Your Next Gig

What is the “gig economy”?

Photo: Roger Wallenberg. Source: Department of Defense

A “gig” is a short-term contract for a performer. An assistant professor in Music Studies at Dartmouth complained once that he’d never find another gig like the one he had in Hanover.

When people use the term now to describe the economy, they’re referring to the fact that more and more people are independent contractors – about 10% of today’s workforce. Apps on your smartphone like Uber and Airbnb make it simple to work for ourselves. With Uber, all you need is a set of wheels and some extra time to make a little extra money to. One US Senator moonlights as an Uber driver in his home state, just to get out of his bubble. Airbnb allows anyone to rent out an extra room or basement for folks who need a cheap place to stay. Excess assets are turned into sources of income, and services become commodities.

Source: Google Ngram

But as the working world becomes more flexible, our relationships with each other can break down. If we change jobs every couple 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 gig’s 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 less common. There just isn’t the incentive

The same sort of concern was voiced over 100 years ago when assembly line manufacturing replaced artisanal production. Our cities grew, but small towns became stagnant. Output went up and society became richer, but what was the cost? We need long term relationships where we can trust and be trusted by other people. The modern economy may add a lot of jobs, but it may not be all that good for our relationships.

Douglas R. Tengdin, CFA

Charter Trust Company

“The Best Trust Company in New England”

By |2019-10-02T07:37:56-04:00September 17th, 2019|Global Market Update|Comments Off on Your Next Gig

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