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We’re Starting To See A ‘Hunger Games’ Gig-Economy Job Market

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Roughly 1.5 million Americans depend upon the gig economy to provide for their livelihood. Some people have chosen to work in gig-type work, such as driving for Uber or Lyft, shopping at supermarkets for families through Instacart, delivering food via DoorDash or offering a creative service through Upwork. 

This could either be a side hustle to bolster what they’re earning through their primary job or serve as the sole source of income. Many people have been pushed into this space due to the lack of alternatives. They’d rather hold full-time, permanent jobs with benefits, but were unable to procure appropriate opportunities.

As over 53 million Americans recently filed for unemployment, there’s an enormous overhang of people desperately seeking out new jobs. This staggering number doesn’t even capture the vast amount of people in between jobs. There are those who’ve finished collecting benefits and aren’t included in the official government data. Large numbers of people have given up looking for a job and are sitting on the sidelines. 

Some of the folks who are out of work slowed down their search, as the unemployment benefits they received were close to or even more than what they earned in their jobs. A portion of the people in between jobs decided to take a wait-and-see approach to the job market. Without appropriate jobs available, dealing with rejection, lack of feedback and getting ghosted, they’ve decided to take a break and hold off on their searches until things turn around. 

Unfortunately, there’s now more stress heaped upon the unemployed to find work, as the federal government enhanced $600 per week in unemployment benefits will end this month. In what feels like a potential Hunger Games scenario, we could foresee intense competition for opportunities, as millions of people pivot into the gig economy to put food on the table and have a roof over their heads. 

Large numbers of people are likely to swarm toward Uber, Lyft, Instacart, Amazon Flex, Fiverr, Uber Eats, DoorDash, TaskRabbit and Target’s Shipt. Adam Ozimek, chief economist at Upwork, an app connecting freelancers with gigs, has seen a 50% increase in signups.

It is Economics 101. When there are more people looking for jobs than positions available, wages will be driven downward. As greater amounts of people hit the job market, the overall hourly pay will decline. With a continuing oversupply of people desperately needing work, it will force down the wages of everyone involved. 

There will be other adverse effects. Companies will be emboldened to cut back on their expenditures on workers, in addition to lowering their pay. At the height of the Covid-19 pandemic, workers were given the necessary protections and hazard pay to compensate for the risks they were undertaking. Most, if not all, of these bonuses were withdrawn. 

This could have a ripple effect on the overall job market too. With so many people searching for jobs at the same time, corporations won’t have to worry about having to offer large salaries to entice workers to hire them. They’d be able to cut the compensation and benefits, while demanding more. This could impact both the lower end of the salary spectrum, as well as white-collar office workers. 

Instead of paying a nice, comfortable salary to a marketing or creative person in New York City or San Francisco, the company could seek out a consultant to do the work at a fraction of the pay without any long-term commitments or costly benefits required. Workers across the board will be fearful to ask for raises—out of fear of being replaced by someone less expensive or that they’d hire an outside contractor. 

This won’t bode well for the economy. With less people working and those who are earning less money and holding tenuous jobs, they won’t spend too much money. We will enter a period of austerity. This means fewer people will buy new clothes and cars, travel, go on vacations or make other expenditures. Consequently, businesses will receive less revenue, profits will fall and more people will lose their jobs.

It’s crucially important that our elected leaders figure out solutions before things deteriorate even further.

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Nile Rodgers and CHIC lined up for Belfast gig in August

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The man who wrote seminal disco anthems such as ‘Dance, Dance, Dance (Yowsah, Yowsah, Yowsah),’ ‘Everybody Dance,’ ‘Le Freak,’ ‘I Want Your Love’ and Good Times’ with CHIC, ‘He’s the Greatest Dancer,’ ‘We Are Family’ and ‘Lost in Music’ for Sister Sledge, ‘Upside Down’ and ‘I’m Coming Out’ with Diane Ross, as well as ‘Let’s Dance,’ with David Bowie, ‘Like a Virgin’ for Madonna, and ‘Get Lucky’ with Daft Punk, transcends all styles of music across every generation with a body of work that’s garnered him inductions into the Rock & Roll Hall of Fame and the Songwriters Hall of Fame.

