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How Uber-type jobs are driving inequality

How Uber-type jobs are driving inequality

WASHINGTON: What­ever you call the new sector built on “platforms” that allow independent workers to find individual clients — think Uber, AirBnb, Taskrabbit, etc — you’ll probably ack­nowledge that it’s got some drawbacks.

While many of these app-based exchanges allow people to find work in ways that otherwise wouldn’t be possible, there’s mounting anecdotal evidence that those cumulative income streams don’t generate enough to make a living.

And now, there’s some statistical evidence as well. This week, a group called Req­uests for Start-ups released results from a survey of 897 people who’ve worked with 78 different companies that fall into the “on-demand economy” bucket. It’s a rough and imperfect sample, but at a time when there’s still precious little data on the characteristics of this new workforce, it gives us some idea of what they’re going through.




The topline finding: These workers’ biggest problem is making enough money. That was the most common reason for these people to drop the job they had, with 42.9 per cent saying it didn’t generate enough income. And part of that has to do with the fact that they just couldn’t get enough work, with 49.2pc of respondents saying lack of hours was their biggest “pain point.”

Of course, all those delivery drivers, room-renters, personal shoppers, movers and other odd-jobbers have other complaints. Many of them have trouble managing their finances and getting insurance for health, cars and other needs. Plenty just don’t enjoy the work.

But not making a sufficient income is a general feature of irregular work arrangements. We learned a lot more about the disparity between those and more traditional jobs on Thursday, with the release of a massive report on inequality from the Orga­ni­sa­tion for Economic Co- opera­­tion and Develop­ment.

The OECD took in statistics from 29 developed countries (not including the US) to assess just how much different forms of “non-standard” employment — from permanent part-time work to temporary full-time work — has on rising income disparity both across and within nations.

The results were definitive. Non-standard work has grown much faster than traditional employment following the economic crash of 2008, and has probably kept more people in the labour force and increased earnings in the aggregate. But it’s also clear that part-time and temporary work pays less on an hourly basis, especially for young people and those with less education.

Starting out by making less can impact a worker’s long-term earning potential, which the developed world will start to feel down the road. And it’s fuelling rising inequality right now.

So what do we do about the increasing number of irregular jobs out there, in the on-demand economy or otherwise?

The OECD says it’s not necessarily a good idea to try to get rid of them. Lots of people like working outside a normal 9 to 5, for various reasons: Part-time work can allow one parent in a household to remain in the labour market rather than dropping out entirely, for example, while the other parent works full time.

By arrangement with Wash­ing­­ton Post-Bloomberg News Service

Published in Dawn, May 24th, 2015

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