Finally, an Official Reckoning of the Gig Economy | DCR Workforce Blog

Finally, an Official Reckoning of the Gig Economy

Gig Economy

The President’s 2016 State of the Union address exhorts us all to build an economy that works for everyone by fostering innovation and growth, through a spirit of creativity. Nowhere is this more evident than the job market where we see many new dimensions to work, income and the employer-employee relationship. The traditional work relationship has changed to include contingent workers and others who may be self-employed, holding multiple jobs, working part time, moonlighting to supplement their retirement benefits, working on gigs temporarily or be on call. Their numbers are estimated by the Government Accountability Office (GAO) to be anywhere between 8 million to 47 million, while others put it anywhere from 5% to 33%. These estimates are so far apart that it is difficult to have a realistic estimate of the actual numbers involved and their work conditions.

Now, we have the Labor Secretary Tom Perez announce that the Bureau of Labor Statistics will be working with the Census Bureau to produce a “Contingent Worker Supplement”, in an upcoming Current Population Survey, to be released in May 2017. When similar data was collected by the federal government in 2005, the contingent workforce was comprised mostly of self-employed independent contractors. With the exponential changes in the interim, we must wait to get a glimpse into the real-time status of the strata which constitute the job market today. This move is welcome because it will make it possible to explore ways to extend the safety net and worker protections which currently elude those who are outside the 20th century standards in defining employment. Taking a census of on-demand workers would also help to weed out cases where employees are being misclassified as independent contractors by businesses.

We will now get a count every one of the independent contractors who drive taxis, design clothing and jewelry, cut hair, sharing their homes with paying guests or connecting with consumers using technology and its Internet-enabled applications. We will know how many are selling hand-crafted items, marketing innovative concepts, offering editing/proofing or taking up other entrepreneurial projects. As of now, we do not know how many are depending on the gig economy as a sole source of income and how many are supplementing their income from other sources, while they take up a gig.

Why do we need to know?

Why should we know about the share of the gig economy in the overall job market? Why does it matter to the federal and state governments, what individuals are working at? The reasons are not far to seek. The gig economy is helping workers to monetize existing assets and find consumers through innovative social media and app-based marketing methods. While some of these gigs are being managed by individuals for themselves, others are getting pulled into aggregated group endeavors like Uber, where the workers submit to control from the platform.

At the moment, concerns abound:

  • Who are these workers and how are they participating in the new labor economy?
  • Are these workers being exploited in any way, by being misclassified as independent contractors?
  • Are they paying their taxes right?
  • Do they enjoy the protection from established labor standards and are they economically secure?
  • These workers also need wage and hour protections, workplace safety, fair treatment and workplace rights. Unless more is known about their work arrangements and working conditions, all such protections might bypass them.
  • Do they face issues with inequality in treatment, minimum wage, paid leave and apprenticeships?

There’s a time-honored adage which says we cannot manage what we cannot measure. So, let us hope for better management and improved worker rights through focused regulatory controls, once the share of the gig economy in the workforce gets measured. Would you agree?

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.