Nile Rodgers & CHIC recently released their first new studio album, “It’s About Time” in over 26 years to critical acclaim and a Top 10 position in the UK album charts. Tickets on sale Friday June 18 at 9am from www.ticketmaster.ie & Ticketmaster outlets nationwide. Northern Ireland customers 0844 277 44 55 & Republic of Ireland customers 0818 719 300.

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Radiohead raffling off ‘Kid A’ test pressing for Gig Buddies fundraiser

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Radiohead are raffling off a test pressing of 2000’s Kid A for charity. They join Slowdive, Mogwai, Frank Turner, IDLES, Florence + The Machine, The National, Fontaines DC, Laura Marling, METZ, Melvins, Billy Nomates, Supergrass, Sharon Van Etten, BEAK>, Thee Oh Sees, Young Fathers and more in donating items to the Gig Buddies Fundraiser Raffle. It was organized by IDLES bassist Adam “Dev” Devonshire, and the description reads, “100% of proceeds from the raffle go to Gig Buddies Bristol and Gig Buddies Cymru, befriending projects that enable and empower people with learning disabilities and/or autistic people to enjoy all the great events going on in Bristol and Wales by pairing them up with new friends with similar interests to attend events with.”

“I have seen the wonderful work that Gig Buddies do,” Dev says. “It has been an honour for me to be working with them. Live music and events give us so much happiness and everyone deserves to have that joy in their lives!”

Raffle tickets are on sale now, and you can see the full list of prizes below.

In addition to the raffle, there’s also a virtual benefit concert streaming on Sunday, June 20, with music from mclusky, Katy J Pearson, Willie J Healey, TV Priest, Fenne Lily, Dogeyed and Wilderman, and stand-up comedy from Stewart Lee, Seann Walsh and Josh Weller. Tickets are on sale now.

GIG BUDDIES FUNDRAISER RAFFLE PRIZES
Radiohead – Kid A test pressing
Fender Squire Stratocaster signed by all Gig Buddies live stream performers
IDLES – signed Ultra Mono test pressing + artwork
Slowdive – guitar pedal used by Slowdive
Mogwai – signed Bardo split, Rave Tapes boxed set + As The Love Continues boxed set
Frank Turner – signed ‘Be More Kind’ test pressing
Florence and The Machine – signed book + record
The National – signed photobook + accompanying record
Fontaines DC – signed inlay photo
The Staves – signed record
The Lovely Eggs – signed ‘I Am Moron’ record + CD
Young Knives – orginal canvas by House Of Lords + signed record
Sports Team – tee shirt x2
Iain Sellar – Free tattoo + artwork print
Laura Marling – signed inlay photo
Metz – signed vinyl bundle
Orlando Weeks – Original one off artwork
Big Jeff – Print
Lee Kiernan (IDLES) – Print
Sickboy – original artwork on IDLES gig posters
Exchange – Five 2x ticket bundles to any show
2x tickets to Ritual Union 26/03/22
2x tickets to either Katy J Pearson show at The Louisiana 25/08/21 or 26/08/21
2x tickets to IDLES at Cardiff Arena
2x tickets to the sold out Paul Weller at Bath Forum show 17/11/21
BEAK> – Signed merch bundle
JOHN – God Speed in The National Limit record + signed tour poster
Traams – signed Grin record + test pressing of 4 Songs
TV Priest – Signed Uppers record
Environmental Studies Bundle ft. Julian Cope, John Paul + more
Melvins – Limited edition signed screenprint
Friendly Records – £30 store voucher + tee
Life – Signed merch bundle
Billy Nomates – Signed s/t RSD vinyl
Supergrass – Strange Ones boxed set
Mclusky signed setlists from Gig Buddies show
2x tickets to Ceremony Festival at Bedford Esquires
Fender telecaster guitar
Sharon Van Etten – signed merch bundle
Thee Oh Sees – 2x packs of 4x signed records
Young Fathers – ltd edition blue vinyl of cocoa suagr + tote bag
Declen Mckenna – 2x tickets to Brixton show 18/09/21
Klämp – Signed record + 5 t-shirts



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The Motherboard Guide to the Gig Economy

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On the Clock is Motherboard’s reporting on the organized labor movement, gig work, automation, and the future of work.

