The Hookup Economy

You hear a lot about the “sharing economy” these days, but I think I’ve found a better term: the hookup economy. A job used to be like a relatively stable relationship between two parties, but nowadays many work arrangements are more like a hookup. The matches between employers and workers are made on the fly, there’s zero commitment from either party, and the connection is fleeting.

It’s hard to criticize Uber and Lyft on this account, because the relationship between a conventional taxi driver and a passenger was always ad hoc and short-lived. The same might be said about ZTailors, launched this week by George Zimmer (who used to tell you that “You’re going to like the way you look—I guarantee it”), which hooks up tailors with customers. But each week brings another Tinder-like app that matches up employers and workers, and some of these are meant to arrange work that used to be done by full-time payroll employees.

For example, Universal Avenue, a Swedish startup, helps businesses recruit salesworkers who work as freelancers. UpWork, Freelancer.com, and Guru.com are matchmakers for workers of many kinds, including designers, writers, engineers, and programmers. TaskRabbit lets you find workers for tasks that may not even fit comfortably into any occupation title, such as assembling IKEA furniture.

In favor of this trend, one might argue that the freelancers who work this way get paid for their time and (where relevant) skills, and they can have a flexible work schedule.

On the other hand, there are legal protections that one expects in an employer-employee relationship that are missing in these hookup work situations. Compared to a payroll employee, a hookup worker has much less legal protection from sexual harassment, racial or age discrimination, or a hazardous work environment (when the work is done on-site).

Listed on one’s resume, this kind of work also does not make much of an impression. This is less of a liability for designers, writers, and other workers who tend to display their output in a portfolio. But for most workers, a spell of doing hookup projects can look like unemployment on a resume.

Of course, doing this kind of work is better than having no income. And in today’s economy, this may be the only kind of work that some people can find. People who are downsized in their 50s or early 60s often have a particularly hard time finding an employer willing to take them on for a payroll job. So I think that hookup work is here to stay.

The Changing Expectations of Employers and Employees

As teenagers turn into adults, they and their parents need to renegotiate the terms of their relationship. The parents have to let go of the control that they had over their children’s’ lives, and the new adults have to learn how to fend for themselves without the parental safety net. The transition usually takes several years, during which there are always awkward, even painful moments when the two parties’ expectations don’t totally match.

Something similar has happened as the employer-employee relationship has changed in recent decades. Traditionally, employers have had certain expectations for their employees: high-quality work output, low absenteeism, a good attitude, and reasonable cost. Employees have had their own expectations: a reasonably good work environment, respect, steady employment, and at least a living wages. Starting in the late 1970s, these expectations began to weaken or even fall away, but during this period of transition, the two parties have often found their expectations were not in synch.

The first big dislocation was the wave of downsizing that began in the 1970s and 1980s. Companies decided that their need to contain costs was more important than meeting their employees’ expectation of steady work. Loyalty became a thing of the past. In making this move, employees banked on the notion that the quality of work output would not diminish with employees’ loss of security. My generation, the Baby Boomers, never completely adjusted to the new reality. Books like What Color is Your Parachute? taught many of us how to deal with this situation, but we did not and still largely do not accept that this is the way jobs ought to be. Our expectations are stuck in the model of the 1950s and 1960s economy.

However, it’s also true that many employers did not fully appreciate how they had changed the nature of the relationship. I experienced this when I returned as a consultant to work for a company where I had been downsized after many years as a salaried employee. The company presented me with a contract that included a two-year noncompetition clause. I was flabbergasted. The company was saying, in effect, that they had no loyalty to me but that I had to be 100 percent loyal to them. I refused to sign the contract unless that clause was removed. They needed my skills badly enough that they conceded on this point.

In the 1990s, automation killed off some jobs but added so much productivity to other jobs that the economy as a whole did very well, so the employer-employee relationship did not change greatly. But as the century turned, computers got smarter and began to displace more workers and, worse yet, globalization resulted in the offshoring of hundreds of thousands of manufacturing jobs. Employers were happy with the reduced cost of foreign workers and the quality of their work, while the absenteeism and attitude of these foreign workers were somebody else’s problem. To find steady work, many former employees of manufacturing jobs now had to shift to service jobs and lower their expectations for the work environment, for respect, and even for living wages.

