Gig work is everywhere, and companies are eager to capitalize on this cheaper source of labor. But gig work comes with significant drawbacks for workers. A recently proposed bi-partisan bill at the federal level (HB-8442) has come under fire for attempting to enshrine these drawbacks into federal law. Yet, laws that have attempted to regulate gig work contracts to ensure they have full employee benefits and protections (e.g., California’s AB5) have been undermined, with multiple exceptions carved out. From a legal perspective, what are the problems for gig workers?
Gig work, by relying on the independent contractor model, allows companies to pay workers for completing specific tasks without classifying them as an employee. This means the worker is not entitled to benefits including overtime, minimum wage, (un)paid time off, worker’s compensation should an accident occur, or many protections against discrimination. The thought is that independent contractors or gig workers exchange these benefits for the freedoms of working for themselves. They are theoretically given autonomy over when and how to work. Yet, we know many companies that rely on gig work, like ride share companies, stop just short of setting worker schedules, instead creating and relying on an algorithm that incentivizes working at specific times and locations, and penalizes gig workers who don’t.
If HB-8442 were to pass, companies nationwide would be incentivized to continue to increase their reliance on gig work. Companies are already turning to gig work to address their unfilled positions without increasing expenses or creating “decent work”. This is one of the lauded aspects of gig work: “From a cost perspective, organizations pursuing contingent workers would save on factors such as compensation, benefits, recruiting and training” (Zuech, 2021). In other words, the appeal for gig work for companies is that the labor itself is cheaper, they can offload the expenses of benefits (e.g., health insurance, retirement) to workers, and they don’t have to invest in developing human capital.
Gig work, by definition, is precarious work (e.g., Petriglieri, 2019). We know precarious work is bad for your health and wellbeing (Sverke, 2002). Also, young, non-white, individuals with low income are those who are most likely to be doing gig work (Pew, 2021), further compounding the challenges these groups face. In fact, these groups are also more likely to feel unsafe, be treated rudely, or experience unwanted sexual advances while engaging in their gig work (Pew, 2021). In the current model, gig work is, for most, not their primary employment, but is instead supplementary income, and is seen by a majority of gig workers as essential income (Pew, 2021).
I argue that our current model of gig work is a symptom of a system that undervalues and underinvests in human capital. Many employers are not paying their workers a livable wage, thus forcing the workers to look elsewhere for additional income. The schedule flexibility inherent in gig work is necessary for these workers who often have unpredictable schedules (a predictor of poor wellbeing in its own right). But, the lack of benefits or protections in gig work setups also means that workers need to have a primary employer that provides benefits or to be married to/a dependent of someone else that provides benefits. Moreover, neither job is incentivized to develop these workers so they can attain higher-wage jobs. This traps the worker in a place where they cannot advance in their primary form of employment and they cannot use their off-time to develop marketable skills (because they’re using this time to do gig work which also does not develop them). Not only is this problematic for the workers themselves, but is problematic for society at large, as the potential of an entire group of workers is being squandered.
If gig workers become federally enshrined as a unique class of workers, or if organizations continue to use gig work to complete necessary functions, we will continue to see the swelling of this precariously employed class. We will see continued under-investment in the workforce by organizations, and offloading of these development costs to individuals and/or taxpayers (in the case of government sponsored training programs). Right now, we think of gig work as largely “unskilled” labor that usually does not require specialized training. But, if this class of workers continues to grow, we will see gig work set ups for more traditional middle-class jobs.
Instead of glorifying this method of work, we should be striving to design meaningful jobs that are themselves inherently motivating. Instead of lauding gig work for providing flexibility, we should demand that organizations provide flexibility for all workers. And, most obviously, instead of applauding “the hustle” we should demand organizations pay livable wages so workers do not need to take on additional precarious employment just to make end’s meet.
-Keaton Fletcher
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