The Promise and Peril of a Gig Economy

December 10, 2018

MARC PORTER, Ph.D.

Talent & Organizational Development Consultant

The word “gig” was first applied to performances in the 1930s by musicians. It was originally a kind of carriage and the hiring of one for short trips. To a musician, a gig meant a temporary job offering a quick pay check sufficient to cover another day’s food and rent. A “long-term gig” is an oxymoron in the same way “permanent employee” is. More commonly, a “regular gig” may be less fleeting, but it is not any more secure.

 The “gig economy” is touted as a new and improved version over inflexible, staid organizational work. But the favors of the gig fall mainly to the management class. Hiring someone for a specific short-term fix and avoiding the long-term liabilities associated with a full-time employee is a boon for the tight-wad, risk-adverse manager. The limited engagement makes hiring and terminating the worker less stressful for the employer largely because managers assume there’s less legal risk. The worker is a commodity hire brought in to solve a problem and leave. According to one recent content-marketing study, only 11% of freelancers say they are gigging because they can’t find full-time work, while an overwhelming 89% are happy freelancers. But like air travel, there is no glamour in gig work.

 

Most of us run our households in a similar fashion because there is little need for employing full-time a plumber, an electrician, a roofer, or a landscaper. Our first gigs were more likely short jobs, like babysitting, cleaning, painting, or toting, and we got paid in cash. Part-time work is different than a “gig” in that the former commands more regular attendance, the pay is significantly less than a gig on a per hour bases, and the length of the part-time job seems more predictable. For example, most adjunct faculty are not gig workers; they are part-timers, with all the rights and privileges expected of low pay and often maligned hourly jobs common to retail stores or restaurants.

While I’d prefer to be cast as a builder or architect, my OD gigs are akin to being hired as an electrician asked to figure out why the lights don’t work causing productivity to fall and why the wall clock stopped. I give them new light bulbs, help screw them in, leave a few extra bulbs, and then grab my client’s arm, read their smart watch, and tell them what time it is. Satisfaction and productivity increase seven-fold, and it’s a “good gig.”

 

Learn Something New. Do Something Great.

MARC PORTER

Producing a film brings people together for a limited time, under a legal corporation around a single endeavor. Big movie makers raise hundreds of millions to make a film. Numerous specialists, including actors, camera workers, editors, and writers (“talent” as they have been called long before HR and T&D types adopted the word to strike another metaphor to describe the human commodity at work), may belong to a guild for reasons of standardizing pay and leveling power between those hiring and those seeking work. While it may take two years to make a box office movie, most work only a few weeks or months. This organizational model seems comparable to how traditional companies are currently using gig workers.

Newer network-organized companies are finding their own improvisational approach to work shaped by regulatory expectations, employment law being only one them. Ride-sharing gig workers have triggered regulatory review in every major city where taxi companies reigned.

Just as industrial models shaped how we teach our children, most corporate training today strives for industrial efficiencies intended to inculcate individuals with precise methods of doing. While failure to provide training may be an organization’s fault (e.g., safety training, anti-harassment training, or corporate computer security protocol), failure to learn is considered the individual’s fault. Gig workers are expected to show up trained and certified, and to carry in their own tools and equipment required to do the job. Acquiring people and real estate in which to place them is also a matter of financial efficiency. Though shedding employees quickly is not the public relations or legal hurdle people believe it to be, gig workers make bulking up and trimming down easier.

Gig work favors a service economy. Don’t pack the house with all manner of competencies, but rather hire and fire as you go. San Francisco’s skyline epitomizes the service economy. The TransAmerican building is a pyramid-like temple to an insurance company, and the suppository-like SalesForce Tower is a tribute to making nothing in particular, but grinding all matter of data in order to sell more of everything faster.

What the discussion of the gig economy is sorely missing is a closer look at the social-psychological factors, including issues related to inclusion and diversity. Standing on management’s side of the wall makes hiring temporaries a godsend for financial rationalizations. But for temp workers, it is not the freedom-granting blessing if they are seeking more predictable employment. Steady income (even the illusion of it) gives psychological security sufficient to find a regular place to live, maybe even a place in which to buy a home and stay awhile longer. It adds a degree of predictability, even though it may be a poor bet in a chaotic world.
“Short-term gigs don’t work for many college graduates who put 15-year liens on their financial future when they were teenagers.”

