The gig economy is coming. You probably won’t like it.
Say goodbye to salaries, health insurance, and vacation days. Forty percent of America’s workforce could be freelance by 2020.
KAGE YAMI is a ninja for hire.
For the past four years, the 27-year-old Newton resident has worked as a professional stunt performer for films and TV shows being made in the Boston area, like Ghostbusters, set for release this summer. Sometimes work takes him to New York. Sometimes California. Sometimes he models. Basically, he says, he takes on “whatever gig comes my way.”
Yami is one of a growing number of workers participating in the “gig economy,” the hip-sounding term used to describe those Americans who make their livings in nontraditional ways — nontraditional meaning “in ways not limited to a 9-to-5 job” or, framed in less optimistic terms, “in ways that don’t usually offer health insurance.”
According to a 2014 study commissioned by the Freelancers Union, 53 million Americans are independent workers, about 34 percent of the total workforce. A study from Intuit predicts that by 2020, 40 percent of US workers will fall into this category.
While there is considerable disagreement over this projection, what is clear is that “more and more jobs are being moved to independent contractor status,” says Jeffrey Pfeffer, a professor of organizational behavior at Stanford University. Pfeffer cites a recent paper that found that “the percentage of workers engaged in alternative work arrangements rose from 10.1 percent in February 2005 to 15.8 percent in late 2015.” This rise accounts for over 9 million people — more than all of the net employment growth in the US economy over that decade.
To be clear, employers are driving the change. Between 2009 and 2013, the unemployment rate was more than 7 percent, suggesting workers were turning to gigs because they didn’t have a choice. But that’s not to say most independent workers aren’t happy with their job situations. According to the Freelancers Union, a 300,000-plus member nonprofit, nearly nine in 10 of its members surveyed said they would not return to a traditional job if given the chance.
Kage Yami loves what he does, and he’s glad he gave up his Target job three years ago to focus exclusively on stunt work. The gigs are consistent, he says, “at least once a week.” In fact, he doesn’t even need to seek them out anymore. He’s been dodging cars and falling off buildings for so long that directors now know who he is and offer him work before he even asks. He’s also in the union SAG-AFTRA, which means his pay is regulated (and pretty good) and he gets benefits.
But Yami’s arrangement is wildly different than that of Jillian Melnyk, a 33-year-old independent worker in Waltham. Melnyk is a photographer and sells her work through traditional markets and online via Etsy. She also holds an MFA in writing and is working on a novel. “I kind of enjoy doing a handful of different things,” she says. “I like having different creative pursuits.” Good thing — because, as she readily admits, it’s tough to make a living just selling photography. So she supplements her income by working part time for Rochester & Genesee Valley Parent Magazine, a small publication her mother owns.
Melnyk thinks the biggest challenge for independent workers is the income unpredictability. “You’ll have one month that’s great, then a month that isn’t so great. You never really know where the revenue streams are going to be.”
Even when freelancers do lock in a gig, the money doesn’t always pan out. “Seven out of ten freelancers experience trouble getting paid by clients, often waiting months for a check — and sometimes getting outright stiffed,” explains Sara Horowitz, founder and executive director of the Freelancers Union.
Not to mention, says Pfeffer, that “in the US, every benefit comes through your employer — your 401k, health insurance, unemployment insurance. To the extent that you don’t have an employer, you have no access to any of these things.”
To remedy this, Steven Hill, author of Raw Deal: How the “Uber Economy” and Runaway Capitalism Are Screwing American Workers, has proposed an Individual Security Account, which would stay with gig workers wherever their careers took them.
Zac Wolf, a 27-year-old wedding photographer in Brighton, is booked in advance anywhere from six to 18 months out, and because his clients pay 50 percent of their bill upfront, he’s able to plan his finances with the same kind of regularity a traditional office employee might enjoy. He doesn’t want to end up like another wedding photographer he heard about, who broke his back in a motorcycle accident and was forced to cancel his bookings for the rest of the year (and had to return deposits). Wolf carries his own disability insurance in case of disaster.