On its face, the “gig economy” seems like a simple catch-all phrase. It’s often used by a flurry of commentators, regulators, politicians, businesspeople, entrepreneurs, and academics, and it has become a vast and expansive phrase describing anything that vaguely resembles independent contract work―but through an app. 

But here’s the thing: the gig economy doesn’t actually exist. 

By skirting US labor laws, a host of companies can misclassify their workers as independent contractors, exempt them from basic rights or social welfare programs, and then pay them less than minimum wage in many cases. None of this is really new and it’s certainly not an “economy.” Rather, Silicon Valley has managed to reinvent piecework, albeit in a digital form, whereby workers are forced to work longer hours unpaid as they wait for assignments that’ll pay paltry sums. 

All of that is a mouthful to get out, so it’s been branded as the “gig economy.” An earlier iteration of the term―the “sharing economy”―failed to take hold after it became obvious that there was not much sharing going on, so much as merely renting what you own. 

“Language is important,” Sam Lipsyte pointed out in New York magazine in 2016 in an article that tracked major events during Barack Obama’s presidency, including the rise of the gig economy as a new splash of paint on old, exploitative practices. Gig companies have spent billions of dollars over the past decade not only fighting how they are regulated, but how they are talked about. At different points that has meant different things, but the goal has always been to narrow the range of acceptable debate. In doing so, gig companies have undertaken exploitative and illegal behavior over the years while distracting from how bad they are for workers, consumers, various communities, and the economy at large.

Motherboard has reported on numerous aspects of the gig economy over the years; from bathroom access, to companies’ fight to continue misclassifying workers, to driver strategies to make a living wage. And now that gig companies are looking to replicate regulatory victories such as Proposition 22 nationwide and abroad, having a grasp on the industry is more important than ever. This is Motherboard’s guide to a core group of buzzwords, phrases, talking points, and strategies deployed over the years by gig companies to advance their cause. 

*

Gig work: Loosely refers to labor arrangements where tasks are performed for money, usually via app-based interfaces that assign contracts to workers. Typically misclassified as independent contractors to avoid the labor expense of employment, even though gig companies fix the price of their labor, assign them customers, deploy algorithms or customers to surveil and evaluate workers, but also roll out policies that limit when and where work can be done.

Venture capitalist: In the gig economy world, venture capital is a form of private equity whereby investors raise funds and wield them as a weapon to enter large markets, undercut competitors through predatory or anti-competitive behavior, then profit later by raising prices or extracting monopoly rents. It’s helpful to think of VCs as a group of capitalist central planners: their entry into various markets will reorganize the operations and regulations at play, but also determine what direction technological development and resource allocation goes.

Platform: A nebulous term that is interchangeably used to refer to an app, an app-based marketplace, or an app’s parent company. It is typically deployed to add a technological gleam to gig companies’ activities and obscures that most of these firms are simply modern versions of a pre-existing business (e.g. ride-hail gig companies are taxi companies). The idea that Uber, for example, is a “rideshare platform” and not a taxi company allows them to rationalize certain arguments about the need to regulate these companies only in ways that just so happen to benefit their business.

Technology company: A buzzword at the crux of one of the oldest arguments by the gig economy, typically rolled out in Europe where labor laws are strict enough that exploits similar to those pursued in the United States are impractical. The lynchpin of this argument rests on the “platform” that matches buyers and sellers obscuring the real business model. 

Flexibility: Gig companies use this word to insist that misclassifying gig workers as independent contractors provides them with more autonomy than employment. Gig workers, however, enjoy little to no control over income, pricing, scheduling, or wages, which are unilaterally changed regularly by companies as part of regular pricing experiments. Algorithms give companies significant leeway in structuring when and how workers can perform labor on their platforms.

Algorithm: An ostensibly automated system powered by machine learning software and deployed by gig companies to streamline or optimize management decisions. Many “algorithms” actually obscure underpaid human labor that pretends to be robotic. 

Information asymmetry: Platforms, particularly gig company platforms, sit on a glut of insights about various cities, their traffic systems, working conditions, and more that are not shared with any actors outside of the company. At the same time, gig companies regularly make authoritative claims based on this unverifiable, proprietary data and algorithms when it comes to employment decisions or public policies that affect their services, communities made reliant on them, and urban transit systems that end up being forced to compete with them. 

