A recent trip to the Harold Washington Library, in downtown Chicago, forced me to confront a conflict between the contingent workforce dogma Spend Matters preaches and my own skepticism about the modern job market.
As I passed the now-retired third floor circulation desk, I stumbled upon an intriguing art installation. “Working in America,” an exhibit by Project&, profiles the working lives of 24 everyday people. Inspired by the work of Studs Terkel, the project “explores authentic, raw and honest stories focused on the daily desire to survive, thrive, participate and contribute.”
Walking through the clusters of photographic portraits, printed on wood imitations of steamer trunks, I noted how the subjects represented the bedrock of the American economy — a high school principal, a farmer, a veteran, a mayor. These are the people who make the country function, I thought, noting the dignity and purpose in each person’s profession.
But as I passed the final block of workers, one profile caught me off guard.
This was not a job I had expected to see. To be sure, the exhibit included less-traditional jobs, too — a professional escort, an Olympic athlete, a body piercing artist — but a gig worker struck me as out of place. Surely TaskRabbits and Uber drivers were unqualified to represent working America alongside police officers and oil rig workers?
Yet I also remembered the oft-sage advice delivered by Andrew Karpie, research director for services and labor procurement at Spend Matters. New technologies are establishing intermediaries between companies and potential workers, allowing procurement organizations to tap new sources of value (and cost savings) through an effective use of the booming contingent workforce.
How appropriate, then, that this exhibit acknowledged and legitimized the gig worker, who can live his life on his terms while collaborating with contingent workforce and services procurement professionals to complete the work that keeps companies producing.
This rationalization was quickly clouded, however, by personal reservations.
I became a father in October. While I walked through the exhibit, I imagined what an interesting educational experience this would be to show my daughter, at an older age. And as I fantasized about her taking interest in some of the rewarding, honorable professions on display, I wondered how I would react if we came to this portrait and she looked up at me and said, “Wow, cool! Dad, when I grow up, I want to be a gig worker.”
I realized I would feel alarmed.
Is this my problem of dirty hands, I wondered? Could I, as an editor, advocate for a work arrangement that would distress me were my own child to call it her means of employment?
To resolve this conflict of interest, I needed to answer some burning questions. I needed to know just who this gig worker was, whether he was happy and how he thought of his life. I needed to know whether the contingent workforce, which Spend Matters implores procurement to take an interest in, is indeed a legitimate segment of the labor market that could hold its own among the other workers in this exhibit. I needed to demystify the gig economy.
Who is the Gig Worker?
David Alatorre, “gig economy worker and musician,” initiated my quandary, so he seemed the best place to start. He’s 28 and lives in San Francisco, because of course he does.
Photo by Lynsey Addario for Project&/Working in America
Alatorre is jack of all gigs. He builds Ikea furniture for TaskRabbit, purchases and delivers groceries for Instacart and drives for ridesharing services like Uber.
“It’s something new every day,” he says in his project profile. “So I’m not stuck in an office or I’m not stuck in my car. I get to meet new people and try new things every day.”
Alatorre fell into his lifestyle by refusing to fall into another. He dreams of making a living as a musician, leveraging a degree in audio engineering, but has yet to find full employment in his field. Needing flexible hours to rehearse and tour with his band, the gig economy seemed a natural fit while providing the fulfillment he desired.
“I probably would be pretty miserable doing some office job or delivery job having somebody looking over my shoulder all of the time,” he says. “I like being my own boss, and I’m glad that this has given me the opportunity to do so.”
So the gig worker seemed happy, at least. But beneath the surface lied the concerns driving my newfound parental anxiety.
Alatorre’s work is, as one may expect, inconsistent. He and his wife are managing “a huge student loan debt,” paying rent in their city’s infamously inflated housing market and saving to buy a condo. The freedom to pursue the life one wants is enviable, but New Parent Nick couldn’t help ask, “How do you get ahead like that? How can you let other people use you to mop their floors while they do yoga?”
My views and concerns about the gig economy, it turns out, are typical of the American public. A 2016 Pew Research Center study on gig work, online selling and home sharing found, for example, that a majority of Americans (68%) found the flexibility aspects of these jobs compelling.
Yet respondents also doubted whether these jobs are the type of work people can build careers out of (16% said they can; 41% thought they can’t) and worry that these jobs let companies take advantage of workers (23% thought they do; 32% disagreed) or place too much financial burden on workers (21% said they did; 29% disagreed).
