Gig Economy Today, finding a jobis undoubtedly easier than it has been in previous years, butfinding a good one isn't. (Photo: Shutterstock)

|

The gig economy is booming as more Americans opt for job flexibility versus the traditionalnine-to-five. However, this rapid growth is not without resistance.Protesters and government officials are urging gig economy giants,like Uber and Doordash, to embrace employer status. Why is this such animportant initiative? Because gig workers are struggling to makeends meet, while corporations are capitalizing off of theworkforce's back.

|

Today, the U.S. economy is healthy—in fact, it's better thanhealthy. According to the Bureau of Labor Statistics (BLS), totalemployment is expected to increase by 20.5 million jobs between 2010 and 2020, with 88percent of all occupations experiencing this growth. While it'seasy for the BLS to make this determination, they're unable toaccurately measure the current state of our temporary workforce.Due to great confusion over the term "gig work," estimates of howmany Americans take part in non-full time work vary greatly—not tomention how these workers are faring financially.

|

Related: The external workforce: It's more than agig

|

The gig economy is creating financial hardship for millions ofAmerican workers, even as the overall economy continues to expand.So, how can we realistically say that the U.S. economy is thrivingwhen we're not considering the status of a great portion of thecountry's workforce?

|

Gig workers are struggling

The BLS estimates that there are 5.9 million contingent workers in the U.S.,while a study from Upwork found that there are 57.3 million gigworkers. Ignoring the vast disparity between these two estimates,whatever the number is, a decent portion of America's workforce isstruggling financially.

|

According to a Federal Reserve report on economic well-being inthe U.S., workers who supported themselves through the gig economystruggled financially far more than the average person. Fifty-eight percent of full-time gig workerssaid they would have a hard time coming up with $400 to cover anemergency bill — compared to 38 percent of people who don't work inthe gig economy. Both numbers are alarming, but the gap suggeststhat this informal economy is destabilizing to those who powerit.

|

To make matters worse, gig workers typically don't receivebenefits and protections, such as worker's compensation and health care. In otherwords, the group of people that would most likely need to dip intotheir pockets for an emergency expense are the same people whofinancially wouldn't be able to.

|

Why is the gig economy growing?

Today, finding a job is undoubtedly easier than it has been inprevious years, but finding a good one isn't. And the gig economyis partly to blame. Sure, people turn to the gig economy for theflexible hours, but for many, the easy and immediate access towages through gig economy platforms is the only way to make endsmeet.

|

The growth of the gig economy is also driven by corporateAmerica who classifies their workforce as independent contractorsto avoid the costs associated with classifying them as employees.For instance, if Uber and Lyft were required to embrace atraditional employer status, they could incur increased labor costsof 20 to 30 percent.

|

Even more traditional retailers are embracing the gig economy.Home improvement giant Lowes recently announced their plans to lay offthousands of maintenance and assembly workers, whose jobs will beoutsourced to independent contractors. This move is a directrepercussion of the labor shortage, which is pressuring employersto increase pay to attract talent, subsequently forcing them toadjust their staffing plans to make up for the costs.

|

The solution: Embracing employer status

Understandably, the gig economy is an attractive andcost-effective staffing option for business owners. However, themoral dilemma associated with not providing a workforce with atleast minimum wage and access to benefits is the real issue athand. Labor groups and government officials have taken note, andare pushing back against gig economy giants for underminingcenturies of worker's rights by strategically classifying theiremployees as independent contractors.

|

Gig workers themselves are also taking stand. In particular,tech giants like Google have been in the limelight as of late, astheir bevy of independent contractors have stepped up to requestthe same basic employee rights that the company's full-timeemployees are privy to. Last December, Google's contractorssent an open letter to CEO Sundar Pichai,demanding the same benefits, protections and basic corporatecommunications as full-time employees. These types of boldinitiatives are powerful steps forward in changing the unjusttribulations facing gig workers, but more needs to be done.

|

As tech has undeniably powered the growth of the gig economy, itcan also be used to enforce change. Platforms that embrace employerstatus of a company's workforce and then leases those workers backto the operator facilitate a best-of-both-worlds scenario for allparties. The workforce is able to receive benefits and protections,and business operators don't need to concern themselves with highlabor costs, tedious employee paperwork and other administrativeburdens that come with embracing employer status.

|

It's easy to say that the economy is thriving, especially incomparison to recent years, but is this statement factual giventhat a vast portion of America's workforce is strugglingfinancially? In order to make change and empower the nation's gigeconomy financially, business operators need to step up and accepttheir dutiful position as employers.

|

Scott Absher is CEO and co-founderof ShiftPixy.


Read more: 

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.