Americans Are More Vulnerable Than Ever, And The Gig Economy Isn’t Helping

As Americans carry greater risk, the gig economy is both a symptom and a cause of America’s fraying social contract.
Made possible by

Kristy Milland had always pulled together odd jobs to help her family survive. She’d been an early adopter of new ways to earn money online. She ran an eBay store, and, before social media took over, a website where strangers chatted about reality TV. “I’m one of the first people who could be considered a digital native,” she told me. “I would constantly search for new income streams.”

She remembers reading about Mechanical Turk, Amazon’s crowd-working platform, soon after it launched in 2005. “It seemed so different and so new,” she said. It wasn’t just freelancing, it was e-lancing. Workers could take on small projects, some lasting just minutes, whenever they wanted, and they could work from home. It appealed to Milland, who’d already realized she liked being her own boss. She started working part-time on tasks for Mechanical Turk, along with her other projects.

But Milland soon learned that too many jobs on Mechanical Turk, which include tasks like audio transcriptions, keying in receipts, and training artificial intelligence programs to recognize human voices and movements, paid just pennies per hour. What’s more, if a requester rejects the work, a Turker won’t get paid for his or her time at all. A 2016 study from Janine Berg at the International Labour Organization found that the average U.S. Mechanical Turk worker earned just $5.50 an hour, and the median pay was $4.65 an hour.

In 2010, Milland’s husband was laid off from his warehouse job in Toronto. He received severance pay, but it took him two years to find another job. Once he did, it didn’t pay as well as his previous job had, and had fewer benefits. Over time, his duties increased, but he didn’t receive a pay raise for the added responsibilities.

Kristy Milland speaks at a conference held by the union UNI Europa in Rome in 2016. (Photo courtesy of UNI Europa)

Mechanical Turk became even more necessary for Milland’s family to make ends meet. Over the years, Milland had tried to find other work. But she kept coming back to Mechanical Turk. There weren’t many jobs that would hire her after so many years of working on her own from home. She either had too little experience or was overqualified. “Literally, Mechanical Turk was all I had left,” she said.

During countless hours working Mechanical Turk gigs, Milland started to study the way the platform worked — to research why its workers did the work they did. She discovered that many Turkers, as they call themselves, shared a common motivation: They were working to try to pay off medical bills. Milland and her family lived in Canada, which meant that their healthcare was covered. “If I hadn’t had nationalized health care, to be honest, I’d probably be dead,” she said.

The realization prompted her to look toward organizing her fellow workers, and thinking about the grassroots changes that needed to happen in North American governments. She saw the economy she was working in, the gig economy, not as the problem, but just a symptom. “My experience with capitalism is that it’s very hard to get off that bottom rung,” she said. “The gig economy is serving those bottom rungs… un- or underemployed, part-timers. A normal job doesn’t give them enough money. The economy is failing even people with a job.”

After her husband found his new job, in 2013, she enrolled in university, receiving a bachelor’s in psychology and a master’s degree in labour studies. She started law school in August, and has started publishing academic papers on the gig economy and crowd work, thinking about the reasons a platform like Mechanical Turk can thrive, even when it doesn’t pay well.

“More and more stable, well-paying jobs seem to be making way for precarious workplaces such as mTurk — or TaskRabbit, Uber, Instacart,” she wrote in 2017. “Turkers are asked to be journalists, pathologists, programmers, graphic designers, legal assistants, academics, and virtual girlfriends. None of these jobs are disappearing. They are just going to a cheaper, faster, and more efficient platform, offered to a crowd of workers at pennies a piece.”

At fault, she told me, is the fundamental way in which we view our relationship to how we work. “It all comes from capitalism, which says you can do it on your own,” she said. “The bottom line is, most people are not.”

By 2010, according to the Government Accountability Office, 40.4 percent of the workforce was in “alternative work arrangements” — up from 30.6 percent in 2005. These statistics include a range of workers who, like Milland, piece together work through short-term gigs, contract work, part-time work, or temporary positions.

Some of these jobs are those where people have traditionally worked for themselves, like real estate agents or freelance writers, but there was some alarm in the wake of the Great Recession that the number of people in such arrangements was rising sharply. Some surveys found that almost all of the jobs created after the Great Recession were in this type of nontraditional, insecure job, and many were part time. Many took a second, part-time job to cover their bills. In this era, these types of jobs have taken on a new name: the gig economy.

