June 24, 2024

The rise of gig workers is changing the face of the US economy


The Angels
CNN

Lazarus Limo usually starts its day at 10 am ET, driving passengers and delivering food for Uber around Chapel Hill, North Carolina.

“I tend to set a minimum target of how much I should get by the end of the day. As soon as I get my goal, that’s it; I’m done for the day,” he said. His goal is usually to make between $200 and $300 and, depending on the day, it might take 8 to 10 hours to get there, he told CNN.

But that’s just his job during the week.

On weekends, 28-year-old Limo works as a “Dasher,” delivering food orders for DoorDash.

He is one of millions of people in the United States who participate in the so-called “gig economy,” a term that has exploded in the past decade to describe the rise of freelance work through apps like Uber, Lyft, Doordash. and Instacart.

The government’s data on this group of workers is unclear. The last time the Bureau of Labor Statistics officially tracked workers with alternative employment arrangements was 2017. But workplace experts say the number of gig workers is growing, and their impact is being felt across the economy. It could even distort government economic data, they say. For example, work easily accessible through mobile phones may be keeping the national unemployment rate lower than it would be without the rise of these workers. It could also be a factor in helping more people avoid bankruptcy, providing a backup option for those who have been laid off in recent years, they say.

“People who have access to the gig economy borrow less money than people who don’t. You can think of it as an alternative to debt for some people — a way to get through volatile times,” said Louis Hyman, a professor of labor and business at Cornell University. “Society needs to account for these different kinds of experiences.”

During the Covid pandemic, newer work platforms such as DoorDash and Uber Eats have exploded as millions shelter at home and turn to online delivery. Recent data shows that the number of people working with these platforms has also increased. A paper published by the University of Chicago in May which tracks earnings through tax filings found that the number of people reporting income from platform-based gig work to the IRS has increased in recent years from just over a million. workers to almost five million – a clear indication of how many more people use technology platforms to help survive.

Internal data from the companies themselves shows an increasing number of participants in the gig economy. In February, Uber reported that its “earners”, as it calls its drivers and food delivery workers, reached a record number of 5.4 million in the fourth quarter of 2022. DoorDash currently has more than two million monthly active Dashers, according to Jenn Rosenberg, a company spokeswoman. More than 13 million Dashers have used the platform since it launched ten years ago. Flex, a trade association representing DoorDash, Grubhub, HopSkipDrive, Instacart, Lyft, Shipt and Uber, estimates that more than 23 million Americans have earned money through an online platform in the past 12 months.

Hyman said the growth of these online platforms was “made possible by the lack of service work” because workers can set their own hours – an advantage that cannot be found in traditional service industry jobs.

“He’s a backup in a lot of ways, and he’s always an alternative. If you don’t want to work in a restaurant or the other types of service work, you can do this instead,” he said.

Despite the fact that many gig workers do not have access to benefits such as workplace-provided health insurance or retirement benefits, which come from a traditional 9-5 job, there are some advantages to online gig work.

“It allows people to search longer for their next job. If they are laid off, they have more of a safety net than unemployment insurance and rely on family and friends and their savings,” said Erica Groshen, former commissioner of the Bureau of Labor Statistics.

Limo is in that category. He started using platforms like Uber, DoorDash and Grubhub part-time to help pay for college but started his full-time gig work when a contract to work as an electrical technician ended last year. He sees the work as temporary, however. “When I make a certain amount of income, I won’t have to do that,” he said.

Working in the gig economy can help people spend more time looking for their next job, if they are out of work.

Its 2020 study ​​​​The Massachusetts Institute of Technology found that platforms like Uber and Lyft could help reduce the pressure on unemployment insurance and help keep personal debt down by comparing unemployment data, credit data from Equifax and car registration data. The study found that laid-off workers who had access to Uber were less likely to apply for unemployment insurance benefits and rely on borrowing money.

That phenomenon could be partly reflected in the current economic data: Despite an overall slowdown in economic growth, the unemployment rate has remained at multi-year lows, and is currently only 3.6%. Personal bankruptcies are lower than pre-pandemic levels, too. According to the government detailsthere were more than 388,000 non-business bankruptcies between March 2022 and March 2023, well below levels from a few years ago: In 2019, more than 750,000 non-business bankruptcies were filed.

According to DoorDash and Uber, most of their workers do the job part-time to supplement other sources of income. According to Doordash, 90% of their workers work less than 10 hours per week on the platform. As of the first quarter of 2023, Uber said 48% of its “experts” were online less than 10 hours a week on average, and 71% less than 20 on average.

Gig workers float under the radar when it comes to being officially counted by the federal government. The last BLS survey of workers in short-term jobs and other work arrangements found that only 1% of workers used an app for work. Susan Houseman, director of research at the WE Upjohn Employment Research Institute in Kalamazoo, Michigan, said she believes the federal government’s survey underestimated the number of workers.

A spokesperson for the BLS confirmed that it will resume a new version of its survey to count people working in temporary or alternative jobs, and the public release of the data is expected “sometime in 2024.”

The lack of quality gig worker data gives an incomplete picture of the American workforce.

Groshen said official government data on the work situations of gig economy participants would benefit lawyers seeking to regulate the industry.

“We all need that information to guide our investments, to guide our career choices, for our policy makers to make good policy decisions. It all depends on the data, and we’re short-changing ourselves on that,” said Groshen. “We could do that much better.”

Recently, local governments have tried to strengthen protections for platform gig workers. In June, New York City announced a minimum wage of $17.96 for food delivery app workers. DoorDash, Grubhub and Uber sued the city, saying the law would harm customers and delivery workers. Earlier this month, a judge temporarily halted enforcement of the law. In 2020, California passed Prop 22, which allows travel and delivery drivers to be treated as independent contractors with several additional benefits, including a minimum earnings guarantee.

The lack of quality data also affects the broader economy in another way: It prevents the Federal Reserve from getting a complete picture of the American workforce. The Fed’s two main goals in setting monetary policy are price stability and stable maximum employment, and a lack of reliable information on the gig economy workforce could be holding the central bank back, said Groshen, who has been a member of the Federal Reserve System for 27 years.

“They rely heavily on the official statistics and anything else they can gather to help them get a complete picture of economic conditions, and therefore data. may not be very timely or very detailed which means they are flying a little more blind than they want to be,” she said. “If they’re not engaging in all kinds of work, they’re not getting the whole picture.”

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