At the end of March, Lawrence Katz and Alan Krueger, two Ivy League economists, published a brief paper intended to verify, discredit, or add some complexity to the noise around the emergence of the so-called “gig economy.” Since we’ve been paying attention to that noise (and may have created a bit of it as well), their findings were of particular interest.

And those findings were:

The percentage of workers engaged in alternative work arrangements—defined as temporary help agency workers, on-call workers, contract company workers, and independent contractors or freelancers—rose from 10.1 percent in February 2005 to 15.8 percent in late 2015.

On its own, this statistic is interesting but not remarkable. But, when placed in the context of relatively weak job growth over the same period in what Katz and Krueger call “standard employment arrangements”—and further, the fact that the increase in alternative work arrangements between 1995 and 2005 was negligible—Katz and Krueger come to a remarkable conclusion. Though they state it tentatively, the claim is bold and surprising: “All of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.”

When Katz and Krueger pushed further into their dataset they found that this dramatic rise in contingent work cannot be credibly attributed to the rise of platform-based economic arrangements (driving for Uber, etc.). In fact, even though it is growing quite rapidly, they conclude that the “the online gig workforce is relatively small compared to other forms of alternative work arrangements.” The most common alternative work arrangements are either independent contractors or contract laborers, each of which grew substantially as a portion of the total labor market in the past ten years.

 

What does this mean for work in our current moment in American history? That is—what does it mean to have a “good job” in America today?

This is the question Arne Kalleberg, a sociologist from UNC-Chapel Hill, takes up in his 2011 work, Good Jobs, Bad Jobs: The Rise of Polarized and Precarious Employment Systems in the United States, 1970s to 2000s. The essential word in the title is the easiest to overlook: systems. As Kalleberg puts it, the essential change in work in America is not about any particular industry or kind of work; it is, rather, a fundamental reconfiguration of the relation of labor to capital. As Kalleberg puts it:

A social contract between labor and capital existed from the end of World War II until the 1970s. This social contract, or capital–labor accord, institutionalized the mutual expectations and obligations for work and employment relationships held by workers, employers, and their communities. Workers received fairly secure and well-paid jobs in exchange for labor peace and productivity. Large companies in mass manufacturing industries enjoyed considerable market power, and so were able to maintain high profits and still treat labor as a fixed cost of production by passing on their high labor costs to consumers (22-23).

The old bargain between labor and capital—sweat for security—has been called off.

This accord between labor and capital contributed to what social theorists call an “age of security,” or the “Pax Americana.” According to Kalleberg, what has replaced this age of security is an “age of flexibility,” marked by wide disparities in job quality and precariousness across the labor market as a whole. The old bargain between labor and capital—sweat for security—has, for all intents and purposes, been called off. And what is left in its place is a polarized labor market, divided between those highly skilled laborers for whom “flexibility” is a perk, and the many others for whom it is a serious obstacle to financial security.

Kalleberg explains the differences between a good job and bad job like this: A good job provides relatively high wages, opportunities for increased wages over time, adequate health insurance and retirement benefits, opportunities for autonomy in work activities, flexibility over scheduling and terms of employment, and some control over the termination of the job. A bad job, on the other had, provides low wages, no increased wages over time, no fringe benefits, no control over work activities, no flexibility to deal with non-work issues, and no control over the termination of the job.

In his description of the polarization that has taken place within the labor markets, Kalleberg shows that the distance between a good job and a bad job is often vast and difficult to traverse without substantial retraining or education. In times of economic insecurity, the most vulnerable positions are so-called “semiskilled, well-paying” jobs in the “subordinate primary labor market”; and short of dramatic social changes, a reinvigorated labor reform movement, or newfound sources of capital, it is hard to see how job security of this segment of the population will become any less precarious. This is the significance of flexibility in work: it is remarkably beneficial for highly skilled workers who desire to coach their children’s sports teams in the afternoon and are willing to return to their inboxes in the evenings and early mornings, and highly unfortunate for workers at the other end of the spectrum who want steady, well-paid, and predictable (that is, non-flexible) work.

 

Let me illustrate the point. I read most of Kalleberg’s account of the dramatic shifts in the labor market from the comfort of a chair in one of Charlottesville’s finest coffee shops, Shenandoah Joe. I did so, in part, because my work affords me such luxuries—and, when possible, I take full advantage.

One morning, a few minutes after plopping myself in a comfortable chair, a seemingly new mom sat down on the couch across from me. Her baby of no more than two months rested quietly, fully strapped into her car seat, sucking on a pacifier, and staring at one of those toys no parent remembers buying (but every parent has). The mother wore a pink shirt and pearl earrings, conveying a degree of control over her immediate circumstances that most of us envy. Her blue-blazered husband followed shortly thereafter.

As they sipped their iced coffees (decaf, no doubt), an older woman came and sat in the chair across from them. Her shoes were built for comfort—the kind of nondescript style built for workers who spend substantial time on their feet—and her shirt indicated “care-worker.” When she placed a two-page resume on the table in front of the woman in pink and her husband, it all became clear: this was a job interview. “I’ve not been a nanny before,” was nearly the last thing I heard her say before I pulled out my oversized headphones to avoid hearing too much. “I was a teacher for many years, but was recently let go. I thought this could be a good arrangement,” she continued—“I love kids and would be happy to help your family.”

Though I could no longer hear them, when I looked up from my copy of Good Jobs: Bad Jobs, I didn’t really need to. Unveiled before me were the twin facts that, 1) given the paltry family leave policies of most American companies and the likelihood that the parents live at some distance from their extended family, this prospective nanny has more leverage over her prospective employers than she realizes, and 2) due to an increasing number of workers who have been forcibly “flexibilized” by the end of the “age of security,” these parents could likely spend all day interviewing ex-somethings now looking for work.

This scenario shows just how a new relationship between labor and capital is being forged in our time. The rise of the contingent worker and contract work is likely to continue, and, as we now know from executives of platform-based companies like Uber, the gig-economy is intended to supplement rather than replace workers’ income. But the question is: will there be something stable that is being supplemented? For those who receive it as such, the gift of this new economic arrangement is increased flexibility and control over the nature and timing of labor.  The shadow side of flexibility, however, is widespread instability and a widening gap between highly skilled workers and everyone else.

 


As always, we welcome your feedback, pushback, kudos, and ideas. You can reach Philip at plorish@newcitycommons.com.