The latest dislocation is the arrival of what is often called on-demand work or the “Uberization” of the workforce. Technology now makes it possible for employers to take on workers for assignments that last only a few hours or less. The work may be driving passengers for Uber or Lyft, performing cleaning or other home services for Handy (formerly Handybook), or doing almost any kind of low- to moderate-skill task for TaskRabbit or Mechanical Turk. By using these temporary workers, who are classified as independent contractors rather than employees, employers can still meet their expectations for low cost, and customer feedback about individual workers ensures that the quality of work output and perhaps workers’ displayed attitude will not suffer. Absenteeism is not a problem as long as there is a sufficient pool of interchangeable workers. Some workers are able to earn better than a living wage in these arrangements, but many do not, and few can count on steady employment or respect in this relationship.

It is possible that many workers have become so beaten down, especially following the Great Recession, that they have lowered their expectations to the point where they can accept this new relationship. But several lawsuits are revealing small but significant instances in which employers’ expectations are out of synch with the realities of using on-demand workers. Last year, FedEx drivers won an appeals court ruling that they are not independent contractors, because the employer requires them to wear company uniforms, drive company vehicles, and maintain company standards for grooming. A current lawsuit against Handy makes a similar argument, stating that the employer does not treat its workers as contractors because it requires them to adhere to strict guidelines on matters such as what clothes to wear, when to ring customers’ doorbells, when to listen to music, and how to use the bathroom. Still another lawsuit, this one also against Handy, happened when the company stopped using a contractor because she subcontracted the work to her sister.

In the traditional employer-employee relationship, the worker’s expectations of good work conditions and a living wage were guaranteed by laws that governed workplace safety, minimum wage, overtime pay, Social Security payments, unemployment insurance, and the right to unionization. These laws mostly do not apply to on-demand work situations. On-demand workers may also face new kinds of liabilities. For example, when I was a full-time employee and drove from my office to a meeting at another site, my employer provided insurance coverage for the trip. Uber drivers, on the other hand, are insured by Uber only for the time when they have a passenger in their car; they are not covered when they drive to, from, or between assignments.

Perhaps what is needed is a new category of worker, “dependent contractor,” who would have some protections that independent contractors lack. A court in Canada ruled that this kind of worker has the right to reasonable notice of termination. Germany recognizes several rights for these workers.

Can the United States protect on-demand workers? I am pessimistic. The major constituencies that influence workplace policy are the corporations and the unions. Most corporations are not interested in making these concessions to workers, and few on-demand workers are union members.

A New Skill is Identified: Shopping

Recently I read about a new business, called Instacart, that does your grocery shopping for you. This is different from well-established grocery services, such as Peapod and FreshDirect, because the company owns no food warehouses or trucks, and you don’t have to place your orders many hours in advance. Instead, mere minutes after you place your order on the Web, Instacart enlists someone in your community—an independent contractor, not an employee—to go to one or more existing food stores, buy what you ordered, and deliver it to you in the contractor’s own car.

The shoppers earn between $15 and $30 per hour, depending on how fast they deliver the goods. This is considerably better pay than most jobs at a supermarket, but (like so many work arrangements that the new economy is creating) the work offers no fringe benefits. It is also not likely to provide full-time work, although for some people that’s an advantage.

Instacart makes its profits by charging a flat delivery fee ($3.99 for most orders), plus a markup on the store’s prices. One estimate is that the markup averages about 20 percent.

In some ways, this work arrangement resembles the ride-sharing services Uber and Lyft, in that it uses the Web to match consumers of a service with fairly ordinary people who have that service to offer. One important difference is that the service that Instacart offers—shopping—is not regulated, as taxicab transportation is. Instacart also is unlikely to displace many existing workers, because there are very few professional grocery shoppers, certainly compared to cab drivers.

The work does not require any formal credentials, but it does require a skill that you will probably not find in any existing skill taxonomies: shopping skill. My shopping skill was tested recently when my mother was incapacitated by a hip fracture and I had to buy her groceries. Unlike an Instacart shopper, I was tasked with the additional goal of finding the best prices. As a child of the Depression, my mother knows the going prices of nearly every item she customarily buys at several markets in her Manhattan neighborhood, including the open-air green market in Union Square. Instacart clients don’t require this kind of accountability.