MARC PORTER

Most people do not thrive on chaos. We are an adaptive animal, but we are also talkative, which gives us the power to talk ourselves into problems that would not otherwise exist. We also have bills to pay. Student loans suck a percentage of cash from many millennials’ paychecks, and should the paychecks stop coming, loan collectors will not stop. Having steady, predictable income reduces some of the stress.

Work also brings with it titles and position power, the stuff of social currency in ours and other industrial cultures. Position power cannot be underestimated. The consultant has as much power as the plumber if the pipes burst or the toilet overflows. Temp workers know how little power they hold. It emboldens some to push hard to solve whatever they think they were asked to do with little regard for the long-term impact. Other temp workers are more reserved, so as to stay below the line of fire, get it done, and hope that, just maybe, somebody on the management side will grant them a stay, ask them to come aboard full-time, and join the club of long-term, healthcare-insured employment. How many people doing gig work would leap at the chance to become a full-time employee with one of their clients?

The gig economy is already changing organizational structures, impacting employment law, and reframing the social construction of our sense of self and our relationships with a work community.

The U.S. is hobbled by its inability to restructure healthcare. There are two basic paths to affordable health insurance in our country: qualify for Medicare or receive insurance through an employer. Gig work isn’t sustainable for many who need health insurance. And yet, companies don’t want to hire when the burden of carrying health insurance coverage adds 30% or more to the cost of carrying a full-time regular employee. We can wax romantic about pre-industrial days when bootstrap-pulling individuals worked for themselves in an agrarian and emerging industrial world, and then philosophize how the new gig world looks like a return to those good old-days, when work ethic was to glorify the Great Other. But sentimentality misses that healthcare wasn’t part of equation in the 19th century, and higher education was mostly an elitist’s endeavor. Throw into this mix that today’s work ethic is better described as working to glorify ourselves.

Call them “temp workers,” “gig workers,” or “improv artists,” the gig is up when psychological security is elusive. Paying rent or mortgage and having health insurance become overwhelmingly stressful. To throw another wrench in the system, one that our government in alignment with financial institutions created, is the reality that student loan debt is out of balance with the investment’s payback. Many people between 22 and 38 are constrained by rules for paying back their student loans. It’s inhibiting their ability to move and to do whatever creative endeavor they pursue. Short-term gigs don’t work for many college graduates who put 15-year liens on their financial future when they were teenagers.

Being in a “gig job” makes it worse. When our government turned over the management and collection of loan payments to large financial institutions, the result has been the creation of an indentured-servant class of workers, made up largely of middle and lower-middle income (former) students. They may be 35 years old, out of college for 13 years, but they get bi-weekly or monthly reminders that they are a powerless debtor, goaded by the hierarchy and faced with a hefty monthly surcharge. Keep in mind that not all who start college finish, but they will still carry the student debt.

We can criticize these young people for mortgaging their own future at 18, but it is not their fault. University tuition has risen faster than the rate of inflation for over 25 years, and those increases were precipitated by institutions gaming the system to make more money by competing for corporate money. Federal and state laws were changed to incentivize this competition. Meanwhile, the narrative that a university education will lead to prosperity didn’t change. Indeed, educational institutions and corporations didn’t want it to change and stepped up their marketing efforts to reify the myth because tuition funds provide the working capital needed to make investments to compete for more corporate money. In contrast, tenured faculty (the antithesis of a temp worker) barely noticed, don’t understand how it happened, or don’t care.

The gig economy is in another respect like a collection of specialists, and it works when it’s like a small farming town. Temporary work is common at harvest, but farm towns also have a significant number of independent small businesses serving a tight geographic area. We can point to other examples of how it will work and likely unfold, shaped by communication technologies that shrink the distance between people just as assuredly as it does the travel time to a major library.

The tension between freedom to do work one chooses versus the constraint of our culture to monetize everything will carry us into an Amazonian wilderness with all its bush, bugs, and beasts. How will its next iteration adapt, evolve, or die?

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Marc Porter, Ph.D.

Marc Porter, Ph.D.

Talent & Organizational Development Consultant

Marc Porter has been in talent development for more than 30 years, and held positions in both business and academe, directing corporate education strategy and leading university degree programs. Marc has designed online and onsite training and education solutions, from experiential team-building to competency-based technical education. He’s led large change management and OD efforts for for-profit and non-profit organizations. Marc lives in Northern California, which affords plenty of roads for motorcycling.

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