Company of One
Sharing, gigs and the new economy
CALL IT A BRAVE NEW WORLD, call it a world turned upside down, but whether it’s got you dazed and confused or chomping at the bit to take part, the so-called New Economy is changing the way we work and make money. And it’s left many of us wondering exactly how we’ll fit into this strange new model, where “sharing” and “gigs” rule the day.
SHARING REALLY IS CARING
From an environmental point of view, sharing makes a lot of sense. Most of us own a lot of stuff, and a lot of it is stuff we don’t use all the time or at all in some cases (thanks Santa, thanks impulse buying). Why not lend it out – at a price – to someone who only needs it temporarily? Turns out the sky’s the limit because these days you can share anything from cars and bicycles to power tools and prom dresses. People are sharing space in homes for strangers to sleep, space in their garden for their neighbours to grow tomatoes, even money via peer-topeer banking. Buy less, share more, spare the planet. Why not?
GIGS BUT NOT BYTES Of equal interest to Canadians who are either in retirement or butting up against it is the rapid growth of the “gig” economy. This one’s not so straightforward. In simplest terms, it’s a working arrangement where sellers of labour are redefined as independent contractors. Instead of being hired on as an employee, you perform a job, you get paid, you get out of the way. Cheerleaders say it turns individual workers into entrepreneurs who enjoy flexible working conditions and a broader range of opportunities. It’s an exciting new world in which anyone and everyone who wants a day off only has to go as far as the nearest mirror to discuss the idea with the boss. A couple of years ago, a story in Wired opined, “It could be the force that saves the American worker.” Maybe, maybe not. It all depends on your situation, the skills you have, what somebody is willing to pay for them and your enthusiasm for being an entrepreneur.
The spectrum of employers in the gig economy is vast, ranging from corporations looking for temporary workers to individuals needing their houses cleaned or a ride across town. Accountants, artists, writers, labourers, lawyers, handypersons – you name it – are all hanging up shingles and naming themselves CEO of Company Me. It’s not like the idea just got invented; temp workers and individual contractors – including freelance writers like me – have been around forever. What’s changing the game is technology – the Internet and smartphones. Every day, it seems a new platform or app emerges that is designed to link up buyers and sellers of labour. This is a good thing in and of itself because it creates opportunity but at what price and for whom? So far the reviews are mixed. Linda Nazareth, an economist at the MacDonald-Laurier Institute, says she was stunned when she saw how low some bids for services can go in the new economy. “I used Fiverr to have a business card designed, and it cost $10 – for an original design,” she says. On another occasion, she paid five dollars to have a caricature drawn up for a birthday party napkin – again, an original work of art. How is this possible? The only way a homebased graphic designer in Toronto or Vancouver could make it at those rates is if their home was a shopping cart. Part of the problem is that the competition for the work is coming from around the world, explains Nazareth. “I think the napkin came from someone in Uruguay.”
The lower pay scales are not an anomaly. Studies indicate that workers in the gig economy are putting in more hours for less pay. According to the Bureau of Labor Statistics in the United States, “contingent” work-
ers earn, on average, US$140 less per week than “traditional” workers, and the only way to make up the difference is to work longer. And lower pay isn’t the only downside; these jobs come without the usual safetynet mechanisms like sick days and employment insurance.
In reference to the boomer demographic, Dr. Wayne Lewchuk, a professor at McMaster University’s School of Labour Studies and co-author of a report entitled The Precarity Penalty, says that the good news is that the gig economy can provide opportunities for those who can’t get full-time jobs because of their age. “If you’re in a good financial position and you just need a little extra income or something to do, it’s perfect, but clearly a lot of people who are a bit older need more than that. What’s going to be available to them in the gig economy may not make them happy.”
Even if the opportunities were widely available and the compensation adequate, not everyone is cut out to be an “entrepreneur.” I have made my living for more than 20 years as a freelance writer and I can attest to the “precarity” Lewchuck is talking about. Here’s some of the hard lessons: in the eyes of the people hiring me, I am typically only as good as my last job; if I fumble the ball, nobody I work for is obligated to hire me again – ever. It’s nice when you can build up a reputation as an entrepreneur and the work comes to you, but sometimes it doesn’t, and when that happens you tend to get nervous, really nervous, especially if you have a mortgage to pay and a son who wants to be an engineer. When I tell people with steady jobs about making a living like this they invariably shudder and say things like, “I could never live like that.”
Well, if things keep going the way they are going, they may have to. According to researchers in the United States, the gig economy grew by more than 14 per cent between 2002 to 2014. The New York Times says that represents an increase of between 20 to 32 million workers, or almost 18 per cent of all jobs.
In other words, it’s not going away, despite hiccups like taxi drivers hurling expletives at suspected Uber drivers in Toronto and house cleaners in San Francisco filing a lawsuit against Handy.com claiming the company
45% OF CANADIANS ARE WILLING TO RENT THEIR BELONGINGS TO OTHERS
40% OF YOUNG ONTARIANS (18-34) ARE CONSUMERS IN THE SHARING ECONOMY
42% OF THEM ARE WILLING TO RENT FROM OTHERS A TYPICAL AIRBNB HOST IN ONTARIO IS TAKING IN $ 450 THERE ARE MORE THAN 400,000 ESTIMATED UBER RIDERS IN TORONTO
15 IN RESIDENTS IN THE GTA HAVE USED UBER’S SERVICES ONLINE LENDING PLATFORM BORROWELL LAUNCHED WITH
$ 5.4 MILLION is treating them like employees and should therefore compensate them as such. It’s safe to say that in time the lawyers will figure out a way to close the loopholes and frame the contracts, and the gig economy will continue to grow. As it does, says Lewchuk, policy-makers are going to have to start having a conversation about how to ensure it isn’t just creating an underclass of poorly paid workers with no safety net to catch them if they get sick or can’t find work.
“In some ways, it’s frightening, but on the other hand Canada is a wealthy country, and productivity keeps going up. We just have to find ways of sharing it fairly,” he says.
Assuming we can find ways of doing that, the gig economy looks set to provide enormous opportunity for older Canadians looking to stay in the game and continue contributing to the growth and prosperity of both the nation and themselves.
Taxi drivers in Toronto protesting Uber driving service