The gig economy doesn’t treat everyone fairly, says Hill. “This economy leans to certain personalities,” he says, noting that making it largely depends on being able to hustle and market yourself 24/7.
“Taking great photos is step one,” says Wolf, who studied marketing in college to give himself an edge, “but there are so many steps after that.” If you know those steps, you’ll do well in this economy. If you don’t — you might not.
THOUGH RESEARCHERS HAVE LONG STUDIED workplace psychology — the field even has its own name, industrial and organizational behavior — the growing gig economy hasn’t received the same attention. That’s a shame: According to a recent paper from Roosevelt University, many freelancers regularly experience anxiety, frustration, anger, and depression, which is not surprising given the demonstrated benefits of regular employment on mental health.
Spencer Harrison, associate professor in the Carroll School of Management at Boston College, says that although gig workers face financial anxieties, the bigger issue can be an existential one. “Because we spend so much of our lives at work, work is a place where we find out who we are and craft our identities,” he says. “When we’re moving from one thing to the next, some people might sense a difficulty cobbling together ‘Who am I?’ ”
Gianpiero Petriglieri, a psychiatrist and associate professor at INSEAD, an international graduate business school, studies independent workers with colleagues Sue Ashford and Amy Wrzesniewski. They’ve noticed a unique double bind adding to the anxiety of freelancers. “On one hand, the work is precarious, but at the same time, it’s very self-defining,” says Petriglieri. “So work is becoming more and more important to who you are, and at the same time it’s becoming less secure.”
Anxiety about the future is one reason why Kage Yami’s parents want their only son to get out of the stunt industry. “They say, ‘I know you make enough money to do this and to do that, but it’s not steady. If you want a job that’s steady, you should go back to school.’ ” But Yami isn’t listening. He thinks about the old saying that if you find a job you love, you won’t ever have to work again. “To be honest, I don’t think I’ve ever worked a day in my life on a film set.”
Renee Rakowsky, a 60-year-old life coach in Newton, feels the same way. She says she’s “virtually unemployable” in a traditional environment, with “the bureaucracy, the politics, even the fact that they want me to work a schedule.” That’s why, when she’s not coaching, she drives for Uber. “I want to take time off Friday because I want to do blah blah blah; I block out time. Flexibility is fundamental to me.”
But there’s a hidden cost to this kind of flexibility. Because gig workers are never “on the clock,” they’re never really off it. A 2004 study concluded that because of the cyclical nature of independent work and the 24/7 brand management it requires, gig markets actually “place more rather than fewer constraints on workers’ time.”
So why, in light of all these anxieties, do most freelancers seem to prefer gig work? “That’s the million-dollar question,” says Wilma B. Liebman, former chair of the National Labor Relations Board. But one thing’s for sure, she says: “There is deep discontentment among working people — what do you think is fueling [Bernie] Sanders’s and [Donald] Trump’s campaigns?”
The hard part for researchers who study gig work is knowing whether someone is pursuing a genuine narrative of passion — “I’m doing this job because it gives me purpose” — or as more of a temporary Band-Aid, says Harrison. In either case, workers may speak positively about their jobs. And that makes sense, says Jeffrey Pfeffer. “There’s a process called cognitive dissonance, so you come to terms with where you are,” he says. “Humans have a way of not being chronically unhappy.”
But perhaps, says Petriglieri, some academics who spend their lives in established institutions might find it hard to look at freelance work as anything other than a bump in the road on the way to traditional employment. “It’s as if we can’t imagine people might actually choose to have a working life outside of an organization — and thrive.”
Whether they see the workplace changes as fundamentally positive or negative, experts agree that they need more research, because the gig economy isn’t going away. In any economy, the name of the game is getting work done efficiently at the lowest cost. Sure, you’re great at your job — but an independent worker could do just as well, and your boss wouldn’t have to give her benefits. Or pay for her water-cooler time.
Every worker needs to take part in these discussions, says Petriglieri. “This might be you some day.”