“This year we’re debating: is the gig economy good for you?” said the College of Business dean, Shyam Kamath.
California State University, Monterey Bay (CSUMB) held its 18th annual Ethics and Responsible Business Forum on March 4. This year, they asked the question of if the gig economy is working or not.
CSUMB President Edardo Ochoa revealed that 65 percent of students work part time, most for over 20 hours a week.
“Many are involved in the gig economy as part-time workers, freelancers or independent contractors,” Ochoa said. “Clearly, this is an important source of part-time employment for our students, so you as CSUMB students will be largely influenced by this shift to the gig economy.”
With this switch into the gig economy, Ochoa stressed that it is important for everyone – and especially students – to understand what exactly the gig economy is and how to succeed within it.
“A gig is about work, work of variable or indefinite duration done for more than one employer or client,” said the first keynote speaker, Marion McGovern. “For me, the gig economy is the people who do that kind of work. It’s the people who procure them, the clients, the folks who use them, but it’s also the ecosystem that supports them.”
McGovern explained it is important to know what the definitions are and how people are accessing the gig economy. She stressed it is important to know exactly what people are including within their data and all the different terminology to describe independent work.
“The gig economy is very large in terms of people and in terms of its contribution to the economy,” said McGovern. In America, there are between 41 and 53 million independent workers in America alone, making up a third of the workforce.
McGovern went on to explain that most people working within the gig economy are doing this by choice. She revealed 70 percent of gig workers do it by choice. She also explained a study done by Upwork and the Freelancer’s Union showed 46 percent of people could not work traditional “9 to 5” jobs because they needed the flexibility.
McGovern also highlighted three studies that showed independent workers were earning more money than the full time employees. In the case of MBO Partners, they were 15 percent higher. In ADP, it was 7 percent higher and 6 percent higher in the Freelancer’s Union study.
Independent workers are also very optimistic about the future. McGovern stated 51 percent would not go back to “real” work and 91 percent see it as the best times were still ahead of them.
While McGovern focused on the positive sides of independent workers, she did touch on some of the problems that come with it. In particular, she explained it is very hard to get benefits and there is a problem with the “social safety net.”
“This is a wonderful testament to the American worker and we should celebrate that entrepreneurship,” McGovern concluded.
Her final points, touching on the negative sides of the gig economy, led into the stance of the second keynote speaker, Ceaser Lara. “I want to make the case that workers are being exploited and being abused by this new economy,” Lara said.
“We’re losing a lot of benefits that the previous generation fought for,” Lara said. “A lot of benefits like workers comp, fighting to have health care, fighting to have a retirement.”
In the end, Lara explained if something happens, the worker and society will lose and pay the benefits. He highlighted that while California may be home to the super-rich millionaires and billionaires, it also has the highest poverty rates in the country.
“We’re living in an environment that is really high in the cost of leaving and we need to do better and the gig economy is not helping,” he said.
Lara revealed that studies show 50 percent of people who take gig economy jobs are already living in poverty. Most of the jobs people have are not sustainable and most workers that pick the gig economy do it as a side hustle.
“It’s trying to make ends meet in an economy that’s really hard and in California, we have one of the hardest economies,” Lara said.
Lara went on to accuse the technology-based jobs of using loopholes to get away with not paying fair share of profits. This is what the labor movements are fighting for.
“What happens if you’re not even a worker? You’re a gig,” Lara said. “You’re just there for a short period of time and we as a society can not stand for that.”
California took a step forward in the right direction by introducing AB5, changing the definition of what an independent worker is. While this is certainly a step in the right direction and helping independent workers working with companies, Lara worries it isn’t enough yet.
“When you’re an Uber driver who takes care of the vehicle you’re driving? Who takes care if there’s an accident? It’s not Uber,” Lara said. “It’s the person that owns the car.”
He explained the bulk of the workers are drivers doing small bits of work and getting very little in return, so AB5 still needs some adjustments.
“I say that we need to put the brakes on the definition of what is a gig economy,” Lara said. “We need to stand up and fight for what is right. At the root of it, one job should be enough.”
The conversation of the gig economy and the ethics behind it is far from over. We should be aiming to thrive, not just survive in the gig economy.