At the Boston Review, Steven Hill examines the dramatic increase in temp and freelance work in the US. In the “Uber economy,” as Hill calls it, many workers work full-time hours but don’t enjoy the benefits of full-time work (e.g., health care, sick days), driving the overall “precarization” of the labor force. Here’s an excerpt:
A 2014 study commissioned by the Freelancers Union found that more than one in three workers—53 million Americans—are now freelancing. Other estimates predict that within 10 years nearly a majority of the 145 million employed Americans—65–70 million workers—will be so-called independent workers. Sharing economy companies like Uber, Airbnb, TaskRabbit, Postmates and Homejoy claim they are liberating workers to become independent—“their own CEOs”—in reality, workers are forced to take ever-smaller jobs (gigs and micro-gigs) and wages while the companies profit handsomely. Indeed, some workers have multiple employers in a single day. Even many full-time, professional jobs and occupations are experiencing this shift toward precarity. Business consultancy MBO Partners has estimated that the number of freelance workers is projected to outpace full-time workers by 2020.
The accelerated use by employers of the independent contractor loophole is causing a rapid erosion of the safety net for workers and families, one that was forged over many decades. Because of their worker classification, more and more American workers are no longer covered by the laws and regulations that underlie the safety net. Under the current system, employers actually have an incentive to fire their entire workforce if they can get away with it, and use all 1099 workers. This sounds extreme, but it actually happens. The pharmaceutical company Merck reportedly sold its factory in Philadelphia and the new owner fired all 400 Merck employees and rehired them as independent contractors—Merck then contracted with the company to continue making the same antibiotics for them.
These perverse incentives are threatening to destroy the U.S. labor force and turn tens of millions of workers into little more than day laborers. The sharing economy’s app- and web-based technologies make it so much easier to hire and fire 1099 workers. BuzzFeed’s Charlie Warzel has rightly observed that "any tech reporter who spends their time covering the sharing economy is now, essentially, a labor reporter.” This is only the beginning; we have yet to see how these trends will affect the labor force over the next several decades, and the economy more broadly.
Image: An Uber user in Beijing. Photo: Julian GONG Min. Via Boston Review.