The Micro-Gig Economy: Flexibility or Exploitation?

The economy continues to evolve away from stable, full-time job opportunities toward freelancing and part-time work, especially in the aftermath of the recession.

Technology allows many tasks to be done from anywhere, and companies are eager to cut corners on payroll. This has given rise to “micro-gigs,” bite-sized work tasks paid in bite-sized dollar amounts. While an economy of one-off errands has always existed, and was amplified by the rise of the Internet and sites like Craigslist, now entire platforms dedicated to micro-gigs are gaining popularity.

Amazon’s Mechanical Turk service, for example, allows people to offer pennies for very quick computer-based tasks. For the workers, though, even producing rapid results does not add up to much income: estimates of the hourly take-home of a Mechanical Turk contractor vary, from $1.20 to $5/hour. While approximately 40% of the workers are based in India, where such rates are less brutal than they would be in the United States (relative to cost-of-living), 50% of Mechanical Turk contractors are American. It is alarming to imagine trying to live on those wages. As UMass professor of economics Nancy Folbre points out,

Workers relying on such low wages and unstable employment are not likely to be able to educate their children enough to escape increasingly high rates of unemployment. A sustainable form of crowdsourcing will require forms of collective governance that mitigate the effects of market competition on those treated as mere links in a chain of algorithmic logic.

In other words, it will require some assurance of human rights, including access to decent employment, living wages and high-quality public education.

A rare bright spot for freelancers without benefits: the Freelancers Union is growing, and successfully providing health insurance to such workers.

Sara Horowitz, the founder of the Freelancers Union, wrote this week about TaskRabbit, a micro-gig platform on which “[p]utting together Ikea furniture is one of the site’s most popular listings”—a task that pays an average of $42.

As Horowitz points out, the gig economy risks turning back the clock on working conditions:

As we rush forward into this hyper-efficient economy, we’re actually sliding back to certain aspects of the 19th century, where workers had few rights and no protections.

[….]

In the micro-gig economy, there might be fewer abusive managers, better working conditions, and more autonomy than turn-of-the-century industrial workers suffered through. But the micro-gig economy also represents a U-Turn in labor, where many people are once again working without a net—and taking on a level of risk not seen in more than 100 years.

(Emphasis added.)

Proper freelancers are legally exposed to the risks of not having benefits; however, many firms illegally misclassify their employees as contractors in order to lower costs. Contact The Harman Firm today if you have any questions about employee classification, overtime, or another area of employment law.