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How Side Hustles Can Keep Workers A Step Ahead Of Automation

Part-time gig work has allowed many to gain crucial experience before losing a job, making occupational transitions smoother and, at times, more lucrative.

How Side Hustles Can Keep Workers A Step Ahead Of Automation
[Photo: Rawpixel]

Training people for the next wave of jobs will not be easy, but many of the most resilient cities and workers have already found a successful strategy: side work. There are millions of healthcare aides, electricians, and programmers who carve out time during the week to gain valuable job experience before moving on to that new gig. I recently analyzed a series of public economic datasets on workers with a side hustle, and found that those with a skilled part-time secondary job earned 44% more after switching up, about twice those with only one job.

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Now, I don’t want to sugarcoat the murkier elements of the gig economy or the fact that side hustles are an inaccessible occupational luxury for many disadvantaged groups who need full-time health benefits or can’t work extra hours to learn new skills. But I also don’t think we should let what’s going wrong with gig work blind us from learning from those who are successfully leveraging skilled self-employed side work for upward mobility. And I think the data on side work holds important clues for how to update labor and education policies that were designed for a Depression-era economy, when a single-job-for-life was considered a rare blessing.

I’ll dig into the data a bit more below, but I wanted to share a few stories of everyday Americans using side work; these stories grounded me as I was poring over faceless spreadsheets, where each row represented a real person’s history.

Maybe the most fascinating person I came across was a Kentucky Ford factory worker who moonlights as a travel agent on the side. He told me, “If Ford calls today and says, ‘We’re closed,’ I’ll be good tomorrow.’ During my investigation, I was surprised to learn that the travel agency business hadn’t been obliterated by internet comparison websites.

It turns out, humans still have a desirable role in giving concierge service to consumers who want to plan the perfect vacation. Indeed, in some ways, the proliferation of booking sites has made planning a trip even harder and increased the need for human interaction, to help customers sort through all the noise. This need has manifested in part-time travel agency work.

Now, many jobs still require some form of traditional school. While investigating how people were training for more advanced technical jobs, I came across Treehouse, an online learning platform for software development. The CEO, Ryan Carson, told me that a lot of users learn coding part-time over a few weeks and then freelance before finding a career.

One such user was Oklahoma working mom Priscilla Luna, who writes about how she managed to take care of newborn twins while learning to code. “The twins would nap, and I would learn. The kids would go to bed at night and I would work on a project,” Luna explains on Treehouse’s blog. What started out as freelance work became a full-time, front-end developer job.

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[Image: Greg Ferenstein]
Side work is particularly helpful for the scourge of automated job loss. Recent research from economists David Autor and Anna Salomons at the Brookings Institute finds that automation ends up creating more jobs than it destroys. However, those jobs are often more complex.

Even after school-like retraining programs, many displaced workers end up making substantially less at their new jobs. I analyzed a special supplement to the Census, the Displaced Worker survey, and found that job tenure plays a big role in wages. It wasn’t surprising to find that those who have been at a job a long time face steeper earnings losses. Older workers can face losses of around $15,000 over a one- to three-year period.

But the experience of the hardest hit workers is also a clue to more good news: Job experience pays well because people are learning how to perform better every year. That is, job experience is an important source of wage growth.

Public data on the effect of job experience on wages is difficult to come by, so I asked a Bay Area jobs startup, TalentWorks, to analyze their large database of resumes and job offers to simulate how a few extra years of experience could offset income losses. They found that five years of job experience could boost initial wages around 54%, or almost all the expected wage loss due to displacement.

[Image: courtesy of TalentWorks]
The availability of gig work has allowed many to gain job experience part-time before losing a job, making occupational transitions smoother, as they wind down hours in their current job.

In some ways, gradual transitions are already happening to many workers whether they like it or not. Recent research from the Upjohn Institute finds that before workers lose a job, their hours tend to dip. When they get a new job, it is often part-time. That is, automated job loss isn’t always clean cut, where workers are let go to find another full-time position. It’s more like a slow decline and then slow ramp-up.

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Automation is making it possible to hyper-efficiently schedule retail workers to precisely match fluctuations in demand, from weather to sporting events. Oregon has passed legislation on advance-notice scheduling, but that may not fix the problem, as retail workers are slowly replaced by machines.

Instead of being held captive by this hourly shift, flexible gig work can allow workers to gain job experience in their newly free hours before job loss and cover them while they work their way back up to full-time employment. The other option is what former President Barack Obama once referred to as “train and pray,” where we wait until workers lose a job, put them in school, and hope a credential will lead to gainful employment.

But because many employee benefit laws are still attached to a strict 40-hour workweek, it makes this kind of strategy difficult, and leveraging gig work especially hard for some workers. I met one Uber driver in the Bay Area who sleeps in his car for three days in a row before returning to his wife and two kids in Sacramento. Sky-high housing prices due to lack of apartment construction have pushed many families into long commutes to find work in San Francisco; some sleep in motels or their cars to avoid daily commutes.

For this driver that I spoke with, while he’s not working for Uber, he had a side hobby taking photos of friends. “Turns out, they were pretty good pictures,” he told me. The praise inspired him to learn professional photography on YouTube and gradually build up a business as a wedding photographer. The driver tells me that he had a job working security and for AAA, but he likes Uber’s flexibility more. The flexibility helps him build up his side career and spend time with his family.

In a typical wage job, worker benefits are tied to a 40-hour workweek, which tethers many people to employment that leaves little room for skill diversification. Many workers acquiesce to wage work, trading flexibility and upward mobility for security and health benefits.

This is why groups such as the Aspen Institute and Senator Mark Warner (D-VA) have pushed for so-called “portable benefits” that detach benefits from a single employer. I’ve also been personally involved in legislation that would expand the federal wage subsidy, the Earned Income Tax Credit, which would allow workers to carve out a few hours per month for side work without loss of income.

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There are important policy reforms that need to take place so that workers are protected in the wild new world of independent work, and leverage it to thrive through automation.


Greg Ferenstein is a contractor with Tech4America, a San Francisco-based tech policy nonprofit. This blog post summarizes a report that is part of Tech4America’s Future of Work series. A constantly updated version of the report is here.

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