In the era of the side hustle, more and more people are relying on freelance work as a piece of their overall income. For some, that means consulting, for others it means driving for Uber. But for all gig economy workers, this new labor dynamic conjures big questions about the future of work and how social benefits, like health insurance and paid time off, should evolve.
Sarah Kessler, the deputy editor for Quartz at Work and a former reporter for Fast Company, took an in-depth look at what it means to live as a gig worker in her new book Gigged: The End of the Job and the Future of Work. The book, which comes out today, follows a number of gig workers (an Uber driver, a Mechanical Turk worker, a programmer in New York, a man trying to connect unemployed people in Arkansas with work) as well as companies that are trying to figure out whether contract labor is really worth the financial savings. Kessler also looks at the regulatory landscape and the people who are trying to usher in benefits for this growing class of worker.
We sat down with Kessler to discuss how the gig economy has evolved since she first started covering it, and what the future of work looks like.
Fast Company: How is the book different from the reporting you’ve done in the past?
Sarah Kessler: I wrote my first article about the gig economy in 2011 before it was called the gig economy, and I called it online odd jobs. At the time I was covering startups and I was hearing all of them describe this experience where you could press a button and work would come to you, and it would be flexible and it would be independent and we would all be free from drudgery, and that sounded great. And then a few years later, “Pixel and Dimed” [a Fast Company story from 2014] was kind of me trying to test the pitch of what it would be like to do this work, and so I took a month and I tried to make a living on all these apps.
The idea that this would work the same for everybody—it’s not real. Despite my college degree and all my other advantages. I had a really hard time making a living and it didn’t look anything like the pitch.
FC: How does the book differ from past reporting you’ve done on the gig economy?
SK: There was this conversation in Silicon Valley that the gig economy was awesome, and then you had another narrative about how this was going to be the next sweatshop. Almost nobody was looking at it from the perspective of people actually doing the work in their day-to-day lives.
So the Silicon Valley pitch was true, but that was how it would work for programmers. And I actually did follow a programmer who was a millennial and kind of just graduated from college and he was super bored at his job—like he would work half the day and then have nothing to do, and was just miserable. And so he quit. And by joining a gig economy of programmers, he was able to get enough work where he instantly made as much money as he had made in his full-time job. But he has a highly in-demand skill that is highly paid, and he was able to save a year’s worth of living expenses before he quit his job, and he was able to buy his own health insurance, so he didn’t really feel this sense of instability that some of the other people who I followed did.
FC: A lot of people think of the gig economy in terms of Uber and Lyft, but it’s much larger than that. How did you define it in your book?
SK: I thought of the gig economy not as only Uber and Lyft, which is what everybody talks about, but as ways that technology is making it easier to structure work in ways other than a traditional job. You wouldn’t think of Sears as a gig economy company. But the truth is that they contract the customer service to a company that contracts work to a small business that contracts with an independent contractor, who I followed in Arkansas. He takes customer service calls about people’s air conditioners in his home and has no relationship with Sears—and that’s also the gig economy. There’s a version of this in every industry: There are apps that will fill your shift at a restaurant quickly. Apps for CPAs. Companies like Accenture talking about how they want to try to see the future of the organization as structuring its project-based work.
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FC: The gig economy was born at a time when we were like trying to get out of the recession and also around the time the Affordable Care Act was getting off the ground. So there was a perfect storm for the rise of the gig economy.
SK: Many decades ago, we made all these policies and laws that attach a kind of social safety net of programs to the idea of a traditional 9-to-5 job. If you’re a freelancer, you don’t have things like minimum wage or paid lunch breaks or workers’ compensation and unemployment insurance. So there’s a huge incentive to hire people that way. And I think that that is not going away, and that’s good for companies in bad times and that’s good for companies in good times. So that’s why I’m not sure that this will reverse itself now that we’re in better times. But having said that, there’s not really great data about this.
FC: A recent study from the Bureau of Labor Statistics said the gig economy is not only small, but that it’s also decreased in size since 2005. What do you make of that?
SK: There are a lot of people who don’t fit into the BLS data that would still be counted as freelancers under other definitions (like people working this way for supplemental income).
But the best estimate we have about what’s called contingent work—which is where it’s not traditional and you’re not directly employed—is [one that was conducted using data from] between 2005 and 2015. [During that time] almost all jobs or work that was added to the U.S. economy was something other than that traditional direct employment. And so that to me suggests that it is the part of the economy that is growing.
Whether or not these types of arrangements become a bigger part of our economy (remember that 24 years after Amazon was founded, only 16% of retail is e-commerce), I think that those weaknesses in how we support workers are important [to pay attention to].
FC: What are the drawbacks of working this way?
SK: I think there’s a reason that modern societies have developed a social safety net of programs, and it’s that when people are safe, they do things like take risks and start businesses and buy—things that are all really good for the economy. And so if we have more people working as independents or in contractor relationships, then we have fewer people who have that safety, and that might be bad for our economy.
FC: How are we seeing regulators respond to this?
SK: There’s been kind of an idea about how we might restructure benefits so that they work better for people working in a freelance environment. But there’s been really no action on that.
What’s interesting is almost everybody agrees that portable benefits—the idea that maybe companies could contribute to a fund when they hire freelancers that freelancers could use to buy things like health insurance or unemployment insurance—are a good idea. But then when you talk about the details, you realize that when the Silicon Valley companies say this is a good idea, it means something very different than when the labor unions think this is a good idea. And so there is more controversy around this than is readily apparent.
FC: What are the good things that have come out of the gig economy? Obviously, there are people who like working this way, though it’s unclear whether it’s like a long-term solution for a lot of people. What did you find?
SK: I talked to “digital nomads” who use freelance work as a way to travel the world and they love it. I talked to a mother who was a former McKinsey consultant who used the gig economy as a way to balance her ambition with her desire to be around for her children at certain times of the day. She could structure her projects flexibly in a way that works for her–and that’s a really good thing. But those people tended to be able to afford to create their own safety net in the form of savings accounts or insurance they purchased themselves.
I also talked to people who weren’t able to do that who also liked working this way but would say things like, “Oh, it’s great for now, but if I ever had kids, like there’s no way I’d be able to do this.” Or “I’m afraid of what would happen if like my one client left me. At any moment, I would be totally unable to pay my bills.” There’s a sense of insecurity that I think is important to pay attention to.
FC: There’s this notion that full-time work can’t be flexible.
SK: And that’s a lie. A company can give their employees unlimited flexibility. But the reality is very few companies do. So a large consulting firm is not going to just totally change the way that it works overnight.
FC: Sometimes the gig economy feels like a stop-gap on the way to a better work format.
SK: It could be a really good thing if we changed the way that we structured our society a little bit. When the industrial revolution happened, and people went from working independently on farms to cities where they worked in factories, we had to figure a lot of things out: Like, maybe we shouldn’t have child labor and we should make laws about that. And like maybe we should build benefits that we’re going to attach to this job. And so I think that there’s an opportunity to do that for the gig economy that would make it a lot better for a lot more people.