The “gig” economy has captured the attention of technology futurists, journalists, academics and policymakers.
“Future of work” discussions tend toward two extremes: breathless excitement at the brave new world that provides greater flexibility, mobility and entrepreneurial energy, or dire accounts of its immiserating impacts on workers.
These widely diverging views may be partly due to the many definitions of what constitutes “gig work” and the resulting difficulties in measuring its prevalence. As an academic who has studied workplace laws for decades and ran the federal agency that enforces workplace protections during the Obama administration, I know the way we define, measure and treat gig workers under the law has significant consequences.
While there are benefits for workers for this emerging model of employment, there are pitfalls as well. Confusion over the meaning and size of the gig workforce can obscure the problems gig status can have on workers’ earnings, workplace conditions and opportunities.
Initially, the phrase “gig economy” focused on professional and semiprofessional workers chasing short-term work. The term soon applied to a variety of jobs in low-paid occupations. Later, the rapid ascent of Uber, Lyft and DoorDash led the term gig to be associated with platform and digital business models.
The imprecision of gig, therefore, connotes different things. These differing definitions have led to widely varying estimates of its prevalence.
A conservative estimate from the Bureau of Labor Statistics’ household-based survey of “alternative work arrangements” suggests that gig workers “in non-standard categories” account for about 10% of employment. Alternatively, other researchers estimate the prevalence as three times as common, or 32.5%, using a Federal Reserve survey that broadly defines gig work to include any work that is temporary and variable.
Many workers operating in gig arrangements are classified as independent contractors rather than employees. As independent contractors, workers lose rights to a minimum wage, overtime and a safe and healthy work environment, as well as protections against discrimination and harassment. Independent contractors also lose access to unemployment insurance, workers’ compensation and paid sick leave now required in many states.
Federal and state laws differ in the factors they draw on to make that call. A key concept underlying that determination is how “economically dependent” the worker is on the employer or contracting party. Greater economic independence – for example, the ability to determine the price of service, and how and where tasks are done – suggests a role as an independent contractor.
In contrast, if the hiring party basically calls the shots – for example, controlling what the individual does, when they do their work and what performance is deemed acceptable – this suggests employee status. That’s because workplace laws are generally geared toward employees and seek to protect workers who have unequal bargaining leverage in the labor market.
Since gig work tends to be volatile and contingent, losing employment protections amplifies the precariousness of work.
Many companies have incentives to misclassify these workers as independent contractors in order to reduce costs and risks. A business using misclassified workers can gain cost advantages over competitors. And this competitive dynamic can spread misclassification.
The future of work is not governed by immutable technological forces but involves volitional private and public choices. Navigating to that future requires weighing the benefits gig work can provide some workers with greater economic independence against the continuing need to protect and bestow rights for the many workers who will continue to play on a very uneven playing field in the labor market.
David Weil is a visiting senior faculty fellow at the Ash Center for Democracy at the Harvard Kennedy School of Government and a professor at the Heller School for Social Policy and Management at Brandeis University. Distributed by The Associated Press.