This trend was especially epitomized by the rise of the Silicon Valley companies that allow people to use phone apps, like Uber, or online programs, like Mechanical Turk, to work for very, very short periods of time: Uber drivers are paid only per ride, and Turkers might be hired for just minutes and paid in cents. By design, these Silicon Valley companies deny that the people who work on their platforms are even employees, and disavow any traditional employer obligations to them. Having a low-paid, benefits-free job for only ten minutes at a time is an arrangement made possible only by the Internet, and some worry this kind of gig is the dark, logical endpoint of the rise in temporary employment we’ve seen over the past decade — and a harbinger of a dystopian, sweatshop future.

Jeff Bezos, Travis Kalanick.(TPM Photo Illustration / Getty Images)

Others have taken a calmer tone, especially in the wake of a survey from the Bureau of Labor Statistics released in June that showed that the size of the contingent work labor force — the gig economy — was smaller than previously thought. The vast majority of U.S. workers still earn their primary paychecks from traditional types of employment, the report found: As of May 2017, only 10.1 percent of the workforce was in an alternative work arrangement, down from 10.7 percent the last time the survey was taken, in 2005.

How to square this with more dramatic figures on the rise of gig work, as indicated in other surveys? For one thing, the Bureau of Labor Statistics report only accounted for workers’ main source of income. And much of the gig economy exists as a second (or third, or fourth) paycheck. By some estimates, 6 to 8 percent of workers take on gig work as a second job. Berg’s study on Mechanical Turk found that 45 percent of workers said they worked for “a complement to the pay from other jobs.” The workers are well-educated, and many Turkers were pursuing a college degree. That means that education hasn’t saved them from having to find extra cushion.

In some cases, contingent work is often advertised as a second gig. In San Jose, California, for example, Uber encouraged public school teachers to drive as a way to make extra money; in 2014, it’s campaign’s motto was “Teachers: Driving Our Future.”

“Teachers are killing themselves,” a teacher named Matt Barry told journalist Alissa Quart, who wrote about him in her new book, Squeezed. “I shouldn’t be having to drive Uber 8 o’clock on a weekday. I just shut down from the mental toll: grading papers in between rides, thinking of what I could be doing instead of driving — like creating a curriculum.”

I asked Turkers about their experience on the platform itself: I signed in as a “requester,” which is the term for someone assigning a job, and asked a few questions. Because I’m a journalist, I did not and could not pay anyone for their time, and disclosed that up front. I received about 15 responses. Almost everyone said they signed up for the work because they needed the extra money. Almost all have other sources of income, but one person relied on it as their only source of income. Nine said that if they stopped Turking, they would either struggle to pay bills, have to pick up another job, or have to cut back on services they use now but consider luxuries, like Netflix.

All agreed that the jobs on Mechanical Turk should pay more money. Because it is not a traditional work arrangement, many requesters pay much less than the minimum wage. Workers spend a lot of unpaid time just looking for good jobs to sign up for. Even when they take a job, requesters can reject the work someone did, which means that Turker won’t get paid at all. Most of the 15 people who responded to me thought that Amazon should find a way to enforce the minimum wage, that low-paying requesters should be penalized in some way, and that it should be easier to provide feedback or complain about bad requesters. In other words, most Turkers think that too many requesters get away with paying too little and treating them unfairly.

“America doesn’t guarantee a decent standard of living to its citizens: it only guarantees the chance at a decent standard of living to its workers.”

Yet they still liked it. In Berg’s survey, 19.4 percent of U.S. Turkers said they Turked because they preferred to work from home, and of those, 36 percent said they had a health problem that made working outside the home difficult. I found this to be true in my responses as well: One person said they had a lot of health problems but did not qualify for disability insurance, and another said they had hurt their arm badly years ago and found other kind of labor too difficult. Also, more traditional jobs were not so much better that they outweighed the benefits of earning money from home. Turkers like the freedom working on their own time provided. For some, Turking was an alternative to trying to collect a disability payment. The truth is, these kinds of jobs can be appealing.

But the current system leaves people too vulnerable. In the early days of Mechanical Turk, Milland and other Turkers found themselves with a massive number of rejections for work they’d done. They didn’t have a mechanism for complaining to Amazon and complained about it on social media; when the dust had settled, Milland still found herself left with 5,000 rejections. It lowered her rating and she found it difficult to get good jobs on the platform again. A site outside of Amazon where Turkers can report their experiences, Turkopticon, has tried to help give Turkers better information about the kinds of requesters who pay too little or are too likely to reject work, but it’s not part of the Amazon platform. Unlike with Uber, where customers can rate their drivers and vice versa, workers on Mechanical Turk can’t provide feedback on the people who are hiring them.

