at a desk from 9 to 5, embracing entrepreneurship changes the landscape of a typical workday. The hours are as flexible as you want them to be. Vacation time is determined by no one other than yourself. Though plenty of entrepreneurs we know do it for the money, we see more value in the freedom entrepreneurship brings.
With much freedom comes exponential responsibility. Entrepreneurship is a lifestyle that can’t be left at the door after clocking out. It’s a way of life that is never-ending; an infinite responsibility on top of your personal daily challenges that dictates your livelihood. Entrepreneurship is learning to be comfortable among constant uncertainty.
Although work never leaves your side wherever you go, entrepreneurship makes possibilities endless, and that includes income. We get to determine how much work we want to take on and how much is manageable. Unlike most 9-to-5 jobs, your salary does not have to reach a cap. Within the first year of starting Luxuria Public Relations, our incomes doubled and we’re growing year after year. On the flip side, endless possibilities also mean lack of security. You have to learn to accept that you do not earn a base salary, and there is never a guarantee you’ll make the same amount every month.
However, the ability to choose projects that cater to your needs and personality provides self-fulfillment that beats potential revenue and extra vacation time. Getting up in the morning and looking forward to coming to work is something many may not experience, and it’s something we value over the superficial benefits of being business owners and entrepreneurs.
Millennials who embrace entrepreneurship must discover how to tackle life administration, which includes planning for health benefits, retirement, self-employment taxes and general savings. It is inspiring to hear and experience the benefits of entrepreneurship, but the risk of being faced with illness or a quick sudden downfall in income is all too real. Peers who have selected to work in traditional corporations have a safety net composed of established benefits, support and shared responsibility with co-workers and a chain of command; something we don’t have.
Although the gig economy was once reserved for elusive artists, today it serves as a platform that holds the potential to mold an uncommon industry into a thriving niche. While creating opportunities, the gig economy raises issues about stability, workplace protection and benefits, and long-term planning for millennials. For our generation, the gig economy can be a steppingstone and resource to entrepreneurship that a 9-to-5 job simply cannot offer. Even if you don’t become the next Mark Zuckerberg, you’ll learn more in two years than you would sitting in an office cubicle for 20 years.
Huizar and Reyes are co-founders of Luxuria Public Relations.