Independent contractor: A legal classification for workers that has allowed gig companies to reduce labor costs and improve the firm’s financial health, at the expense of depriving workers of benefits, protections, and qualification for social insurance programs. At the same time, it has allowed companies to avoid scrutiny for the antitrust law by deploying it against workers who collectively bargain, accusing them of price-fixing as workers classified as contractors are technically corporations.

Independent workers: A hypothetical category of worker proposed by gig economy advocates that seeks to preserve and legally codify many of the loopholes in labor or antitrust law that companies currently exploit, while providing workers with minimal rights (e.g. right to collectively bargain without a minimum wage).

Time spent logged on: Gig workers are not paid for all the time they spend logged onto an app, because gig companies keep wait times low for customers by inflating the supply of workers via overhiring. This leads to a lot of waiting around. Instead, gig workers are paid for time spent doing a task (making a delivery or driving a passenger), ignoring the costs incurred traveling between tasks or waiting for a new assignment. Many gig company-supported estimates for average incomes ignore total time spent logged on. 

Deadhead: The industry term for the unpaid portion of gig work that comes after dropping off a person or item, but before arriving at the next pick-up. This cost typically presents as fuel and vehicle depreciation and maintenance costs for driving around without a customer, as well as unpaid time on to the app but without an assigned task―gig companies often fight to avoid wage regulations which would adequately pay drivers for this time and instead externalize the cost whenever possible.

Deactivation: An innuendo applied when workers are fired or terminated to prevent any association with the concept of employment. Decisions are unappealable in most cities, leaving drivers with no recourse if―as is often the case―a false report is filed by a rider or an algorithm monitoring driver behavior makes a mistake.  

Security systems: As working conditions continue to erode because of increasing demand and workload, surveillance systems are being introduced to maintain previous levels of production while putting the onus on drivers to remain safe as opposed to simply reducing the company’s growth. Some notable examples include Uber and Ola in Europe, as well as Amazon in the United States.

Forced arbitration: Most gig companies force consumers and workers to sign Terms of Service agreements that surrender the right to sue the company as part of a class action lawsuit. Instead, disputes are settled privately with arbitrators chosen by the companies.

Excess driver incentives: In markets where gig companies are scrambling to acquire market share, they will often pay workers more than what a customer pays for a meal or trip as part of its bid to attract or retain workers, but to also reduce wait times. In theory, these incentives go down over time but in reality they have actually grown as companies have struggled to convince workers to put in long hours for what can amount to starvation wages.

Astroturfing: A strategy adopted by gig companies to create the appearance of grass-roots support for an agenda that happens to line up with their own. Usually involves quiet, obscured, or secret funding for local groups, as well as partnerships with trusted community figures. In California, this meant payments to a firm run by the head of the state’s NAACP who then went on to support Prop 22, but in other states it usually entails much more quiet work such as deceptive mailers, grassroots groups that repeat corporate talking points, and even reportedly fabricating endorsements.

Convenience: Often, when gig companies and their advocates speak of the benefits conferred to consumers, they’ll invoke the ease with which you can have something on-demand as a cost saved by their services. What is left out of this is how much more expensive the services are when you account for where the costs actually are. Ride-hail gig platforms are seeing prices surge due to a driver surge sparked by poor safety conditions and subminimum wages during the coronavirus pandemic. Those price hikes, however, may be normal if you’re not white as ride-hail companies regularly hike prices in non-white communities. The food delivery variants are even worse as they offer delivery at a significant markup for the consumer (as high as 91 percent) and at great cost to restaurants.

Research: The gig economy’s information asymmetries affect not only consumers and workers, but regulators and independent researchers as well. Instead of transparent access to data, companies like Uber tightly control information and will selectively offer segments to teams that coincidentally affirm gig economy PR. Uber created an “academic research” program in 2014 and over the past seven years, the shop has produced claims and findings that reaffirm Uber talking points but which cannot be easily replicated or critically evaluated thanks to relevant data being deemed proprietary. 

