ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Why "Gig Economics" Will Fail

Updated on November 18, 2018
Ewent profile image

Eleanore Ferranti Whitaker is a published author of two suspense genre novels and a short story fiction and non-fiction writer.

The Failure of a Gig Economy

What is a "GIG" Economy?

In order to accurately define "Gig" economy, a trendy word that hides the truth and facts of employment in the US. today, it is necessary to understand that the word "gig" traditionally referred mainly to musicians who were hired for a specific engagement.

When it is applied to labor in the U.S., it really isn't a "gig" so much as a replacement for the word "temp."

So the question to ask is, "Can labor in any country survive ONLY on temps working part-time and cobbling together 3 or 4 "gigs" to earn what a full time job used to pay?

It is certainly true that automation has given rise to loss of jobs. However, automation cannot replace your broken water heater or repair your automobile's transmission. Leaky roof? Call a robot?

You can see why "gig" economics has been manipulated, not for improving the status of labor in the U.S., but to create higher profits for business owners.

Today, employees are hired for shorter periods of time, which means excessive employee turnover. Does that cost employers? No. The reason is that business owners don't hire emplouees. They hire a recruiter who is also an employer who provides temp workers, thereby relieving employers of paying employee benefits and contributing their portion of employer taxes.

Since the rule of thumb in industry has been to cite anyone who works less than 30 hours a week as "part-time," relying on part-time employees hired by a recruiter who pays their wages, business owners no longer have the job of paying wages, benefits or corporate taxes.

You can see already why this cannot last. The more business owners pay less and less taxes and their employees must work multiple "gigs" and pay the lion's share of taxes to the federal and state governments, the closer the economy gets to a serious reduction in financial support that can only come from enforcing business regulations and taxation.

From the corporate sector, there is the whining that businesses pay too much in taxes. Do they? Check again.


Employees and customers pay more than most business owners in taxes out of wages that have been deliberately stagnated using the excuse, "It's a gig economy."

Employers and customers also hand over massive federal tax cuts and cold hard dollars in tax subsidies, often to state and federal governments.

In the U.S., the Government Accountability Office tracks the amount of return each state receives for the federal taxes they pay. It should surprise no one that according to the State University of New York's Rockefeller Institute of Government, "just 13 states subsidize 37 others."

As such, this means that employees in 13 states are earning more and getting a far less return for their wages. They worker harder and are still struggling to keep their heads financially above water.

The Downside to Gig Employment

The downside to "gig economics" is that these recruiter/employers can only earn their incomes through high job applicant turnover. Thus, they hire and as soon as their client's contract for employees run out, they fire job applicants/employees and replace them to increase their commissions and profits.

The hallmark of "gig economics" is "short term" workers In some industries like construction, chemistry and engineering, short term projects are expected. What goes with "gig economics" is this: When multiple jobs are held short term, it almost always means working longer hours for the same wages a full time job once paid.

Longer work hours means less time for personal needs and quality time with families. It also means an increase in the cost of travel to and from jobs, not to mention the loss of time involved.

Another consideration is "job uncertainty." It's easy to explain gigs being plentiful due to the need for increasing jobs during holiday seasons. But, as most individuals know, holidays pass and there is that "down time" in businesses when customer spending drops off until the next big holiday.

Where is the reliability in earnings then?

Today, 57 million Americans work in gigs. This includes multiple job holders and those whose arrangements are short term.

Ref: https://www.forbes.com/sites/tjmccue/2018/08/31/57-million-u-s-workers-are-part-of-the-gig-economy/

Decline in Gig Enthusiasm

When the job market is weak, gigs are plentiful. This is due to employers' need to cut their losses. Is labor the best way for an employer to cut their losses? Most labor expert says "No."

The reason is that when labor is the first item to the cost of overhead, the work of the business remains the same. With fewer workers, the work of the business must then be completed by fewer workers at the same wages paid to the prior full staff.

When employers use cuts to labor as their first reduction in costs, the disruption to their daily business productivity is the first thing to suffer.

Ref: https://hbr.org/2010/05/when-youve-got-to-cut-costs-now

The Most Serious Consideration of the Gig Economy

How stable can an economy be if working longer hours for stagnated wages in multiple jobs poses a serious health risk?

It has long been recognized that working longer than 8 hours, in non standard work shifts and unregulated work schedules can impose health risks that include:

. Sleep deprivation

. Potential injury

. Loss of appetite

. Fatalities

For employers, the risk is higher levels of insurance and government compliance liabilities due to increased injuries, loss of productivity and poor worker attention to safety in the workplace.

Ref: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4926781/

Conclusion

The actual economics of a gig economy is shorter term profits, health risks to employees and greater business uncertainty.

In conclusion, U.S. workers who realize their personal losses may replace working in multiple jobs for creating start up businesses.


working

This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://corp.maven.io/privacy-policy

Show Details
Necessary
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
Features
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Marketing
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Statistics
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)