What Labor Means in Today’s Gig Economy

Labor Day seems like a foreign concept.

That’s not to say that I’m unfamiliar with the art of drinking beer while balancing a plate of barbeque as sweat gets in my eyes during the last days of summer. That one I’ve got covered.

I’m referring to the idea of the labor we’re supposed to honor today, at least as I see it in my mind’s eye.

In my head, labor refers to a bunch of people that punch in at a factory or coal mine, put in a long day of work, punch out, and go home. Probably carrying metal lunch pails. Definitely having a cold one when the day is done.

It’s the stuff of posters from the 1930s about the Civilian Conservation Corps and the Works Progress Administration (the post office offers commemorative stamps like this… kind of cool).

For the most part, those days are long gone. Fewer than 10% of Americans work in manufacturing, or what we typically think of as “labor.”

The biggest growth industry for employment since the financial crisis has been hospitality, which is a nice way of saying wait staff and bartenders.

In the age of microbreweries, we’ve put millions of people to work asking, “Would you like a hearty, hoppy India Pale Ale that was locally brewed on the western shore of the Mississippi River by brothers who named their company after the local high school sports team?” The taste seems immaterial. It’s all about the label.

I’m not knocking these jobs, but they don’t have quite the same ring as someone who can say, “I build cars.”

Yet it’s where we are.

For decades we’ve transitioned from a world where most people work with physical things to a world where most people provide a service. The best example is the explosion of the gig economy.

I’m old enough to think of a gig as a contract to provide musical entertainment. Performers play gigs. Workers work. Not anymore.

My kids think of gigs as any short-term assignment. No strings, no benefits. Consulting firm McKinsey estimates 68 million people, or roughly 43% of Americans in the workforce, do such freelance work.

Workers who choose to perform work on their terms are happier, we’re told. But 20 million of these folks don’t want to be in such jobs. They do it because they can’t find better paying work elsewhere.

My barber drives for Uber on the weekends. And some weeknights. He’s glad for the chance to earn extra income. Investors have rewarded the company with a $50 billion-plus valuation. I wonder how much of that $50 billion will flow to Uber drivers. Obviously that’s rhetorical. None of it will. Unless they happen to be wealthy angel investors who purchased shares in a private offering and now drive for the company for kicks.

I’m not trying to knock Uber. Or TaskRabbit. Or any other company that facilitates gig work. I’m just noting that the premise makes no sense.

We’re moving toward a world where people are told to celebrate their freedom as mini-entrepreneurs, when the reality is the opposite. It’s true that workers can choose to provide services for such companies, and they aren’t required to take the jobs. But the notion that they could compete with them for business as sole proprietorships is laughable. Employees are free to take the work on the terms provided… or not. And often people choose the work because their primary positions or other opportunities don’t provide enough income.

That’s the labor I see around me today. It’s called the side hustle (really). Everyone seems to be looking for that different income stream that will finally give them enough income, or at least enough stability, to feel secure.

It doesn’t look like a guy with a rivet gun or a sledgehammer. It looks like a woman eating dinner in her car as she travels between her daytime teaching job and her evening appointment for tutoring. It looks like the dental hygienist that also sells real estate, or the construction worker who tends bar on the weekends.

These are the faces of labor. And, chances are, we’ll see many of them today, Labor Day. They won’t be celebrating. They’ll be providing services. They will be showing houses, serving drinks, and even hauling many of us home after we’ve had a few.

So here’s to celebrating those among us that are working harder, and longer, in an economy that seems bent on providing less of some of the things we desire, like security and stability. May they also have the opportunity to rest on this Labor Day, and have a cold one when the day is done.

Thanks,

Rodney Johnson
Follow me on Twitter @RJHSDent

P.S. Are you one of the members of the “gig economy” working on Labor Day? Or are you enjoying a full day off?

Shoot me an email at economyandmarkets@dentresearch.com.

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Categories: Economy

About Author

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He holds degrees from Georgetown University and Southern Methodist University.