Reports of the death of the gig economy were greatly exaggerated

Wherever the gig economy has sprung up, most frequently in the form of applications such Uber, Lyft, Airbnb and others, we’ve seen strident, if not desperate opposition to it. This most frequently takes the form of state and municipal governments trying to regulate them out of existence, such as Boston recently began doing to Airbnb. The real actors behind these efforts are obviously the lobbyists and unions representing legacy industries which don’t want to see any competition coming into their field, such as taxi companies, traditional hotels and delivery services. No matter where the gig economy sprouts up it seems that somebody is immediately looking to stamp it out. This is particularly true in blue states where unions maintain a heavy amount of influence, but you see at least some level of resistance almost everywhere.

At the Washington Post this week, business columnist Robert J. Samuels takes a different approach. Rather than trying to kill off the gig economy by opposing it, he offers the novel opinion that maybe it never really existed in the first place. The piece, “Is the gig economy a myth?” looks at data from before the rise of such gig work up through today.

But suddenly, the debate has imploded; the gig economy may be a myth. A new survey by the Bureau of Labor Statistics found that, in 2017, the share of workers in “alternative employment arrangements” (gig jobs and other) was 10.1 percent of total employment, almost exactly what it was in 2005 (10.7 percent) and 1995 (9.9 percent). Whatever Uber and other digital platforms are doing, they haven’t altered long-term trends.

The 1995 survey, the first of its kind by the BLS, defined “traditional” job as permanent employment on a firm’s payroll. “Alternative” jobs fell into four groups: (1) on-call workers — for example, seasonal workers; (2) independent contractors — freelancers, self-employed consultants; (3) temps — people paid by a temp agency but who physically work at another company; and (4) contract firms that provide services to other firms (examples: security guards or cafeteria workers).

So the data being used to make this argument relies on the percentage of total employment in the country which falls under the category of “alternative” jobs. Those include “gigs” like being an Uber driver or an Airbnb host, but also seasonal workers, independent contractors and people who work at “regular” jobs but do so through temp agencies. And it appears to be true that the overall percentage of such workers in the total workforce hasn’t shifted all that much.

Samuelson quotes one liberal analyst as saying, “The nature of work hasn’t fundamentally changed. Freelancing and gig work are not taking over.”

I’ll go so far as to agree with that point as well. But was the gig economy ever intended to fundamentally change the nature of work? I would argue just the opposite. Traditional employers who can offer a relatively stable workplace, a steady paycheck and (hopefully) some benefits still represent the model of employment most workers seek out. But there were always people who fell through the cracks and either couldn’t find that sort of work in a weak economy or didn’t fit that mold very well. That was an untapped, if comparatively small market which the gig economy arrived to serve.

I take Ubers on a regular basis and always enjoy chatting with the drivers. I’ve met a few hard chargers in or around the larger cities who are doing it full time, but most of the drivers I talk to are part-time workers or retirees looking to supplement a fixed retirement income. For them, Uber or Lyft can be a blessing. The same goes for Airbnb. I haven’t had to make use of their services yet, but my friends who do tend to rave about it. And the people offering up an extra bedroom by the night are often in a position where they couldn’t afford to keep their house or apartment and pay the rent or mortgage without that bit of extra income from overnight guests.

So was the gig economy a “myth” all along? Only if you honestly thought it was going to replace significant amounts of the traditional employment market. But it’s clearly having an effect. Just ask anyone in the taxi industry or the hotel lobbying associations who are fighting tooth and claw to wipe out Airbnb.