Friday, May 31, 2024

Where Gig Work and Side Hustles Have Been Going, and What They Mean

There’s nothing new about either gig work or side hustles.  The first was called off-the-books, or in some circles, “owlhooting,” with pay or other compensation unknown to the authorities.  I engaged in it at age 10 or so when a fruit delivery truck driver offered me a “nice yellow apple” if I helped him find an apartment receiving his products.  The second type was known as “moonlighting,” and was generally not revealed to primary employers – I did that for almost my entire business career, ending over 20 years ago, and kept it to myself.

Both forms of work have evolved in significance as well as legally.  One problem is a tendency to illegitimately classify ordinary jobs that way.  The latest case I have seen was described by Terri Gerstein in “More People Are Being Classified as Gig Workers.  That’s Bad for Everyone” (January 28th, The New York Times).  It’s bad for the workers but not for employers, as they can thereby avoid providing benefits such as a minimum wage, overtime, and sick leave.  The law is simple – per Gerstein, “an independent contractor is considered someone who works primarily free of control and direction and is “customarily engaged” in an independent trade or business related to the service performed.”  In the case of temporary employees, seemingly a gray area between employment and gig work but a clear case of the former, companies in Colorado have been drawing fines from governmental department Denver Labor for treating restaurant “servers, bartenders, line and prep cooks, and… dishwashers” as if they could choose their own hours, uniforms, and work locations.  That’s a legal matter, as it should be.

One explanation for increased appeal of these two labor types to some people is “Why do women look for freelance, gig jobs?  Avoiding the ‘old boys network’ at the office” (Paul Davidson, USA Today, February 9th).  The author said that “there’s a reason lots of women are freelancing, doing contract or gig jobs and saying goodbye to the traditional workplace – and it’s not just about flexible hours.  They don’t want to deal with co-workers.”  That factor was the most common reason why, in a December survey, “they find gig work more attractive than working in an office,” with flexibility, “setting their own hours,” and “avoiding time-wasting commutes” also common reasons.  The difference between men and women was huge, with 77% of women naming the problem with fellow employees but only 23% of men agreeing.  A National Women’s Law Center executive thought “women don’t always feel empowered and don’t feel comfortable,” and “a feeling of uneasiness” about “work-life balance” affects them often as well, all worsened by lowered amounts of allowed remote labor.  Yet “thirty-eight percent of men and 17% of women describe themselves as flexible or gig workers.”  I have read elsewhere about Generation Z employees, especially, wanting more flexibility – it is probable that there will be some common workplace practice changes along these lines in the next decade or sooner.

That cohort is prominent in “Rising number of workers depend on side jobs” (Christopher Murray, Fox Business, April 16th).  Per a February study, “22% of workers in the U.S. had side gigs,” with 53% of those “living paycheck to paycheck.”  Of Generation Z, 32% had outside jobs.  Although that is easy to explain because of lower income and net worth, that number sounds higher than for other generations at similar ages.  Consistently, from a different source, the “Share of gig workers hit a new high in March” (Eric Revell, Fox Business, May 3rd).  Bank of America customers make up a different set of people, and the 3.8% of them “who received income from gig platforms through direct deposits or debit cards” may seem puny but was “above the previous peak that was reached in early 2022.”  That may be only a small subset of people working that way, but the comparison with early data is worthwhile.

What about gig employment and other secondary work would be beneficial change?  One thing likely to happen is that, whether their employees talk about it with others or not, managements will expect that a good share of their people have such ventures.  That has consequences for human resources practices – for example, de facto requirements that workers put in extra time may meet with greater resistance than before.  Understanding people is an important business skill, and helps with deliverables as important as cutting turnover.  Accordingly, firms that tolerate more of workers’ off-hours choices, including earning money elsewhere, will be more successful.  We may be seeing the end of work’s centrality to identity, and organizational handling of gig work and side hustles rates to be an important part.  That, beyond the income they provide, is their true significance.

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