The Romance and Reality of the Gig Economy 
Things They Forgot To Tell Me In Business School

Much is being said about this big new thing, the “gig economy”. To proponents, the gig economy represents the future, the positive evolution of work. In the gig economy, those purchasing and those supplying services interact in a series of temporary, transactional work engagements configured as a classical win-win. It liberates the provider of services, the worker (aka contingent worker, independent contractor, freelancer, temp, etc.) from the tyranny of fixed hours, set locations, and established routines, allowing them to balance their work-life worlds and take full ownership of their professional lives. For the purchaser of said services, the employer, it liberates them from the cost, complexity, and uncertainty of fixed employee costs. Vastly fewer worker drones, everyone their own boss, the gig economy liberates all sides from commitment and encumbrance.  

And let me be the millionth person to say the gig economy is exciting and full of possibilities… for a small group of skilled professionals. Gig economics, for example, has paid for the time to write this article, something for which I am extremely grateful. The gig economy can work for younger and older professionals with controlled overheads, for second income earners, and for in-demand experts who can afford to trade a portion of their income, and all of their income security, for the flexibility that comes with being a sole practitioner. Gig reflects an era where we are exhorted daily to be our own brand, to find our passion, to take agency over our own narrative, to live the stories we want told, etc.

Unfortunately, with economics as with fashion, and what looks great on the most handsome 5% of the population does not always look so good on the many others emulating the style. Most people simply don’t have the leverage to command incomes allowing for intermittent work, or the sang froid to live with the ongoing financial and existential uncertainty. But they do have the realities of health insurance, mortgages, student debt, school expenses, retirement savings, and the rest of the infrastructure of a complex modern life that requires visibility and predictability along with time-frames far greater than 3 months, much less 3 days or 3 hours.

While oft acclaimed as a most modern innovation, there is nothing really new about gig and in many ways it represents a reversion to pre-factory models of engagement through the piece-rate system, seasonal and day-labor, etc. The extraordinary growth of the gig economy comes as the flip side of the decline in the number of permanent jobs in the economy, itself part of an underlying economic restructuring coincident with the growth of the knowledge and service sectors and the technology to support it. It can also be seen as the result of the fraying of the social-democratic economic model and ideology coming out of the West since World War Two. Only a few of us have jumped voluntarily into being independent operators, most are pushed through job loss and then make the best of it. 

The great gift of social democracies has been their belief in mixed merit, seniority, and membership-based systems with large and stable middle classes at their core. This middle class is the primary vehicle for creating any degree of homeostasis in society. And to have a middle there must be ends, thus the social democratic dream includes a tolerance for an upper class and an acceptance of a lower class to provide balance – but to lose the middle is to lose the system. 

People are excited and convinced that today is different because we have a far larger base of mobile, well-educated, well-heeled, middle-class participants in an economy increasingly driven by knowledge, as portable and renewable an asset as there is. This is true and will serve to delay and possibly mitigate outcomes for many, but what observers often fail to account for is that this structural economic shift, of which gig is one example, enhances the asymmetry of worker/employer terms of trade in favor of the employer, to the detriment of all but the few. At the societal level there will only be so much room on a narrowed middle-class platform, thus many in the middle today will slowly lose position due not to a decline in their absolute capabilities but to forces beyond their individual control. 

As for a society shorn of commitments and encumbrances, as anyone who has tried to bake gluten-free bread will attest to, it is the sticky stuff, the gluten, that makes the loaf not the singular grains of flour. Similarly, it is the commitments and encumbrances in a modern society such as consistent employment, health insurance, etc., that make for an entity greater than a simple collection of individuals. 

So, let us acknowledge the gig economy as we must, benefit from it if we can, but remember that while it is a great emancipation for some, for modern “post-industrial” societies as a whole it represents a challenging structural adjustment that is decreasing the leverage of the worker and accelerating the hollowing out of the middle class, none of which bodes well for long-term stability and the overall health of the collective.