Chief among the drawbacks are gig work’s lack of health care or other benefits, because U.S. independent contractors, or 1099 workers, receive no workers’ compensation, unemployment benefits, paid vacation, retirement, overtime, disability accommodations, family leave protections, protection from discrimination or sexual harassment, or the right to form unions. The recent U.S. government shutdown called attention to the vulnerabilities of contract work when both professional-level contractors as well as lower-level service contractors felt the pain of missed paychecks with no later compensation in sight.
Indeed, the lack of benefits, insurance coverage, paid time off, or other basic workplace protections can be physically dangerous and leave workers with no income or retirement savings, according to the author of a new book on the topic. The sharing economy promises on-demand workers new opportunities for connection and access, “but the peer-to-peer component of the sharing economy means walking into the home, or vehicle, of a stranger or operating under app-created anonymity, and the inherent dangers those circumstances can involve,” said Alexandrea J. Ravenelle, Ph.D., author of Hustle and Gig: Struggling and Surviving in the Sharing Economy (University of California Press, March 2019, ISBN: 9780520300569).
While addressing mostly the rise of the sharing economy, there is a cautionary note for all types of contract workers to take heed. “Here we are, in the midst of the #MeToo movement, and yet, workers are regularly experiencing unregulated sexual harassment [as just one example of misbehavior they can encounter],” said Dr. Ravenelle, an assistant professor of sociology at Mercy College.
One-third of U.S. adults now do gig work, and the youngest baby boomers — who must work at least nine more years to reach full retirement — have fewer and fewer safety nets at a time when they and, in many cases, their spouses or partners, most need health care coverage and paid benefits.
After all, employers’ classifying workers as independent contractors reduces payroll taxes, including Social Security contributions, workers’ compensation, and health insurance premiums. Misclassifying workers can also lead to issues when workers file for unemployment, delaying or denying their ability to collect on claims.
The Federal Reserve System, which publishes a report on the economic well-being of U.S. households, defines gig work as covering “three types of nontraditional activities: offline service activities, such as child care or house cleaning; offline sales, such as selling items at flea markets or thrift stores; and online services or sales, such as driving using a ride-sharing app or selling items online … Gig work is largely done in addition to a main job, so this is often distinct from those who work as contractors in their main job.”
The Fed found the top reason for doing gig work is for workers to make supplemental income.
The growing need for workers — including professionals — to take on independent contract gigs harkens to the concept of “late capitalism” — characterized by a deep restructuring of work. For example, labor, the essence of which is creation (fabricka, as in to fabricate) is reduced to work. A calling is reduced to a job. Working for a wage displaces pursuing a craft.
Early SWE members grappled with issues surrounding workplace protections and policies.
The Society’s archives show that members debated whether women engineers were better off joining unions or collectively acting as a professional organization as early as August 1957. They debated state laws that, under the guise of professionalizing women engineers’ roles, also restricted their work hours and ability to be promoted.
SWE chose to emphasize professional development and career guidance and recognition.
Yet throughout the 1960s, SWE members and leaders indirectly allied themselves to the women’s movement by publishing insights about laws affecting women in the workplace, disparity in men’s and women’s wage earnings, and other factors affecting women’s status as professional engineers, according to “The Boundaries of Women’s Rights: Professional Aspirations and Collective Action in the Society of Women Engineers, 1946-1980,” a master’s thesis written by SWE’s first archivist, Lauren A. Kata.
That same vigilance remains necessary in today’s gig economy, especially since online contract platforms are filled with personal data and can control workers’ incentives, guarantees, or whether they’ll even stay active in the group, Dr. Ravenelle said. “If you make a decision that you’re going to invest in platform work, if the platform closes or pivots, you’re stuck,” she said.
She cited as an example a chef-on-demand service that offered chefs a “bidding marketplace,” but no benefits, where the chefs could advertise their meals and profiles on the platform. Customers contacted the chefs directly and negotiated bespoke meals. The platform marketed itself as a “back office,” handling the marketing, invoicing, and scheduling. When the service shut down abruptly, chefs who had invested thousands of dollars of their own money in catering equipment and given up opportunities to take full-time jobs were left having to recoup their businesses. They also discovered that the reviews they’d received failed to transfer into ranking algorithms on other gig platforms.
“There was no way to show reviews or ratings of their work,” Dr. Ravenelle said.
Indeed, Dr. Ravenelle is working on her next project, After the Hustle, which examines the impact of high-status gig work and sudden platform closing on gig economy entrepreneurs.
The “Time Rule”
Dr. Ravenelle offers a solution, which she calls the “time rule,” combined with the “pajama policy”: The category of independent contractor would be reserved for people who are largely self-directed. Workers could opt out of employee status and choose to be entrepreneurs by incorporating, which provides liability protection.
“Such an active opt out would allow workers with entrepreneurial inclinations to pursue those interests,” she writes.
Impossible? Not necessarily in a near-full economy, especially one with a huge dependence on, and federal budget spending commitments to technology, military, and space innovations.
As Dr. Ravenelle points out in her book, “economist David Autor explains, ‘It doesn’t mean there’s no money around, but [the money is] just accruing to the owners of capital, to the owners of ideas. And capital is less equitably distributed than labor. Everyone is born with some labor, but not everyone is born with capital. In the gig economy, the workers who are most likely to succeed are those who have social and financial capital.’”
Awareness of these inequities — in addition to the class- and race-based inequalities inherent in this new economy — is key.
Experts say you can also be an advocate for yourself, especially as a highly sought-after professional. The 30 highest-paying jobs of the future, after all, include engineering-centric roles such as construction managers, computer systems analysts, construction trades supervisors, systems software developers, computer and information systems managers, and applications software developers, according to Business Insider’s analysis of the Bureau of Labor Statistics’ Employment Projections program and median annual earnings for each occupation from the Bureau’s Occupational Employment Statistics program.
Here are some experts’ tips:
- Educate yourself and try to negotiate often-overlooked benefits such as a coach, a favorable job title, a private office, child care subsidies, assistance for tuition and commuting costs, and employer-sponsored health care coverage in retirement, both for yourself and your spouse/partner.
- Record every story or anecdote that works, and save it as part of a story portfolio to use in an interview or promotion opportunity. In the same vein, every time you’re able to solve a problem with a complicated answer, save it as a go-to for every following situation that requires it.
- Only 34 percent of women negotiate their job offers, compared with 46 percent of their male peers, according to a February 2018 survey of more than 2,700 workers by staffing firm Robert Half. So do your research, try to negotiate with your boss rather than human resources, and keep the conversation upbeat. You can thank the recruiter or interviewer, while still asking whether it’s possible to negotiate a higher salary or more benefits than you’ve just been offered. If the salary is set in stone, ask whether there’s flexibility to negotiate other aspects of the job.
- Always be willing to look critically at how you are overcoming challenges, and be able to succinctly explain your value to your work team. Don’t forget to help, sponsor, and mentor others as they, too, make their way around unspoken workplace cultural sticking points.