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The ‘gig’ economy is uprooting the American workforce

A growing number of Americans are relying on side jobs or freelance “gigs” for income. And while tech companies such as Uber and AirBnB make this type of independence more accessible, journalist Sarah Kessler writes in her book, “Gigged: The end of the job and the Future of Work,” about some of the downsides for people far removed from Silicon Valley. Kessler joins Hari Sreenivasan.

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  • HARI SREENIVASAN:

    Ride sharing jobs aren't the only temporary opportunities that companies are wooing employees into. The gig economy is becoming an influential sector of the American workforce. I spoke recently with Sarah Kessler, author of the book "Gigged: The End of the Job and the Future of Work."

    Sarah, the ride sharing companies seem to make their money mostly on the fact that these are not their full time employees that they are independent contractors and that extends to lots of other companies in this gig economy as well. Is there a level of responsibility that these companies have? Are they defacto employers?

  • SARAH KESSLER:

    So that of course is really debatable and there's a lot of court cases around this topic that have gone in different ways. What I will say is that technology has made it possible to manage independent contractors in a way that you cannot manage without crossing certain boundaries before. With kind of these algorithms and the cell phones you can say to a driver you can drive whenever you want. Really, it's up to you. But just so you know you're going to make three times as much on Friday between 7 and 10.

    They can also do things like have passengers rate them and use that to understand like oh, this driver is not meeting expectations, we're going to kick them off the platform. So instead of having that be a decision that a manager makes, which would likely suggest that these are your employees, and that you're misclassifying them. It's a decision that the, you know, the phone makes and the algorithms make.

    So I think that companies like Uber, they demonstrate kind of the potential for people to use workforces that aren't their direct employees in new ways that they might not have been able to get away with before.

  • HARI SREENIVASAN:

    What you're demonstrating or you're talking about a system of incentives and disincentives that seems like a way for a company to exert control and I don't know if that's a legal term in terms of how the Department of Labor considers an employer and whether they have control over an employee. But creating these kinds of structures seems to incentivize people to do exactly what the company wants.

  • SARAH KESSLER:

    Yeah that would be the argument that there are actually employers and part of the problem is that there's really no clear definition of what makes and employer or what makes an independent contractor. The laws define those things differently so [it] might be different. When you're thinking about unemployment insurance than it is when you're thinking about health insurance. So part of it is that it's so confusing to figure out. It opens things up for a lot of people to find loopholes.

  • HARI SREENIVASAN:

    You've talked to a lot of different people that are working in this economy for your book. Several of them are lured by the idea that they're their own boss, they can set their own schedule, things are very flexible, they can have other passions and interests that just works with their life. And then you've also discovered that there are shortcomings here that they're not able to make ends meet, that they have to do multiple types of tasks or driving apps as well to just trying to get everything together that a 20 hour a week job or a 40 hour a week job used to be able to deliver them.

  • SARAH KESSLER:

    Yeah definitely. The way that I kind of got into the gig economy was I went and signed up for kind of 30 of these and tried to make the minimum wage. And what I found is that like even with a college degree I still really couldn't make minimum wage. So I thought about how this must be like really more complicated than the story that the startups were telling.

    For the book, I followed five different people who were working in this way in one way or another. And what I found is that there is a world in which like this story that startups pitch about this being like wonderful and independent and all you need. It really exists but it exists for people who have skills like programming computers versus some of the people who I followed who were trying to make ends meet on the lower end of things.

    Like one man who I followed in Arkansas his job was to answer customer service phone calls for Sears. The way that he got work is that they, every, week would let kind of these shifts go onto a platform and he would go [to] the platform and try to grab as many shifts as he could but in some times of the year, like when there are a lot of broken air conditioners in the summer heat, there's plenty of chefs to go around but when there wasn't that problem you know had trouble piecing together enough work, which is a huge problem if you're living paycheck to paycheck. So you kind of live with this level of insecurity that people who are wealthy and working in the gig economy don't.

  • HARI SREENIVASAN:

    All right Sarah Kessler. The book is called "Gigged: the End of the Job and the Future of Work." Thanks for joining us.

  • SARAH KESSLER:

    Yes thank you for having me.

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