I spoke with Mikey Chlanda, who was injured while on the job as a firefighter in 2006. He has written about his fire department and his experiences, and makes money as a freelance writer. He started Turking in 2006 both to supplement his freelance income and to make extra money after a divorce. His current girlfriend, with whom he lives, is a doctor, and without her income he said he might struggle to pay the bills. “I would have figured out a way to survive,” he said, but Mechanical Turk, “definitely made it easier.” The downside is that it’s insecure. “If you show up one day and Amazon just throws you off the platform, that’s it.”

The American star of the British show Catastrophe, Rob Delaney, made this point on Twitter recently, when he sang the praises of the National Health Service there. He moved to the United Kingdom four years ago, and wrote about a bad experience he had with the U.S. health insurance system: he was dumped by an insurer after a bad car accident. The company stopped paying his bills, and he was hounded by collection agencies for tens of thousands of dollars he couldn’t pay. He took a job he didn’t want or enjoy just to have an insurance plan. “I mention this as many ppl have their lives/dreams derailed by having to keep a bad/unsavory job just to keep their families’ health insurance,” he tweeted. “WHAT a drag on a country’s spirit to say nothing of its economy.”

Many workers are pushed into the gig economy simply because their main jobs are not as good as they might have once been. As Jacob Hacker writes in his piece for this series, the U.S. social-insurance system is smaller than that of other wealthy countries, but we have historically made up for that with private-sector protections.

Over the last few decades, however, America’s social-insurance system has leaned more and more heavily on the private sector. In retirement savings, private plans like 401(k)s, which require employees to save for their own retirement, sometimes with additional contributions from their employers, began replacing employer-provided pension plans in the 1980s. Most American workers receive health insurance through our jobs or, more rarely, our unions. It’s also through our jobs that we access safety net programs like unemployment insurance, disability insurance, and retirement savings. Those who don’t get these kinds of programs from their jobs either buy them on the very expensive private market, or go without. Only the extremely poor qualify for government programs.

And now, following years of political assault on worker protections, the unions who once fought for these benefits are considerably weaker; workers bounce from job to job with greater frequency, or become independent contractors.

The erosion of traditional jobs and the benefits they provide leave people exposed to life’s ups and downs — medical costs, such as those faced by many Turkers, or the loss of a job, like in Milland’s family. Teachers and other formerly solidly middle-class professionals take these jobs because they need the money to afford basics, like housing, health care, and child care. Most workers can’t even afford to save for their own retirement. Even if employees, including college-educated workers once thought to be relatively well off, can get benefits from a traditional job, they’re required to take on more and more of the costs of receiving them, from contributing more to their health insurance premiums to providing the costs of their own training by attending college.

“The gig economy, no matter its size, is a symptom of a larger problem: Workers aren’t making enough, and have nothing else to fall back on.”

All of this means that being a permanent employee isn’t always that much better than being a temporary one. Five years ago, Antonio Ivy married a woman in Mississippi and moved from Pennsylvania to be with her. He was 35 then. Ivy had spent years working in factories: eight years as a warehouser in a factory that made stock paper for magazines and newspapers until it was bought out and he was laid off; four years in a factory where he made wall coverings for hotels, until it too was bought out. His jobs were well-paying and unionized.

In Mississippi, the best job he could find was in the Nissan plant in Canton, about half an hour north of Jackson. He had a brother who’d been hired on in the early days of the plant, which opened in 2003, as a permanent Nissan employee. Ivy’s brother made $24 an hour and had good health insurance. But Nissan only directly hired employees in the first few years of its operation. Since then, almost all of Nissan’s hires have been made through a temporary employment company, most often Kelly Services, and this was the path to employment Ivy had to take. The starting pay as a temp was only $12 an hour, which felt like minimum wage compared to his last jobs. Ivy wasn’t offered paid vacation, sick days, or health insurance.

“They said, ‘We’ll hire you on full-time shortly,’” he said. “It took over two years.”

Foreign automakers in the United States, who largely set up their factories across the anti-union states of the South rather than the Big Three stronghold and union-shop strong Midwest, have been relying on temporary workers almost from the beginning. By some estimates, almost half of temporary workers are in manufacturing or in industrial work settings.  In 2015, temporary agencies provided an estimated 11.3 percent of manufacturing employment, compared to just 2.3 percent in 1989.

Over the two years, Ivy and other temp workers saw their pay increase by tiny bits, but not by much. By 2015, Ivy was making an hourly wage of about $13.80. Yet the temp workers were still working alongside the permanent Nissan employees who made more than double what they made, doing the exact same work. Worse, the temp workers didn’t receive health insurance benefits — they had to pay for their own plans, and Ivy said his family plan cost him about $200 a week. They also felt they had no protection from unfair or fickle bosses who would arbitrarily change the time of their breaks, or cancel them. They could be fired at any time.

