More Than Just a Gig

My Uber driver is also an accountant. The Personal Shopper who delivered my friend’s groceries last week told her she’s a graphic designer. The promise of flexibility, the freedom of “being your own boss,” and the pressure to make ends meet in a recovering economy, have given rise to a booming freelance economy that’s become the hot topic of discussion.

Some call it the “gig” economy, but it’s more aptly named the “Flex Economy.”  Why?  Because the population of today’s flex workers covers a full spectrum of professions, from drivers, shoppers and caregivers to lawyers, marketers and engineers.  According to Freelance Union estimates, more than 50 million Americans are freelancing, juggling multiple part-time jobs to care for their families. That’s 34 percent of the workforce, projected to be 50 percent by 2020, a not too distant future.

We are very rapidly entering a new world of work, a fundamental shift which could redraw the lines in the employer-employee relationship. We cannot dismiss members of the Flex Economy as the disenfranchised fringe. We must recognize this movement for what it is – the fastest growing segment of the workforce.

The world of work is fundamentally shifting before us. Concurrent with the rise of on-demand talent platforms has been the movement of white collar workers from a full-time W-2 workforce to a freelance 1099 workforce. These are consultants, freelancers and temps; young creatives, mid-career women who “opted” out to start families and older employees who never found their way back “in-house” after losing jobs in the recession. 

Our changing world of work presents us with significant challenges, but this is also a time of tremendous economic opportunity.

Death of the 9 to 5 

We are witnessing a sea change in the way we work, the way we live, and the way we want to live. Consider the demographics.  On the gender front, women today are nearly half the workforce and 40 percent of primary breadwinners.  The White House Council of Economic Advisors estimates that in the last 40 years as more women have entered the workforce, they have added $2 trillion to our economy.  Beyond gender, there are changing family dynamics.  Today, nearly 70 percent of households are dual-income and 50 percent of workers are caring for someone else, including the tens of millions of men and women in the Sandwich Generation, providing care for both their children and aging family members.

And finally, there’s the generational effect. The arrival of Millennials as our largest workplace demographic and our next generation of leaders could also be a game changer. Millennials have entered the workforce with a different set of values than generations before them. They want work to fit around life, not the other way around. And they want – and expect – to split breadwinning/caregiving responsibilities equally. A recent study by EY revealed 54 percent of US millennials have or would pass up a promotion to have better work-life integration. Thirty-eight percent said they would move to another country for better parental leave benefits, according the study.

We are a nation of working caregivers, yet our policies and corporate cultures cling to a bygone era of single-income households and traditional nuclear families.  Yes, businesses are beginning to answer the call.  Some of this summer’s biggest business stories were major corporate announcements about expanded paid parental leave programs. The New York Times writer Claire Cain Miller describes the trend as an “arms race” in which enterprises are loading up on family-friendly benefits and touting flexibility in order to attract and retain today’s best and brightest talent. And while these steps should be lauded, the presence of work-life benefits alone is not enough. As the new study by McKinsey and LeanIn.org found, 90 percent of workers are reluctant to take advantage of flexible family leave programs for fear of retribution.  In essence, we’re changing the icing but not the cake.

My friend Anne-Marie Slaughter, president and CEO of New America Foundation, addressed the need for a culture shift in her recent piece, “A Toxic Work World.” In it, she explained that the antiquated image of an “ideal” employee, clung to by those at the top of the business world – a male-dominated strata where most of the men have wives who don’t work outside the home – obliterates work-life balance and penalizes all working parents and caregivers.

Something has to change.  

Flex Economy Rising

In recent years, companies like Uber, Drizly and Instacart have emerged, connecting consumers with on-demand services; and companies like Thumbtack, Upwork and Care.com – my own company – offer marketplaces powered by technology. Both on-demand services and digital marketplaces provide platforms that allow flex workers to connect with consumers. These platforms have been hugely disruptive, but with disruption come the billion-dollar questions about freelance classifications, worker protections, the quality of jobs, and the social net that will protect this new breed of worker.

