Reprinted from Robert Reich Blog
As Labor Day looms, more Americans than ever don't know how much they'll be earning next week or even tomorrow.
This varied group includes independent contractors, temporary workers, the self-employed, part-timers, freelancers, and free agents. Most file 1099s rather than W2s, for tax purposes.
On demand and on call -- in the "share" economy, the "gig" economy, or, more prosaically, the "irregular" economy -- the result is the same: no predictable earnings or hours.
It's the biggest change in the American workforce in over a century, and it's happening at lightening speed. It's estimated that in five years over 40 percent of the American labor force will have uncertain work; in a decade, most of us.
Increasingly, businesses need only a relatively small pool of "talent" anchored in the enterprise -- innovators and strategists responsible for the firm's unique competitive strength.
Everyone else is becoming fungible, sought only for their reliability and low cost.
Complex algorithms can now determine who's needed to do what and when, and then measure the quality of what's produced. Reliability can be measured in experience ratings. Software can seamlessly handle all transactions -- contracts, billing, payments, taxes.
All this allows businesses to be highly nimble -- immediately responsive to changes in consumer preferences, overall demand, and technologies.
While shifting all the risks of such changes to workers.
Whether we're software programmers, journalists, Uber drivers, stenographers, child care workers, TaskRabbits, beauticians, plumbers, Airbnb'rs, adjunct professors, or contract nurses -- increasingly, we're on our own.
And what we're paid, here and now, depends on what we're worth here and now -- in a spot-auction market that's rapidly substituting for the old labor market where people held jobs that paid regular salaries and wages.
Even giant corporations are devolving into spot-auction networks. Amazon's algorithms evaluate and pay workers for exactly what they contribute.
Apple directly employs fewer than 10 percent of the 1 million workers who design, make and sell iMacs and iPhones.
This giant risk-shift doesn't necessarily mean lower pay. Contract workers typically make around $18 an hour, comparable to what they earned as "employees."
Uber and other ride-share drivers earn around $25 per hour, more than double what the typical taxi driver takes home.