The [not so] new gig economy

I’ve been thinking about the gig economy a lot lately—a workforce comprised of freelancers, contractors and those engaged in on-demand work opportunities, thanks in large part to changing technology and the decline of traditional, full-time jobs.

I’ve been thinking about the gig economy a lot lately—a workforce comprised of freelancers, contractors and those engaged in on-demand work opportunities, thanks in large part to changing technology and the decline of traditional, full-time jobs. Part of my interest lies in the fact that companies such as Uber, the ride-on-demand startup, and others that offer supply-meets-demand opportunities have come under fire for avoiding labor regulations. By classifying workers as independent contractors, rather than as employees, the companies thereby escape paying workers’ taxes and contributing to other benefits, and for some, this eliminates the construct of minimum wage.

The result? Fast Company’s headline about sums it up: “The gig economy won’t last because it’s being sued to death.” California’s Labor Commission already has ruled one Uber driver an employee in June. Class action lawsuits and strikes have been happening around the country, with billions on the line should these gig providers be forced to reclassify all workers as employees, and start footing the bill. Meanwhile, it seems even the most successful on-demanders could be a few (unpaid) sick days away from the financial danger zone.

But then I think about the 1.85 million students* who have graduated or will graduate this year, flooding a workforce landscape that is very much in transition. Many of these grads likely already are acquainted with the gig economy. Some will have set up an Etsy shop for selling handmade goods, or have worked for an on-demand service such as Uber or TaskRabbit, and those with marketable skills out of the box—designers, programmers, writers and their ilk—can seek projects on dozens of creative and tech freelance networks such as Upwork (formerly Elance), Outsource or 99Designs. Accurately quantifying the percentage of the workforce that is part of the gig economy has proven difficult, but one thing is clear: The number is trending heartily upward.

It reminds me of a time, nine years ago, when a good friend of mine made the leap. After years at an area ad agency, where we worked together, Brian Brinkman put in his notice. I remember asking him where he was going—to another agency, to work client-side?

No. He was going to work … for himself. And because he was a talented graphic designer, I believed he could do it. But I was still nervous for him. I called him a few days ago to reminisce, and to ask him about taking that leap and the intervening years.

“You start to feel like you’re hitting a ceiling, not getting opportunities to grow and do more things. I thought then, ‘Hey, can I do this same thing on my own, and have more freedom for my family,” he explained to me.

Nine years ago, on-demand startups weren’t even a twinkle in someone’s eye. Brinkman’s skill set and the connections he had made softened the soil for getting work, and he admits that he couldn’t do what he’s doing today without his experience at a series of agencies prior to going out on his own, including the one he left. And much like other on-demand workers, he has had to navigate the world of insurance for a family of four, not to mention the stress of inconsistent work, or perhaps more accurately, inconsistent payment for his work. But the most difficult thing, by far, is saving for the future.

“It’s a nightmare, 401k. Our normal bills are due, and I’ve got a huge project underway, but I don’t get paid for a month or two, and it throws off our timing. I try to look at our life expenses as my business overhead, but the future is the number two thing I worry about, because it’s difficult to save.”

But there are many things to love about working in the on-demand and project-based economy.

“I’m in complete control of my 24 hours, every day. My kids get home at four? I can go down and spend half an hour with them. Then go back to work.”

Millennials are a natural fit for the gig economy—and they already make up a large portion of it—due to their expectations for a greater work-life balance, a spirit of entrepreneurship and a lack of traditional jobs waiting for them. Forget Uber. A generation of fresh, creative minds working for themselves is bound to lead to great ingenuity, no? Perhaps, but at what level of anxiety?

When I asked Brian about sites such as Upwork, he said the marketplace for jobs is flooded, globally, and that competition has driven the project rates down to a dismal level. Even if you do get a job at a fair rate, it’s tough to gain traction in building relationships with the client. So every new gig means starting all over, the very definition of diminishing returns. He reiterates that much of his current work still comes from past connections and new ones he has forged from recommendations. And when asked if he’d return to a traditional gig?

“I think about that. Not for the security as much as the team environment. I like working as a team.”

So, if connections are still the currency, how will recent college grads survive reporting to the anonymity of marketplaces as virtual unknowns? What is the fate of the not-so-new gig economy? I’m certain we will be hearing more about it from our stable of presidential hopefuls as we approach 2016.