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The Sharing Economy and Its Discontents

Tue, Nov 18, 2014

the sharing economy and its discontentsThe number of temporary/contingent workers has been growing in all industrial and post-industrial nations in recent years. In 2006, the last time that the U.S. federal government made such calculations, it estimated that 42.6 million workers — or 30 percent of the workforce — held temporary jobs, which includes individuals who are self-employed or work in part-time, contract or various non-standard positions. Current projections indicate that by 2020, 40 percent of the U.S. labor force will be made up of contingent workers.

Another type of temporary worker has arisen under a new employment system due to the 2008 financial crisis, the dramatic upturn in unemployment and technological advances. This innovative employment relationship has been labeled as the “sharing economy” or the “gig economy” where workers utilize online platforms, such as Uber, TaskRabbit and Fiver, on their smartphones to apply for short-term jobs with people that advertise that they need a ride to the airport, a house cleaned, a student tutored, packages wrapped, items shopped for and delivered. The companies sponsoring these online platforms receive a cut of the workers’ compensation for serving as middlemen linking buyers and sellers of these services.

Sharing economy proponents argue that the system’s benefits include workers having the flexibility to perform different tasks during the day while being able to control their own work schedules. These advocates also claim that employees can hold onto their permanent positions while performing side jobs for extra cash. For example, such workers have even performed gigs during their lunch hours.

What has been the experience of wage earners who have participated in the sharing economy? In an August 2014 article published in The New York Times, Jennifer Guidry, who lives in a Boston suburb, stated that she earned approximately $263 working a variety of gigs over one 19-hour stretch. Averaging $13.63 per hour, during this period Guidry transported people to Logan Airport, city nightclubs and parties, childproofed a cabinet containing wedding china and crystal glasses, modified a child-safety gate, installed a wind chime and shopped at a farmer’s market for the preparation of a client’s meal. Guidry remarked that she has “done everything from painting and catering to dog sitting.” Because of her childcare responsibilities as a stay-at-home mother, she stated that the gig economy is “a sustainable model for me.” After her 19-hour work day, however, Guidry admitted, “It was a good day I would say, all in all, but a long day. I can’t do many of these.”

In “Pixel & Dimed: On (Not) Getting By In The Gig Economy,” published in the May 2014 issue of Fast Company, Sarah Kessler, the author, describes her experience of attempting to find gigs as well as working these jobs in the sharing economy in New York City over a four-week period. Although initially finding it difficult to land gigs, she performed many piecemeal jobs for extremely low pay rates. During Kessler’s most successful day at TaskRabbit, she earned $95 for 8.5 hours’ worth of gigs. In evaluating her experience she concluded, “Instead of the labor revolution I had been promised, all I found was hard work, low pay and a system that puts workers at a disadvantage.”

Although sharing economy work offers opportunities to perform different tasks within one workday while providing flexibility in completing these responsibilities, it still compares unfavorably with other types of employment. While many standard, full-time employment situations offer workers such benefits as vacation, sick days, health insurance and pensions, all sharing economy workers lack these basic protections. Additionally, employees who hold full-time positions in standard employment relationships might experience varying intensities at work. There might be periods of time, for example, where workers are extremely busy, while during other stretches, the pace is more relaxed. Assuming one is trying to cobble together full-time work in the sharing economy, a worker will continuously be busy trying to line up appropriate gigs that pay living wages in addition to actually working them.

Much work during the “Golden Age of Capitalism” (circa 1948 to 1972) was unskilled and semiskilled work found in manufacturing industries that subjected U.S. workers to the Fordist production model where they often experienced intensified labor through completing routine tasks under assembly-line conditions. But there were at least positive aspects of this employment relationship. While these manufacturing workers, many who were unionized, received an array of benefits including health insurance and pensions, they also possessed job security while earning decent wages enabling them to raise families in a modicum of comfort while carving out lives for themselves outside of work. When compared to the Fordist production model, the gig economy is a major step backwards in employment relations. While the sharing economy might benefit some workers in the short term, it fails to offer a long-term solution to the employment crisis that has become much more serious under a hypercompetitive neoliberal capitalism.

By Victor Devinatz

Dr. Victor G. Devinatz is a Distinguished Professor of Management, specializing in labor relations and the Hobart and Marian Gardner Hinderliter Endowed Professor (2014-2015) at Illinois State University. He can be contacted at vgdevin@ilstu.edu.

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