The gig economy.  Solopreneurship.

According to the newspapers and magazines, this is a flourishing sector of the economy.  (Please note that they define flourishing as lots of  folks involved- not that those so involved have amassed significant profits.)

There’s that report from Harvard (Lawrence Katz) and Princeton (Alan Krueger) profs (for the National Bureau of Economic Review) back in 2016 on “alternative work arrangements” (that means independent contractors, temps, and on-call workers).  They stated this segment of workers rose from 10.7% to 15.8%  of all those employed by the end of 2015.

Upwork  commissioned  a study on freelancing in 2017, performed by the Edelman Intelligence Group.  The researchers found that more than 1/3 of the workforce (36%) were so involved.

 

And then we have the US Government.  According to their data, this sector of the economy is diminishing, dropping from 7.4% in 2005 to about 6.9% of those employed last year.  (The government also announced that 5.9% of workers are employed in contingent jobs- and a contingent worker means they can be axed at any time.  Oh, yeah- most of the folks so “employed” are Black and/or Hispanic, another symptom of the growing racism I discussed  last week.)

 

So, who do you believe?  Is it possible that all of these research results may be correct?

There actually is a simple explanation that can close the loop.  The government used traditional thinking when it measured the gig economy.  And, that sort of thinking missed the trees AND the forest.   The government doesn’t count those folks who are subcontractors to existing businesses or the solopreneurs who also have full-time jobs (or more than 28 hours a week) as part of the gig economy.

Consider the defining question the Bureau of Labor Statistics asked:  What is your primary job?  Which means that if Frank works for BoringAsHeck, Inc. for 40 hours and then sells sports equipment on eBay and Amazon for 18 hours a week, he is considered to be a full-time employee when analyzed by the government.   Or, if Rose is a secretary for Dewey, Cheatem, and Howe for forty hours, but drives for Lyft for another 20, she, too, is a full-time (not gig) employee.  And, there’s Hiram, who is a subcontractor for a government contractor (aka, a Beltway Bandit), and is paid as an independent contractor.  But, since Hiram. Is under contract to Beltway Bandit, he, too, is not considered to be a gig employee.

Moreover, many truck drivers no longer “work” for trucking firms, cab drivers rent their cabs from taxi firms, and then there’s Uber and Lyft- which would explain why there has been a 50% increase in independent contracting within the transportation sector.

There’s also the fact that folks over 55 are now working as consultants (even though they are ‘retired’)- which explains why most of the “independent contractors’ (10.6 million folks) the government measured are men and over the age of 55.

This entire discussion reminds me what my first ChemE professor  (Dr. J.J. Conti) taught us.  That every analysis requires one to define the basis and assumptions.  Otherwise, no one can truly understand the situation.