It’s 2019. Why Isn’t Everyone Driving for Uber Yet?

Reports on the death of traditional employment have been greatly exaggerated in some quarters. After the U.S. Bureau of Labor Statistics found that the number of jobs associated with the so-called “gig economy” had actually declined between 2005 and 2017, researchers Lawrence F. Katz and the late Alan Krueger revised their 2016 study that trumpeted the rise of alternative work arrangements.

In a follow-up published this past January, Katz and Krueger found that the gig economy had grown only modestly between 2005 and 2017—slightly more than 10%, rather than upwards of 16% over the 12-year period as they originally predicted. Other economists came to the same conclusion.

What happened—or, more properly, what didn’t happen to traditional work arrangements? In the view of blogger Kevin Drum, a misreading of the numbers made the gig economy appear stronger than it was.

Writing on the Mother Jones website, Drum noted that in the years following the global financial crisis, hiring was slow to recover. Therefore, he wrote, “a lot of gig-economy activity was odd jobs that people took up to make ends meet. As the economy returned to normal, they returned to more familiar work arrangements.”

Furthermore, the surveys used to gauge the scope of alternative-work arrangements remain “riddled with flaws,” wrote Drum. The U.S. Labor Department “does a poor job of accounting for people with multiple jobs.”

Some would argue that the gig economy is actually closer to historic norms in the U.S. Up until early in the past century, near half of Americans were self-employed, often as farmers. By 1960, though, around 85% were employees of companies.

As NPR reported recently, one factor in the rise of the corporation was the comparative ease and lack of expense in transacting business within the organization.

“You can quickly walk to your colleague’s desk and share ideas without having to figure out if they’re shady,” wrote NPR’s Greg Rosalsky. “You can share resources, tools, and machinery. You can work in a team and specialize in different tasks. And you can do this all without having to continually negotiate over the price of everything.”

One economist who argues that the gig economy will eventually prevail in spite of naysayers’ views to the contrary is NYU Stern’s Arun Sundararajan. Author of “The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism,” Sundararajan believes the gig economy—specifically, work done through digital platforms like Uber and Airbnb —will conquer traditional employment.

Instead of an economy dominated by big corporations, he believes that in the future, it will be dominated by “a crowd” of self-employed entrepreneurs and workers who transact with customers through digital platforms.

“We are in the early days of a fundamental reorganization of the economy,” Sundararajan told NPR. The NPR writer noted that Sundararajan told him this while riding to the airport via Uber.

For comments, questions or concerns, please contact Paul Bubny