Brian Fuller's blog on the media, marketing and content creation

The Gig Economy-Part 2

Posted on | March 16, 2009 | No Comments

In the Gig Economy, we’re all consultants. Tom Foremski humorously alludes to this in a very insightful piece on the PR business, which seems to be being disaggregated by the day.

I get the feeling, though, that it’s going to be more than a short-term fix, a bridge to the next growth spurt, as leaning on freelancers usually is in downturns. Capitalism is a wonderful thing (this is where socialists head for the hills). It doesn’t exist to make us necessarily feel good or secure, although it does that in good times. It exists to make capital. Period. It creates structures and processes when it needs them and destroys them when it doesn’t. New form and function emerges atop those ashes.

Big Steel was a mighty engine that drove this country’s economy and built much of the world for most of the 20th century. Big Steel started dying in the 1970s, and today we hardly give it a second thought. Detroit is at a similar reckoning point. Big Media is as well. What’s especially breath-taking now is that at least two huge industries are undergoing turmoil at the same time.

Changing Nature of Labor
What’s fueled all of this since the Industrial Revolution is labor. And I think the Gig Economy may alter the nature of that labor forever. Here’s why. The nature of labor is always changing. Unions once held sway in America; today, they’re in decline. Study every recession and you’ll find it becomes a turning point for the next paradigm in capitalism. The last really tough one was 1982. It marked the end of Industrial America (steel on the descent) and the beginning of the Information Age. The story for the intervening 27 years has been electronics, computers and information technology. They have driven remarkable efficiencies in the world economy and tied nations together by an economic umbilical chord that’s both scary and necessary. (Socialists and nativists here keep running deeper into the hills).

The growth of Internet 1.0 was the first sign of really interesting change. Its expansion in the late 1990s represented an understanding–perhaps unconscious among most of us–that the confluence of computing, communications and open source software was about to change the world drastically. We were learning HTML but figuring out the larger implications. Web 2.0 underscored them this decade.

This confluence is really a platform to change the nature of labor. You now work anywhere, anytime. Place matters little; chops matter a lot.

Health Care Implications
People have been writing about this trend for more than a decade, but what propels it into the realm of widespread acceptance is the cost of health care. If I remember correctly from my management days, health care is a 15-20 percent adder onto an employee’s cost to the company. (This may be conservative). If you’re the guy tasked with looking at spreadsheets every day, that’s a big, blinking number.

The Gig Economy will be populated mostly by the 40-and-older crowd. They have grown too expensive on a salary basis, they’re getting to a point where their health care costs increase and they have the experience to fulfill downsized positions from afar. And let’s be honest, employees at that age have been churning it out in the workforce for 20 years or more; a little flexibility in your day can be a welcome thing.

But–big but–that means health care costs are borne by the consultant. This would be fine if we had affordable health insurance in America.

But we don’t.

So the continued tumult of the coming years will be less about employment levels (they’ll stay high with millions of “under-employed”) and more about health care. Maybe the heightened noise level will mean we actually get something done about it because it doesn’t appear the American corporation wants to foot the bill much longer.

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