Perhaps even more interesting than these splits in opinion is how, in most cases, around half of respondents were unsure about how to feel. Uncertainty about the gig economy stretches coast to coast.
Dig a little deeper, however, and the roots of this uncertainty start to become clearer. No one can fully agree just what the gig economy or who exactly the gig worker is, a fact that puts procurement organizations in a unique position regarding the labor market.
Deeper into the Mist
The confusion can blamed, as can most things these days, on the media. Our analyst Andrew Karpie summarized why in a post earlier this year:
These days, one cannot swing a dead cat, as the saying goes, without having contact with the “gig economy.” The media are all aflutter — or shall we say, atwitter — about the “gig economy” or “on-demand economy,” both of which usually mean people doing low-skill, low-wage jobs on a contingent basis.
You can imagine my surprise, then, when I discovered just how overblown the gig economy is when you look at the numbers. Workers who provide services through online intermediaries like TaskRabbit accounted for 0.5% of all workers in 2015 — hardly a new insurgent trend.
But that statistic comes with its own caveat: A gig worker is defined as someone whose main job or secondary job consists of direct selling to customers, whether online or offline. That’s an interesting definition. What makes this whole question so difficult, though, is that it’s pretty easy to find dissenting definitions, each with their own motives.
Staffing Industry Analysts says all 44 million contingent workers are part of the gig economy. McKinsey defined it as independent workers who chose when to work, had multiple employers and could move between jobs fluidly. Broad definitions such as these put the gig workforce between 20%–30% of people in the U.S. That inclusive spirit certainly makes the services of the above firms more valuable, if this is the case.
The much smaller number above comes from a joint study by Lawrence Katz and Alan Krueger, of Harvard and Princeton Universities. In “The Rise and Nature of Alternative Work Arrangements in the United States, 1995–2015,” the two economists more thoroughly segment contingent workers to examine the comparative contributions to employment and wage growth of different kinds of alternative work arrangements.
The authors list four segments:
- Independent Contractors: Individuals who report they obtain customers on their own to provide a product or service as an independent contractor, independent consultant or freelance worker
- On-Call Workers: Those who reported having certain days or hours in which they are not at work but are on standby until called to work
- Temporary Help Agency Workers: Workers who are paid by a temporary help agency
- Workers Provided by Contract Firms: Individuals who worked for a company that contracted their services during the week referenced in the study
If representatives of the gig economy are truly TaskRabbits and Uber drivers, then the last three categories don’t really qualify, even though all four categories do represent the available contingent workforce, from a procurement point of view. Whether “independent contractor” is the correct term for these workers is a rabbit hole best avoided here, but suffice to say, nailing down the gig economy is tricky.
Even within this one segment, not all work arrangements are created equal. The incidence of alternative work is greater among workers who are predicted to have higher wages, muddying the narrative of David Alatorre.
This reflects the advice shared in an October Harvard Business Review article by Diane Mulcahy, a professor at Harvard Business School. She tells her MBA students to “stop looking for a job and join the gig economy” because, among other reasons, “companies are increasingly disaggregating work from jobs.” For an HBS student, she says, this means, if present trends continue, they would be able to leverage their skills as a marketing strategy consultant more easily than they could find full-time employment doing similar work.
Shaping the Future of Work
Learning this didn’t necessarily ease my worries about raising a gig working child, but it did help me realize that the contingent workforce is bigger and more complicated that at first blush. The takeaway — for both new fathers and procurement — is that the gig economy is really a development building on past trends rather than a massive new force in the labor market.
Decades ago, construction workers, who are mainly contractors, dominated the contingent workforce conversation. Industrial and commercial logistics staffing, which temp workers augment around this time every year, have been part of the job market for quite a long time. Sure, they weren’t summoned to the warehouse by someone in the procurement department tapping their fingers on a tiny, all-knowing rectangle, but the nature of the arrangement has mostly remained same.
Heck, even I’ve done some contingent work during during my short time in the labor pool. I’ve moonlighted as a cellist, playing in a pit orchestra on nights and weekends. Back in my more musical past, I would have just called it a gig.
Here’s my message to you, procurement people: Don’t get misled by all of the hype. Look at the history and strive to understand alternative work in all of its forms. Scrutinize the enthusiasm and the marketing hyperbole. There are opportunities and risks for procurement and the people putting themselves out there as workers, so let’s try to make the economy work as best we can for everyone involved.
Who knows? Maybe I’ll grow up someday and decide I want to be a gig worker, too.