What Happened to That Gig Economy?

By: | July 13, 2018 • 4 min read
Peter Cappelli HRE’s Talent Management columnist. He is the George W. Taylor Professor of Management and director of the Center for Human Resources at The Wharton School of the University of Pennsylvania in Philadelphia. He hosts "In the Workplace" on SiriusXM Channel 111 with Dan O'Meara. He can be emailed at [email protected]

When was the last time you heard a presentation about human resources that didn’t include something about how the workforce is going “gig,” which means working via online platforms like Uber or just a series of short, contract-type engagements? Many say this trend is growing so fast that soon virtually all jobs will be like this.

What if that’s not true? The best evidence suggests that it isn’t.

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One of the least-covered but most important reports produced by the Bureau of Labor Statistics in modern times came out this past spring. It reported the results of the Contingent Worker Survey in 2017, last conducted in 2005. The survey got started in 1995 when the concern was about layoffs, which is why the BLS defines contingent work by the perception of individuals that their job isn’t going to last.

The first result from the survey is the percentage of employees who believe their job will not last more than one year: It was 2.2 percent in 1995 and 1.3 percent in 2017. That’s right, there was more apparent security last year than in 1995. If we add temps and contractors to the sample, the figures are 4.9 percent and 3.8 percent, respectively.

It could be that people today are just less worried about their jobs, so maybe they aren’t seeing the insecurity that really is there. Let’s look then at people who are not employees—Uber workers, contractors of all kinds. (Anyone who is not an employee working for pay is an independent contractor.) In 2005, the figure was 7.4 percent, up from 6.9 percent in 2001, perhaps because it was the beginning of a severe recession, and some people who were laid off might have called themselves “consultants.” In 2017, it was 6.9 percent. That’s right, it’s also gone down, back to where it was in 1995. Temp work and other alternative arrangements are at virtually the same level as in 1995.

These data come from the U.S. Census, and the results are far more credible than anything else we have. “Gig” work, either in the form of contracting (which includes all Uber-like electronic platforms) or even short-term regular employment, has not increased—if anything, it appears to have decreased—during the period when it was claimed to be exploding.

How could this be? That is the important story, and it has to do with how human resources has changed. As everyone reading this knows, HR is now a big industry full of vendors and consultants all competing for attention. The way to get attention is to say something new. The electronic platform that Uber used wasn’t exactly new. It had been around at least since Elance launched in 1999, but the scale of Uber and its visibility gave the platform a great deal of attention.  If you are a reporter looking for other examples, you’ll find some, and the stories in the press about them make the phenomenon new to readers, even if it isn’t new to the workplace.

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What happens next is the piling-on phenomenon, beginning with consultants doing “studies,” which are typically just surveys asking people what they think. Those reinforce the news.  Before you know it, anyone trying to establish credibility with an audience ticks off a list of “facts” about what is new and includes the gig economy on that list. Then it becomes perceived wisdom.

What I’m looking to see is whether any of the authors of those reports about how jobs are all going gig pulls back on them now. I’m guessing no. That should say something about their credibility going forward. Will speakers continue to bloviate about it? Here we might help them along just by asking, “Excuse me, what do you think about the Bureau of Labor Statistics report showing that gig work is actually declining?”