So, there’s a problem in our economic model right now that nobody seems to be aware of. And that problem is freelance, casual, and temporary employment.
Freelance is like a writer for most websites. They’re paid per-article (some websites pay fair wages, some don’t) but there is no job protection and employers aren’t required to provide any sort of benefits to them.
Casual employment is the jobs that come from apps. Think Uber, Lyft, DoorDash, or Wag (among the millions of others) and even websites such as Fiverr. These technically allow people to work “whenever they want”, but in reality, aside from the ride-share apps, you’re forced to work around other people’s schedules. Again, wages usually aren’t per-hour, they’re per-task or from bonuses.
Temporary is like Christmas jobs in retail and summer jobs at resorts. They last from 1-3 months and then they won’t exist again until the next year.
So, here’s the problem – Yes, the number of jobs in America is increasing, but a lot of those job numbers come from freelance, casual, and temporary employment.
This creates four massive problems:
The first is that while technically “a job” was created, there’s no guarantee as to how many hours a week these people can work, nor is there any guarantee as to how much money they can make even while they are working.
In the case of freelancers, someone can have a freelance contract with Forbes or a similar site, but that doesn’t mean they’re guaranteed an article everyday. And some sites pay as little as $15 per article. Imagine you spend an entire morning working on an article to wind up with $15. Even if you churned out four articles a day, that’s a before-tax take-home of just $60.
The same goes for casual and temporary. Your Christmas season job at Target probably won’t give you 40 hours a week, and and just how many hours a day do you think you’ll be spending walking people’s dogs on Wag?
This brings us to the second problem. Because these three types of jobs are so sporadic and unpredictable, many people are forced to take on multiple. For example, it’s extremely common for drivers to be registered with both Uber and Lyft. It’s also extremely common for freelancer writers to have freelance contracts with up to five different companies in order to be able to make as much money as possible. it’s also common for people in restaurants and retail to hold multiple jobs.
This looks great on paper. For every ride-share driver, two jobs have been created – One with Uber and one with Lyft. For every freelance writer who’s balancing five gigs, technically speaking, five jobs have been created.
But as is obvious, you can’t drive for Uber while simultaneously driving for Lyft. Similarly, if a freelancer is writing for Forbes one morning, they can’t also be simultaneously writing for another company too. People can only take on one job at a time. This means that while the freelancer has created five jobs, in reality, only one of those jobs is being actively worked at any given time. This is a problem because it’s massively altering our unemployment numbers.
Despite what conservatives think, nobody likes to be unemployed. When asked, Americans will gladly say they’re employed… even if that employment is nothing more than causal employment on an app, where they might only be working 15 hours per week. So while it seems like America is having this massive economic boom, it’s a facade for the reality, which is that a lot of the employment being created is fragile, falsified, and underpaid.
Which leads us to the third problem. This kind of employment is extremely fragile and holds absolutely no security and no benefits of any kind. The biggest threat is the looming recession ahead. When people start losing jobs, they (obviously) start losing money too. And the first thing to go will be the unneeded luxuries. Paying a stranger to walk your dog through Wag, for example, will not be the highest priority on people’s minds when they’re looking to save money. Similarly, paying that person on TaskRabbit (another popular job app) to plant your flowers will also become one of the first things people cut out of their budget.
The less money there is to go around, the less demand app-employment will have. The same goes for restaurants and retail. During recessions, people cook more and buy less clothing. A lot of the jobs we’re currently creating can only be sustained in a good economy.
The fourth problem will make everything even worse. As more people become unemployed, more people will desperately try to find easy work through the apps and in unskilled labor like restaurants and retail. I remember growing up in Ohio during the last recession and waiting tables at a diner around grown adults with master’s degrees.
The same will happen for app employment. As people lose their stable jobs, they’ll seek employment on the apps until they can find another job. So, as demand decreases, supply will increase, only cannibalizing on people’s attempts at scoring work.
The same will happen to freelance roles. During the last recession, we saw many staff positions be phased out, with companies opting instead for freelancers who don’t need to be paid as much and who don’t need to be given benefits. Freelance work almost always occurs at a lower pay rate than staff positions, causing even more people’s wages to be lowered. An even bigger problem is that many companies never rebounded after the recession. Many staff jobs never returned, and companies, always looking to save a buck, decided to continue using freelance work over staff positions.
The question is, what to do about the precarious situation we’re in? How do we fix a problem that hasn’t even been addressed yet? How do we keep an economy built on fragile employment from toppling over like a Jenga tower? And most importantly, what will we do during the next economic downturn to prevent it from completely collapsing?