(TPM Illustration)

The United Auto Workers thought the pay disparity and two-tier system of employment would help them organize at the plant. Ivy supported unionization in a vote held in August 2017, but the vote failed.

Ivy liked the work, and loves cars. He wanted to stick with the job. After the union effort, Nissan tried to mend bridges. It offered permanent Nissan employment to many of the temp workers who’d been there a long time through a new program called Pathways. Pathways employees would be hired on permanently, and Ivy was one of them. Some of his fellow Pathways workers had been temporary workers for six years. They all got an immediate bump in pay, but it was only by a few dollars — Ivy now makes $19 an hour. They received a benefits package that included health insurance, which Ivy said was good for him because he immediately started to save money.

But the Pathways workers were treated differently than the permanent workers, now called legacy workers, who came before them, such as Ivy’s brother. Benefits like vacation were slim. They won’t have a pension. They don’t have a contract, so they can still be fired at any time. Ivy said that, in the beginning, he got a mere 24 hours of personal time off a year, which he had to use for illness as well as for vacation. Legacy workers had four weeks of paid vacation.

“We got one badge, but we’re still different,” Ivy said.

Most temporary workers in most plants are paid less than permanent employees, just like Ivy is. Carmakers, and other heavy industries, have been able to maintain the practice because, even with temporary status, workers find them some of the highest paying jobs around.

Workers in the gig economy, like Milland, are trying to weather rough patches with temporary work, but working in the gig economy also makes them more vulnerable to future rough patches. I spoke to her in June, and she told me that the day before, her husband had come home and told her that half of the employees in his warehouse had been laid off. He still had his job, but he felt like the clock was ticking. After years of cycling through gigs, not getting paid enough on Mechanical Turk, and watching her husband’s employers pay him too little, Milland worries she and her family will have to sell their condo. That would bring its own challenges, however: rentals in Toronto are expensive. “I’ve done the many-year plan. It does not look good,” she says.

But workers like Ivy — now with a full-time position — are hardly better off. Ivy can still be fired at any time, and he’s making less than the better-paid legacy employees at Nissan. He hasn’t been able to save much of a cushion over the years.

“In 2015, temporary agencies provided an estimated 11.3 percent of manufacturing employment, compared to just 2.3 percent in 1989.”

Who’s left to provide workers with the stability they’re not getting from their employers? In many other countries, it’s the government. But the American government’s safety-net programs are routinely underfunded and are often viewed as a last resource for families who have exhausted every other option.

Increasingly, Republican-controlled state governments are requiring anyone relying on a government-funded safety-net program, like Medicaid, to work to even be able to access assistance. Some Republican proposals in Congress would require food stamp recipients to work, and the party is hinting at further cuts to remaining social-insurance programs, including Medicaid, Medicare and Social Security, after the midterm elections.

The gig economy, no matter its size, is a symptom of a larger problem: Workers aren’t making enough, and have nothing else to fall back on. It’s rise is both a sign that the social safety net has eroded, and that, if these types of employment arrangements remain popular, we’re going to need a stronger one. There have been some proposals in Congress to change the social safety net so that individuals’ benefits are more nimble and move with them, but, politically, it’s more likely that the programs people rely on will be cut, not improved.

Many of our safety-net programs were designed during an economic depression in which almost a quarter of Americans were looking for jobs and couldn’t find them. They were designed to be a bulwark against inevitable economic downturns. In this era, however, America doesn’t guarantee a decent standard of living to its citizens: it only guarantees the chance at a decent standard of living to its workers. And being a worker in America is an increasingly precarious position to be in. The gig economy itself may still be small, but even traditional work arrangements are becoming more and more gigified, part of an economy in which workers have low job security and receive low pay and few benefits, most of which they have to pay for themselves.

No one illustrated this better than the former CEO, Travis Kalanick, who was ousted earlier this year after a series of scandals dogged the company. Last year, when an Uber driver complained about fare cuts last year, Kalanick lashed out, and what he said was caught on video: “Some people don’t like to take responsibility for their own shit!”

Kalanick’s fortune is reportedly just under $5 billion: a report released this year shows that Uber drivers make just under $10 an hour. In a lot of ways, Uber represents the anxiety most workers feel about the current economy: They worry, with ample evidence, that very rich people are looking to find ways to make themselves even richer by dispensing with private sector protections, protections that have historically been a key part of the U.S. social insurance system. Without those protections, American workers are left with no choice but to take over their own shit.

Monica Potts is an Arkansas-based writer, currently writing a book about the women of her rural hometown.

Made possible by
Democrats Must Become The Party Of Freedom
The Great Risk Shift That Helped Deliver Donald Trump