Regulatory arbitrage: A basic strategy in which firms exploit favorable legal environments in one area to prevent less favorable ones in others, gambling that they won’t be forced to follow the law in the meantime. One recent example: when a coalition of gig companies successfully passed Proposition 22 in California, the ballot measure was repackaged and pushed in other states (Massachusetts, New York, Connecticut, Illinois, etc.) as well as other countries (e.g. Canada), in the hopes of formalizing the legislation elsewhere. Over the next few months, not only were app changes that gig companies made in California to sell the public on Proposition 22 rolled back, but new pay cuts and fare hikes that were painted as inevitable if Proposition 22 failed were introduced anyways.

Churn: Labor conditions at most gig companies are so tough that the vast majority of their workforces leave each year. At Uber, the last year we have data for (2017) suggests well over 95 percent of drivers left before the end of the year.

Competition: Gig companies are fundamentally anticompetitive and seek monopoly status, relying on billions in subsidies to operate below cost so that whoever has the deepest pockets is left standing. As a result, the real costs of operation are borne by the public (pollution, traffic congestion, degraded urban transit service), consumers (higher prices), and workers (poverty, lack of adequate physical or mental healthcare).

Driverless: Ride-hail gig companies such as Uber and Lyft once pitched the sci-fi pipe dream of autonomous taxi fleets to investors and the public as a way to please investors with zero labor costs and consumers with even cheaper services. The endeavor was abandoned by both companies after burning billions of investor capital to make little progress, but not before securing near-peak valuations in public markets. Other firms like Tesla and Instacart have followed suit, burning billions to make relatively little progress to justify higher valuations or more funding in pursuit of this moonshot project.

Amazon of transportation: A narrative once adopted by Uber to explain away persistent losses. The story went that, much like Amazon, Uber was generating historic losses because it was investing in lines of business such as driverless that would yield stupendous growth and profits in the future. Unlike Amazon, however, Uber was not a cash-positive company reinvesting its profits to fuel ravenous growth but a cash-negative firm burning cash to stay afloat. 

EBIDTA: In the words of Charlie Munger, Warren Buffett’s longtime business partner, “every time you see the word EBITDA, you should substitute the word ‘bullshit’ earnings.’” EBITDA―an acronym for earnings before interest, taxes, depreciation, and amortization―is rarely an accurate picture of a company’s actual earnings. Even so, it’s commonly used in earnings reports by gig companies such as Uber, Lyft, and DoorDash. Uber has excluded stock-based compensation, IT expenses, lobbying, accounting, and more recently expenses that emerged specifically because of the ongoing COVID-19 pandemic, from its earnings calculations to massage its earnings into a story of improving financial health.

Economies of scale: In theory, the more gig workers and consumers that are on a platform, the more useful it becomes. Perhaps wait times get lower, or more information is shed on how to optimize routes and prices based on ride-hail data, or maybe it costs less to attract or retain workers and users. The larger a gig company’s platform gets, the cheaper and more profitable it would become to operate, or so the idea goes. This theory has not panned out―in fact, operations have only gotten more expensive in the midst of price wars, litigation, marketing campaigns, lobbying efforts, and a dearth of drivers during the pandemic unwilling to work for subminimum wages.

Perpetual ride: An early dream in the gig economy of a ride-hail trip “that never ends.” Drivers would pick up a passenger, pick up another, drop off one, pick up another, drop off another and so on. Also known as a privatized bus, but this vision was more inefficient, expensive, and, most importantly, unrealistic. 

Profitability: A state where a gig company consistently earns more money than it spends. None of the major players have attained this basic milestone. Only once has Uber claimed to turn any profit at all, and that was essentially a one-time accounting entry due to the sale of its Southeast Asian and Russian units. The companies’ abysmal unit economics demand they burn billions of dollars in vicious price wars to attract and retain customers who can then be pinched with price hikes once competitors vanish. In fact, just about every S-1 filing that gig companies have made before going public warns investors that they may never, ever be profitable. 

There are countless other buzzwords and rhetorical flourishes, and this list could stretch on for pages. For nearly a decade, “gig companies” enjoyed largely little to no critical coverage outside of labor reporting and were thus able to convince the public, regulators, politicians, investors, and commentators that their PR was in fact an objective accounting of reality. Things have begun to shift over the last few years, but only as the companies are on the precipice of permanently altering the regulations that sit between them and their first profits.

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