The Aspen Institute Inc.
11/21/2024 | News release | Distributed by Public on 11/21/2024 08:07
The Gig Economy's Next Act: Balancing Flexibility and Security for Workers
Like so much of our culture, the word "gig" comes to us via New Orleans jazz. The exact origin is murky, but one legend has it that Black musicians would play in small carriages, called gigs, to avoid arrest for playing on the street. When jazz migrated into nightclubs, the night show may have been the dream, but many artists relied on day gigs to pay the bills. That's the soul of the gig: the freedom to chase your dreams, and the ability to pay your bills.
It's easy to see the appeal, and ten years ago, it was clear the gig economy was on the rise. Traditional 9-to-5 work, while dominant in American culture for a century, had predictable flaws: flat wages, rigid schedules, and lack of flexibility. Many people today are looking for something different. This labor market isn't your parents' - back in the day, a career meant a job for life. That evolved to the idea of a career as a journey of positions that each lasted for 5-7 years when I was growing up, and more recently 2-3.
"Work" became "work-life balance," which became "work-life integration." It's not about retiring when you're sixty. It's about working, playing, caregiving, side-hustling, traveling, spending, and saving. Work is a little bit of everything, a little bit of everywhere.
As always, technology ushered this trend along: smartphones, broadband, and high-quality audio and video introduced entirely new ways of working. Salaried knowledge-workers working from home have benefited enormously. But, so have hourly workers and workers in the gig economy, thanks to the doors technology has opened to monetize people's assets and skills in new ways. From leveraging your car to give rides on Lyft, to advertising your abilities as a handyman on Taskrabbit, millions of people are now integrating gig work into their lives like never before.
This tectonic shift in work culture has helped the freelance economy boom. Consumers aren't the only ones who value convenience - workers do too. Far more people have turned to gig work than most people realize. By one estimate, 36% of adults in the U.S. are currently earning or have at one point earned on an app-based platform[1]. The app-based industry as a whole is now an enormous economic force, contributing over $212 billion to the American economy every year[2].
While many predicted the rise of the gig economy, few anticipated just how fast or how many people would adopt gig work. Workers turned to gig work because it gave them more control over their lives, but found themselves missing the benefits of traditional work - things like a minimum wage or paid sick leave. Laws and regulations haven't kept up with the explosive growth of gig work, so gig companies can't provide these sorts of benefits without risking workers' status as independent contractors. This leaves workers in limbo.
But there's been a movement in the industry to create a new kind of safety net that mirrors the benefits of traditional work but is compatible with the realities of gig work. We've seen real progress around "portable benefits," tied to how much (or how little) someone works on a gig platform. For example, a gig worker might earn a healthcare subsidy or accrue paid sick time from multiple apps if they log a certain number of hours - so they don't have to work on a single app to earn coverage.
Various states around the country have taken the lead in designing these portable benefits. In California, Proposition 22 allowed gig workers to remain independent contractors while gaining benefits like minimum earnings standards and healthcare stipends. States like New York, Massachusetts, and Washington soon followed suit with portable benefits that fit their state's specific needs.
This state-by-state approach works, but it's not as easy to implement as it should be. We need federal legislation that supercharges this process in the states and helps us get benefits to gig workers faster. The new administration has a chance to improve the lives of millions of hard-working Americans and their families, by supporting federal legislation that preserves gig workers' flexibility while allowing for the benefits and protections they want.
The gig economy is here to stay, and I love listening to people's stories of why they choose to do it. A driver for one of my recent rides on Lyft told me, "With Lyft, I'll never be broke, and I can put money away for my kid's music lessons." And just as New Orleans jazz integrated blues, ragtime, and gospel to create an entirely new American sound, we now have an opportunity to integrate the best of traditional work into a new model that serves modern workers.
About the Author
David Risher
CEO, Lyft
David Risher is the CEO of Lyft where he leads the business in improving the lives of millions of riders and drivers. He was named CEO in March 2023, after serving as a member of the Lyft board of directors since 2021. Risher has over three decades of technology and leadership experience across public companies and nonprofits. In 2009, he co-founded Worldreader, a nonprofit that has helped 21 million people read, and served as its CEO until 2023. He still serves on the Worldreader board as Founding Chair. Prior to Worldreader, Risher served as SVP, US Retail at Amazon, where he helped build the company to $4 billion in sales. Prior to Amazon, he was a general manager at Microsoft. Risher currently serves on the boards of a number of privately-held and non-profit organizations. He holds a B.A. in Comparative Literature from Princeton University, an MBA from Harvard Business, and an honorary doctorate from Wilson College.
About this Series
This is part of a series called "Back to the 'Future of Work': Revisiting the Past and Shaping the Future," curated by the Aspen Institute Future of Work Initiative. For this series, we gather insights from labor, business, academia, philanthropy, and think tanks to take stock of the past decade and attempt to divine what the next one has in store. As the future is yet unwritten, let's figure out what it takes to build a better future of work.
About the Future of Work Initiative
The Future of Work Initiative seeks to build and disseminate knowledge rooted in workers' experiences. We aim to advance policy ideas at the local, state, and federal level, backed by evidence. And we strive to build community and activate leaders to carry these conversations forward across sectors and around the globe. This initiative was founded in 2015. Recognizing the need for a comprehensive approach to building a more inclusive economy, the Future of Work Initiative integrated with the Aspen Institute Economic Opportunities Program in 2021.