However, Instacart clients do expect speed. This means that the shoppers must know what stores stock a wide range of grocery items and have them in high quality, plus where the items are located in the store. Every year about this time, when summer berries and fruit come ripe, I wander helplessly through the aisles of my local supermarket, trying to find the Sure-Jell pectin for making jams. Is it in the aisle with cooking supplies? Gelatin? Seasonal items? I’m never sure, and even the clerks (if you can find one) sometimes send me to the wrong aisle.

It will be interesting to see whether this kind of work continues to expand beyond ride-sharing and grocery-shopping. Tyler Cowen, an economist at George Mason University, sees the bright side of this trend: “When you ask what kind of niches we’ll see for people who used to be in traditional middle-class jobs, this is the kind of labor that could fit into that. I wouldn’t want to suggest people will become grocery-delivery millionaires, but if you don’t have a college education but you’re smart and responsible, could you make a living doing this and maybe piecing it together with some of these other kinds of jobs? Absolutely.”

I’m not so sanguine about this trend. It reminds me of the old joke that there will always be work because people can do each other’s laundry. That’s true, but as our economy relies more and more on imported manufactured goods, we need to find work that leads to exports.

Occupations with Many Part-Time Workers

People work part-time for many reasons. Some can’t find a full-time job. Some need a lot of free time for nonwork responsibilities, such as school or care for a dependent child or parent. Some use this work arrangement as a way to try out a career or to break into one; others use it to gradually back out of a career into retirement. Still others combine it with another job (perhaps also part-time) that doesn’t pay enough.

After 2006, the Bureau of Labor Statistics stopped publishing figures about the percentage of part-time workers in each occupation. However, these percentages are unlikely to have changed greatly. That’s why the following table is probably still accurate in its selection of occupations with more than 50 percent part-time workers, based on 2006 figures.

The figures for employment 2008 are for all workers, not just part-timers (but you can do the math with the percentage of part-timers to get a rough idea of how many there are). The figures for projected growth, projected annual job openings, and median annual earnings are also for all workers. Note that part-timers in most occupations earn a lower hourly rate than do full-time workers. The exceptions are a few highly-skilled health-care occupations, in which the part-timers tend to be night-shift workers, who earn a premium.

Dental Hygienists is the obvious winner in terms of both earnings and job growth, and it’s also the one requiring the highest level of skill. The occupations with the highest number of job openings have both a large workforce size and a lot of turnover. Most of these occupations tend to be held by younger workers. In some cases, there are physical demands that young people can more easily meet (e.g., Models or Lifeguards, Ski Patrol, and Other Recreational Protective Service Workers). In other cases, the low pay and low skill requirements make the job attractive to young people with limited work experience and low income needs.

The main exception is Crossing Guards, which attracts many retirees. Municipalities like to hire them partly because they can be trusted with greater responsibility than younger workers. They enjoy the ability to find part-time work within walking distance of home. In addition, their roots in the community allow them to learn about job openings.

[Note: On some browsers, you may have to scroll down a bit to see the table.]

Title	Empl 2008	Part- Time	Growth 2008- 2018	Annual Job Openings	Median Earnings 2009
Library Technicians	120,560	65.0%	8.8%	6,470	$29,570
Hosts and Hostesses, Restaurant, Lounge, and Coffee Shop	350,680	63.9%	6.5%	26,680	$18,110
Crossing Guards	69,930	62.0%	9.4%	2,560	$23,390
Counter Attendants, Cafeteria, Food Concession, and Coffee Shop	525,400	60.9%	9.3%	43,490	$18,180
Dental Hygienists	174,060	58.7%	36.1%	9,840	$67,340
Demonstrators and Product Promoters	102,790	56.1%	7.1%	3,690	$22,510
Models	2,240	56.1%	16.0%	100	$27,330
Lifeguards, Ski Patrol, and Other Recreational Protective Service Workers	115,230	55.3%	11.2%	9,080	$18,700
Protective Service Workers, All Other	87,680	55.3%	14.0%	7,150	$29,420
Library Assistants, Clerical	121,980	52.5%	11.1%	6,420	$22,980
Ushers, Lobby Attendants, and Ticket Takers	106,120	52.4%	13.7%	8,190	$18,050
Motion Picture Projectionists	10,830	52.4%	0.6%	470	$20,420
Dining Room and Cafeteria Attendants and Bartender Helpers	420,650	50.6%	5.5%	20,570	$17,700