Jobless claims that just came in were a bit higher
than expected that the labor-market remains tight and unemployment still
at historic lows that coupled with inflation means more workers
might be turning to the gig economy are turning back
to the gig economy according to a new survey from
the branch from branch and marquette to 85% of workers
have increased or plan to increase the amount of gig
work in the past six months with 58% citing inflation
as the reason behind this change here. To discuss
the Baron Sunder rajan professor at N. Y.
U. Stern School of Business Sharon, how is
inflation kind of driving this return back to the gig
economy? Certainly the gig economy that we saw pre
pandemic um I think that there's a number of reasons
um Normally when people seek out gig work it's for
one of four reasons. Um They either can't find
regular work supply or their expenses have gone up demand
or they're opportunistic. They say hey let's make some
more money or they're looking for a more flexible work
schedule. And so that's sort of the preference dimension
. I think we're seeing a lot of 23 and
four here um inflation is rampant and people need more
money, salary, wages haven't kept up. Um
Plus the labor market is tight, People can't find
full time employees, employers can't find full time employees
. And so some people are being opportunistic. And
I also think there's a covid effect because people have
gotten used to more flexibility and time and space um
through the like, you know months of the lockdown
. And so they're looking for work arrangements that are
more consistent with those new preferences. Speaking of kind
of a covid effect here and, and with the
tight labor market, I'm curious if there is maybe
an additional effect happening here with the reality that so
many more people are in this hybrid work model or
are purely kind of working remotely still does that offer
them more bandwidth because they're not commuting to work to
be able to take on, you know, a
second job or, or gig kind of, you
know, roll gig jobs, so to speak,
your side hustle. Um, in order to kind
of have that extra income amid the inflationary pressures is
that kind of also uniquely happening now. Absolutely.
I mean, I think it's happening in a couple
of different ways. Um, we've certainly freed up
time that we used to spend getting to work.
I'm not sure this is a great thing, but
we're also freed up time that we used to spend
hanging out with our colleagues and um, you know
, sort of socializing with them after work. There's
less of that happening now. And so people certainly
have more bandwidth. Um, but I think it's
also that companies had to adapt how they work during
the lockdown and so they've reorganized the way they work
to be able to take in these remotely located people
more easily. And so the entire structure of how
we bring labor into like, you know, processes
has changed because of covid and that makes it much
more amenable for platform based gig work and for short
bursts of labor rather than the 9 to 5 that
we were used to like, you know, in
the 20th century, the survey that we mentioned,
kind of at the top of this segment also found
that traditional pay cycles are increasingly outdated for today's workers
. I'm curious to that extent, especially to the
extent that we see the great resignation happening. How
can, you know, payment schedules be better adapted
to fit kind of just a modern day worker needs
? Well, um, I think we've made a
lot of progress for freelance workers on a number of
different fronts. I mean, freelance workers have historically
gotten stiffed a lot. I think 70% of freelance
workers in New York City reports that they have not
gotten paid at some point for their freelance work.
And so I think when platforms started to mediate this
freelance work, that solved a lot of that uncertainty
, but there is still a lot of volatility that
gig workers face, you know, when you're a
salaried employee, you know, how much money you're
getting every month or every week. Um and so
you don't face the kind of short term and long
term volatility, like, you know, I will
, I be earning in 15 years, can I
take a mortgage? And so um certainly there's um
you know, on the one hand a step forward
towards guaranteeing that if you do the gig work you
get paid. Um There's something of a shift away
from traditional pay cycles and towards like you know where
we were sort of this instagram facebook sort of I
want it now generation. Right, instant gratification.
Yeah, that that that certainly seems to feel like
the generation and in modern times now really quickly before
I have to let you go here, I'm just
interested and curious How does the rise in the gig
economy or the return of the gig economy impact the
broader economy? Because the first thing I think about
is just a number of jobs out there and the
number of employees out there and by some accounts,
I mean it's a 2-1 ratio. I would think
it almost benefits kind of the macroeconomic picture if people
can take on two jobs. Absolutely. I mean
, I think there are a number of positive effects
from making gig work easier. As you point out
, you know, there are unfilled jobs and you
know, if we can fill them with gig work
that makes the economy tick. I think a lot
of work that might not have otherwise gotten done um
where it's not like someone has posted a job,
but it's not something they would have considered doing in
the past because there's not enough work to hire a
full time employee. A lot of that stuff gets
done whether it's digital marketing or home improvement. And
so gig work in general raises economic activity and this
is good for the economy. We have to leave
it. There were coming up against the bell,
but really appreciate your time maroon Sunder, rajan,
professor at N. Y. U. Stern School
of Business.