Llwelleyn King: Good reasons to venerate the gig economy
Professional dog walker
WEST WARWICK, R.I.
Napoleon didn’t deride the English as “a nation of shopkeepers,” although that phrase is commonly attributed to him. In fact, it was Bertrand Barère de Vieuzac, a French revolutionary who used it when attacking the achievements of British Prime Minister William Pitt, the Younger.
I think that Napoleon was too smart not to have realized that a nation of shopkeepers is a strong nation, and that if the English of the time were indeed a nation of shopkeepers, they would constitute a more formidable enemy.
A nation of shopkeepers, to my mind, is an ideal: self-motivated people who know the value of work, money and enterprise; and who are almost by definition individualists. So, I regret the constant threats to small business coming from chains, economies of scale, high rents and some social stigma.
But mostly I regret that in our education system, self-employment isn’t celebrated and venerated as being equivalent to work at larger enterprises. We define too many by where they work, not by what they do.
I have always believed that one should aspire to work for oneself, to eschew the temptations of the big, enveloping corporation and to strike out with whatever skills one has to test them in the market and to have the customer, not the boss, tell you what to do.
Our education system produces people tailored to be employed, not self-employed.
But things are changing. The gig economy was well underway before the COVID-19 pandemic hit, and now it is roaring. Many employees found that the servitude of conventional employment wasn’t for them.
The gig world differs from the small business world that I have described in that it is small business refined to its absolute core: a one-person business, true self-employment.
There are many advantages in self-employment for society and for the larger business world. Hiring a self-employed contractor is easier for a company, not having to create a staff position and pay all the costs that go with it. Laying off a contractor isn’t as traumatic. The worker is more respected, and is asked to do things not commanded. The system gains efficiency.
But if employers come to see the gig economy as just cheap, dispensable labor, then the gig economy has failed.
The gig worker shouldn’t expect security but should be treated in a business-to-business environment. He or she needs to know how to drive a bargain and to have the moral courage to ask for a contract that is fair and recognizes the value that is intrinsic in the gig relationship.
I am a fan of Lyft and Uber. They offer self-employment to anyone with a driver’s license and a car — and the companies will even get you into a car. But the bargain is one-sided. The driver has the freedom to work what hours he or she chooses but not to negotiate the terms of their engagement. That is decided by a computer in San Francisco.
This gig worker can’t hope to hire other drivers and start a small business: It doesn’t pass the gig contract concept. I have talked to many ride-share drivers. They revel in the freedom but not the income.
Gig workers can be, well, anything from a plumber to a computer programmer, from a dog walker to an actuary.
But for the free new world of gig working to become part of our business fabric, the social structure needs to be adjusted by the government to allow for the gig worker to enroll in Social Security and to charge expenses against taxes as would an incorporated business. Jane Doe, who makes a living designing websites, needs to know that she is a business, not just freelancing between jobs.
A friend who has been self-employed for many years told me recently that he was being considered for a big staff job. I told him to be mindful that he will be trading away some dignity and a lot of freedom. It is hard to get into a harness when you have been running free.
I hope we get many more workers running free. Napoleon would have understood.
On Twitter: @llewellynking2
Llewellyn King is executive producer and host of White House Chronicle, on PBS. He’s based in Rhode Island and Washington, D.C., and his email is llewellynking1@gmail.com
White House Chronicle
Llewellyn King: To revive America, fix the gig economy and bring back the WPA
McCoy Stadium, in Pawtucket, R.I., was a WPA project….
…and so was this field House and pump station in Scituate, Mass.
The assumption is that we’ll return to work when COVID-19 is contained, or we have adequate vaccines to deal with it.
That assumption is wrong. For many millions, maybe tens of millions, there will be no work to return to.
At root is a belief that the United States -- and much of the world -- will spring back as it did after the 2008 recession: battered but intact.
Fact is, we won’t. Many of today’s jobs won’t exist anymore. Many small businesses will simply, as the old phrase says, go to the wall. And large ones will be forced to downsize, abandoning marginal endeavors.
When we think of small businesses, we think of franchised shops or restaurants and manufacturers that sell through giants like Amazon and Walmart. But the shrinkage certainly goes further and deeper.
Retailing across the board is in trouble, from the big-box chains to the mom-and-pop clothing stores. The big retailers were reeling well before the coronavirus crisis. Neiman Marcus, an iconic luxury retailer, has filed for bankruptcy. All are hurt, some so much so – especially malls -- that they may be looking to a bleak future.
The supply chain will drive some companies out of business. Small manufacturers may find that their raw material suppliers are no longer there or that the supply chain has collapsed – for example, the clothing manufacturer who can’t get cloth from Italy, dye from Japan or fastenings from China. Over the years, supply chains have become notoriously tight as efficiency has become a business byword.
Some will adapt, some won’t be able to do so. A record 26.5 million Americans have sought unemployment benefits over the past five weeks. Official unemployment numbers have always been on the low side as there’s no way of counting those who’ve given up, those who work in the gray economy, and those who for other reasons, like fear of officialdom or lack of computer skills, haven’t applied for unemployment benefits.
