What is the “gig economy” doing to us?
Photo: Elisa Riva. Source: Pixabay
More and more people today are independent contractors—about a third of the US economy. Apps like Uber and Airbnb make it even easier to work for yourself. Uber makes it possible for folks with a set of wheels and some extra time to make money on their schedule, when they want to. Airbnb allows people to rent out their extra room or vacation home. Underutilized assets get monetized, and services become commodities.
But as the working world becomes more flexible, our relationships with each other break down. When we change jobs every few weeks, we don’t have as much incentive to be nice. The economy becomes depersonalized. It’s as if we all live in a big city, where we’re unlikely to run into the same folks again. Why invest the time and effort in developing a relationship of trust if the parties are going to change every other week?
There’s no question that the gig economy is growing. And there are a lot of initiatives out there to help gig workers obtain benefits like health and disability insurance. But a bigger challenge may be what contract employment is doing to our relationships. As the economy becomes more efficient and more of our exchanges become one-shot interactions, investing in cooperative behavior becomes prohibitively expensive.
The same sort of concern was voiced over 100 years ago when assembly line manufacturing replaced artisanal production. Our cities grew, while small towns struggled. Output increased and society became richer, but at what cost? We all need long term relationships where they can trust other people and be trusted by them. The gig economy may be rational, but it may not be very healthy.
Douglas R. Tengdin, CFA
Chief Investment Officer