What Happens When the "Gig" Economy Crashes?

Warner issues warning about no-benefit jobs.



U.S. Sen. Mark Warner is on to something when he questions just what happens when the U.S. economy becomes more dependent upon work “gigs,” in which part-time laborers with no benefits struggle to provide services that used to be handled by full-time employees.

In the Gig economy, workers, many of them young or middle-aged who were laid off from traditional jobs, work for themselves. They have the freedom to choose what they want to do and when they want to work, but get none of the benefits, such as medical care, retirement, maternity or paternity leave, that employees of more standard companies get.

"This next generation, where they are in the 'sharing economy,' the Millennials, 80 million strong, they have no safety net at all: no unemployment, no workman's comp, no disability," the Virginia senator told USAToday.

These are great questions -- ones that many in management would sooner forget.

Millennials will be confronting them as routine life requirements. They will have to be more entrepreneurial at earlier ages than workers, say, like me, who labored for years at some fairly large companies that did provide generous packages of benefits -- right up to when I went independent in 2003.

Being entrepreneurial means having the skills and talent to market oneself. Traditional workers need to apply for jobs, get the resumes out, have the interviews, remember the thank-you notes, make it past human resources and hopefully, land the job.

But today, a Gig worker must be multitasking upon multitasking. It’s like applying to 20 jobs at once and then doing all 20 jobs with little if no benefits.

This move to outsourcing has been praised out the wazoo at business schools as more jobs were shipped to laborers in other countries. But remember that real income in the United States has dipped while the income of chief executives has soared.

And remember that still, in many countries, workers are covered for health, vacations, life insurance, retirement and so on. In any talk of offshoring jobs, the emphasis automatically goes to the lowest-common denominator -- namely, to poor workers willing to do work for a pittance.

That’s not really fair because, for example, many countries in Europe and Asia offer single-payer medical care. Call it socialized medicine or whatever you want, but the government still picks up the tab for most ailments. The United States is the only large, advanced industrialized country that does not.

This is exactly why Warner’s points are important. What happens when a Gig worker driving an Uber cab or doing various jobs through TaskRabbit suddenly becomes sick or injured? What happens when tens of thousands of them become sick or injured?

If they don’t have insurance, they’ll likely end up in an emergency room at taxpayers’ expense. Of course, the taxpayer and the employer hadn’t been bothered with paying for this -- at least at the front end. But they will pay on the back end, and that’s Warner’s warning.

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