Many of these issues are now getting the attention of policymakers and these conversations will ramp up as the presidential election approaches. I have been privileged to join other CEOs and executives from across the digital spectrum to discuss the landscape we face as leaders.  Like them, I see huge economic opportunity.  But as Founder and CEO of the world’s largest online platform for finding and managing family care, my interest in and commitment to making the Flex Economy work runs deeper than that.

Domestic workers are in many ways the original Flex Economy workers – frequently cobbling together different part-time jobs, and long left in the shadows of formal workplace protections and benefits. It is likely that caregivers are one of the largest portions of the Flex Economy. There are 6 million caregivers on our platform and our own data tells us that 70 percent of jobs posted on Care.com are for part-time work, or less than 30 hours per week. While the concept of people working multiple jobs without the benefits afforded full-time employees is not new, online marketplace platforms and on-demand services are fueling huge growth, and with it enormous economic impact and opportunity. A McKinsey report estimated that online talent platforms could add $2.7 trillion, or 2 percent, to global GDP by 2025, while increasing employment by 72 million full-time-equivalent positions.

Let’s use the care space as an example. We’re talking about a $280 billion industry, with personal care aid jobs slated to grow by 49 percent over the next decade, compared to 10 percent for all jobs. Online talent platforms are making it easier than ever for families to find and manage care and for caregivers to find jobs. But still - if we don’t start increasing the quality of care jobs and attracting talent to those jobs, there may not be enough caregivers to support families in need.

If you’re a parent, you know just how critical it is to have quality care for your children.  If you’re not a parent or uncle or aunt, remember, you are someone’s child.  At some point, a senior in your life will need care and as more and more baby boomers turn 65, that moment may be closer than you think. So what do we do?

Care.com has teamed with the National Domestic Workers Alliance and its founder Ai-Jen Poo in support of the Domestic Workers Bill of Rights and to raise job quality standards for domestic workers through efforts such as the Fair Care Pledge, which asks families to create fair and respectful workplaces for their household employees.  Our HomePay business focuses on compliance in household employment, making sure household employees are paid legally and therefore have access to the same benefits traditional employee take for granted. And, as a Henry Crown Fellow of the Aspen Institute, I’ve begun exploring ways the Aspen community can help positively shape the future of work, including the professionalization of caregiving. 

These are important first steps but they are just the beginning.  Just as we need to build a care infrastructure to support these workers, we need an infrastructure that supports all Flex Economy workers.

Opportunity

For the United States to remain a global economic leader, we must adapt to the realities of our modern workforce and design a social infrastructure to support it. For American workers and enterprises to thrive in this new economy, we need quality, stable jobs for flex workers; flexibility for all workers; and benefits structures supportive of mobile employment.

We have to find a way to continue to encourage innovation, provide a safety net for the American worker, and protect the flexibility this new workforce demands. Here are some good places to start to address this:

• Decouple benefits from traditional employment and provide a safety net of pooled, portable benefits for those workers who are not connected to traditional employers.
• Establish classifications that incentivize digital marketplaces, on-demand services, and employers to provide access to pooled benefits.
• Promote education of consumers and freelancers around laws and definitions of employment.
• Foster public-private partnerships to advocate for policy and behavior change.
• Support policy changes to provide social infrastructure for mobile employment and the changing face of work and home life. Obamacare was a great start to disassociating benefits from your employer. Now we need things like the FAMILY Act, a proposal for a national paid family and medical leave program, by Senator Kirsten Gillibrand and Congresswoman Rosa DeLauro.
• Bolster and invest in already existing social infrastructure, such as expanding the expense limits of the Child and Dependent Care Tax Credit, which has not been expanded since 2001 and has not kept pace with inflation. And an increase in the income limit would help more middle class families qualify for the maximum credit.

Having had the honor to speak at the historic White House Summit on Worker Voice last week, I am more convinced than ever that we are standing on the threshhold of a new world of work. We must seize this opportunity to address long-standing safety net inequities and build a labor economy that truly serves a 21st century workforce that is more than just “gigs.”