Peter Cappelli: What should we learn from the gig hype?

Last year, I wrote a column about the release of the Bureau of Labor Statistics 2017 Contingent Worker Survey, which found that the percentage of Americans who met the definition of the new “gig” term—non-employees working either as contractors (Uber drivers) or via contract firms (“leased” workers)—had actually declined since 2005.

This past week, a prominent story in the New York Times reviewed the results of newer data, including income-tax returns reporting independent-contractor income and other sources. They concluded that the gig claims were overblown: Relatively few individuals work as independent contractors, especially on electronic platforms like Uber. Those who do earn relatively little from it: Less than half earned more than $2,500. More people earned money from selling on eBay or other sources than working on electronic platforms. There is no evidence that it replaced regular employment in any significant degree.

The punchline of these studies is that even those people who perform gig work do so only in a marginal way, and they typically do so on the side while maintaining regular jobs. The early interest in gig work appears to have been driven by the soft labor market following the 2009 recession. People took that work because they lost their jobs, because they couldn’t get full-time work or because they just were trying to make a little more money on the side. As soon as they could get regular work or more overtime hours, they dropped the gig work. Gig work, it turns out, has more in common with yard sales than regular employment.

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In other words, it wasn’t the case that people really wanted gig jobs: This is not how “millennials” want to work—or anyone else, for that matter. It may be how at least some employers wanted work to be organized, but it has not played out that way.

This doesn’t mean that these electronic platforms are going away. In the case of the best-known ones, Uber and Lyft, these are more than platforms, they are companies selling services, hence the current debate as to whether their drivers are really employees. The “pure” platforms that link buyers/clients and sellers/workers directly have been around since the 1990s. For certain types of standardized project work, they provide a good way to share information about opportunities and will continue to do so, but those tasks remain relatively rare in the overall economy.

What do we make now of all the consulting reports and pundits that claimed that work as we know it was changing, that we were moving toward more and more gig work, that the increase was inevitable and that as much as one-third of contemporary work was already “gig”? How could so many reports be so consistently wrong?

A common theme among these reports and claims was that there was rarely, if ever, any evidence behind them. It was sometimes just an argument that sounded smart and other times just a claim. If you look back on these reports, what is striking about them is not just that they were wrong but that they were almost all wrong in exactly the same way, in that they all made almost the same claims. The reason for that seems to be that these were not really separate, reasoned interpretations of where work was going. It is more accurate to say that they just repeated claims that had already been made, and once enough others had made them, well then, it was gospel. The only way a new report could get attention is to make even more extreme predictions, and then we are off to the exaggeration races.

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The reason these claims have been so wrong is principally because they were not constructed in a serious way—or, to put it more bluntly, they were not necessarily interested in being right. They were not assessing the evidence, reading what had been written already about alternative work or considering the plusses and minuses of these platforms. They were promoting an idea that something new was happening that needed to be addressed now. The point of these reports and claims was not so much to predict the future accurately as it was to get attention—and get it now. The media want to report what is new: There is no story around “not much happening here.” The claims keep coming because they work, they do get attention and the wilder the better.

A lot of organizations wasted a lot of time and money gearing up for the “inevitable” gig economy, just as they did getting ready for the predicted labor shortage in the early 2000s that never came or virtually every other assertion about the labor force and the labor market this century. I suspect the reason we keep falling for these claims is because no one wants to be the one waiting to see how things play out when everyone else has taken the bait. Maybe we are more comfortable being wrong with everyone else than being right by ourselves.

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