To deal with this situation the government will have to be nimble and imaginative. The idea that the economy will bounce back in a classic V-shape is likely to prove illusory.
The natural response will be for more government handouts. But that won’t solve the systemic problem and will introduce a problem of its own: The dole will build up dependence.
I see two solutions, both of which will require political imagination and fortitude. First, boost the gig economy (contract and casual work) and provide gig workers with the basic structure that formal workers enjoy: Social Security, collective health insurance, unemployment insurance and workers’ compensation. The gig worker, whether cutting lawns, creating Web sites, or driving for a ride-sharing company, should be brought into the established employment fold; they’re employed but differently.
Second, a new Works Progress Administration (WPA) should be created using government and private funding and concentrating on the infrastructure. The WPA, created by President Franklin D. Roosevelt in 1935, ended up employing 8.5 million Americans, out of a total population of 127.3 million, in projects ranging from mural painting to bridge building. Its impact for good was enormous. It fed the hungry with dignity, not the soup kitchen and bread line, and gave America a gift that has kept on giving to this day.
Jarrod Hazelton, a Rhode Island-based economist who’s researched the WPA, says the agency gave us 280,000 miles of repaired roads, almost 30,000 new and repaired bridges, 600 new airports, thousands of new schools, innumerable arts programs, and 24 million planted trees. It also enabled workers to acquire skills and escape the dead-end jobs they’d lost. It was one of the most successful public-private programs in all of history.
As the sea levels rise and the climate deteriorates, we’ll need a WPA, tied in with the Army Corps of Engineers, to help the nation flourish in the decades of challenge ahead. The original was created by FDR with a simple executive order.
Llewellyn King is executive producer and host of White House Chronicle, on PBS. His e-mail address is llewellynking1@gmail.com and he’s based in Rhode Island and Washington, D.C.
Llewellyn King: The gig economy -- by turns liberating and exploitive
An Uber driver at work.
You might not know this, but if it has not happened yet, you may be about to become a company of one.
Welcome to the gig (as in a musician doing a gig) economy. It is coming and faster than anyone expected. In fact, it is coming so fast that in 2050 more people will be in gig employment than conventional employment, according to Wired magazine.
I want to stand on my chair and utter three cheers for it. Except I can only muster two cheers.
In the gig economy workers become consultants, contractors, freelancers.
From the worker point of view, it is an end to conventional bosses, burdensome hours and fitting into a corporate culture.
For the firm outsourcing what used to be salary work, it is a freedom from the costs of employing, like healthcare and retirement plans, safety rules and regulations.
The poster example of gig employment is Uber. Let me say, parenthetically, that I love Uber in almost all ways: the convenience, the ride tracking, the clean cars and polite drivers.
Also, I love the idea that the personal automobile, a large capital investment for most, can be put to work.
It works almost as well for the owner of other capital-intense possessions, notably apartments and boats. Get a little back on your sunk investment. What could be better?
Not much, but there are problems. Primarily, the architecture of our society is not ready for the shift from corporate to private, from big to very small.
At the heart of this stage of the gig economy is the Internet and its ability to bring the willing buyer, renter, seller and worker together.
Companies that have understood these uses of the Internet have gone for the capital-intensive goods: boats, cars and homes. But at the low end, freelance workers are hooking up with customers who are seeking pure service plays like car detailing, dog walking, home computer assistance, house cleaning and repairs of all kinds.
Most of this should only worry the tax man. If you work for one of the ride-sharing services, like Uber or Lyft, the taxman knows all about you.
But if you are in a less-dragooned environment, tax collection halts. Do you withhold taxes from your house cleaner, for example?
One can understand why ride-sharing is beating the daylights out of the taxi business, and so what? Well, the problem is to use ride-sharing you need a credit card and a cell phone. The very poor, or those in temporary difficulties, do not have these. They need taxis.
The law has not caught up with new realities.
The promise of the gig economy is every worker is a contractor protected by a contract. The reality, as with the ride-sharing services, is that the internet company becomes an employer in all but name. The worker has given up the security of a job for the insecurity of entering into a contract he did not write and cannot amend. In weak economic times, the worker is vulnerable to a global system of serfdom.
It is easy to single out Uber, which has greatly improved the quality of life for passengers, and the usage of under-used assets. But what of the drivers? There are laws that govern the old workplace with wage-and-hour standards, workers’ compensation and conditions monitored by the Occupational Health and Safety Administration.
If you are semi-self-employed, say as a delivery contractor, the Internet-facilitating company holds the whip hand when it comes to paying the drivers. Nowhere have I read that drivers really can make a living driving. A little extra, yes. The problem is the independent contractors are not so independent if they just have one customer — and that is not the passenger, but rather some ubiquitous computer network.
The gig economy knows and cares nothing about health care, sick leave, Social Security payments, tax collections, vacations and working conditions. It is free, it is exhilarating and it is the future. But it may be exploitative as well.
Llewellyn King, a veteran publisher, columnist and international business consultant, is host and executive producer of White House Chronicle, on PBS. This first appeared on the opinion site “Inside Sources,’’ where New England Diary overseer Robert Whitcomb also contributes essays.