Gig Workers, Social Stratification, and the New Under Class
Recent weeks have been tumultuous for everyone, but no one has suffered more than the ubiquitous gig worker. A growing, vulnerable segment of society, gig workers are now being pulled in multiple directions — from Shipt shoppers to Uber drivers, a balance is being struck between personal health and the ability to earn.
The Grim Reality of Gig Work
Freedom. Control. At inception, the gig economy was touted as a new, disruptive method of labor — a peer-to-peer service that put people in charge of their own income. No bosses. No schedule. Just work.
Since then, it has effectively functioned as a direct wealth transfer from the most economically vulnerable individuals to big corporations. Gig work marketplaces have been rife with controversy over the last few years:
- Nearly a third of Uber drivers were actually losing money according to a study by MIT. Through gig work, a company is able to offload its overhead to the gig worker. The gig worker has to maintain their own car, gas, and other business expenses — and many of them don’t factor this into their revenue stream. (But perhaps that’s not surprising. Uber itself has been hemorrhaging billions.)
- Doordash was found to be “stealing tips” from workers. Obfuscation in the ordering system made it seem as though Doordash was directly transferring customer tips to workers, when some of it was instead being used to subsidize the “Doordash” fee. Instacart operated similarly.
- AirBNB hosts frequently reported an inability to get compensated for damages. Since AirBNB is a marketplace that connects hosts to guests, there is a gray area regarding what it is ultimately responsible for in terms of damage. Gig workers bear most of the responsibility and risk under the gig economy.
Of course, gig work isn’t just the likes of Uber, DoorDash, and AirBNB. Freelance workers (such as artists) are also considered to be gig workers. Nannies and housekeepers are considered to be gig workers. In some capacity, gig work has always existed.
But gig work has recently taken off because of these marketplaces: 55 million people in the United States are currently considered “gig workers.” And that has created an under class within our society of exceptionally vulnerable individuals without the traditional protections of employment.
Gig workers are essentially their own bosses. They have their own business and business expenses. They pay their own taxes and their own overhead. But when they work through marketplaces like Shipt or Instacart, they have none of the traditional protections of owning their own business. They can’t find their own clients: They rely upon apps. They can’t change their marketing strategies, products, or services. They are completely beholden to the service they work for.
This has never been more apparent than now.
The False Promise of the Gig Economy
For employers, hiring gig workers and independent contractors makes sense. Employers are able to get their work done without having to establish a costly employee-employer relationship. They don’t need to pay taxes or overhead. They don’t have to manage anyone. They can hire on a project-by-project basis, and once it’s over, they have no responsibilities at all.
For gig work marketplaces like Uber, Lyft, DoorDash, and GrubHub, their entire business model lies in connecting people to people, letting one perform a service for another, and taking a piece off the top. Their product isn’t just the service: Their product is the people that work for them. For customers, this is fantastic. Anything that you want done is now at your fingertips.
But there’s always been a dark side. Edison Research found that:
- Over half of the gig workers 18 to 34 performed gig work as their primary method of income.
- 80 percent of gig workers for whom gig work was their primary source of income said they’d find it difficult to pay an unexpected expense of $1,000.
- 51 percent of gig workers stated that they worked harder at their gig work than they would at conventional jobs.
It goes without saying: People, in general, haven’t been choosing gig work because it is an ideal situation. People have been choosing gig work because it is the only option. Stay-at-home parents who need to have flexible schedules. People who are not considered to be traditionally employable. These are already economically disadvantaged individuals — and they have been suffering more financially than the average person.
Gig workers are not eligible for traditional unemployment. They don’t get overtime. They don’t have an enforced minimum wage. If their account is canceled, they have little recourse. They have no control over their income; in fact, their income is often determined by star ratings that are given by customers, and that can quickly be tanked by a single unhappy, unpleasant individual.
When gig work is done part-time or as a hobby, that’s less of an issue. When it’s a primary source of income, it becomes a tremendous issue.
Symptomatic of a Greater Problem
It’s not as though the “problem of gig work” has gone unnoticed. California has taken action to redefine employee-employer relationships such that many gig workers are no longer classified as such. This redefinition means that many companies that have been previously hiring gig workers or independent contractors would need to extend the same benefits to them as they would employees.
Surprisingly, few people have been as against this as the gig workers themselves.
If a situation is sub-optimal, and people are still choosing to put themselves in that situation, it’s because there is a reason for it. Even if many gig workers might make under minimum wage, they are doing so because they don’t have any other options.
This is the under class that is emerging: People who are forced into gig work because there simply aren’t any viable alternatives. There aren’t any jobs that will take them. There is no labor suitable to them. And once they become reliant on gig work for their primary source of income, it also becomes spectacularly difficult to get out — now they have a gap in their resume, and potentially even a loan for a car.
Health and Safety for the Gig Worker
At this point in time, gig workers are more vulnerable than ever, not only economically but also due to the rapidly spreading health concerns. Uber drivers continue driving by sanitizing their vehicles in between guests — with only a one-time payment for sanitizing materials to help them. Instacart employees have been warned that they may have been exposed to COVID-19 in grocery stores, via text message.
Yet, they must continue to work under these circumstances often because it is the primary income of their household — sometimes their only income. Once again, they lack the protections of an employee, yet have the expectations of one.
This isn’t the first time that gig workers have been subject to these types of concerns. Uber reported 3,045 sexual assaults during 2018, and 6,000 total from 2018 through 2019. Food delivery workers have been struck and killed by cars. Gig workers take their safety into their own hands in this largely unregulated market.
But even as the gig work economy “erodes,” it grows stronger for the same reasons that it became popular to begin with: People need it now more than ever. People have been laid off from their traditional jobs. Work is in short supply. Meanwhile, Instacart is attempting to hire half a million new workers. It is more likely, not less likely, that people will be forced to work as independent contractors during a recession.
What remains to be seen is whether this might be a wake-up call to a disenfranchised class that needs access to benefits. The only way the gig economy can continue without leaving a large portion of the population vulnerable is to ensure that this population can tap into benefits that are similar to those with traditional employment.
Companies themselves are unlikely to deliver these benefits on their own — many of them are operating on razor thin margins as it is, or (in the case of Uber) actively losing incredible amounts of money. It may be up to individual states and the federal government to create a system of benefits for this quickly emerging class.
