The gig economy has been hyped. It poses as the labor market’s new reality. It isn’t. The new reality is how the old reality is being remade. We don’t really know why this happened. A plausible explanation is that the multiplication of alternative work arrangements was a consequence of the Great Recession, which created mass unemployment and shifted bargaining power to companies. People desperate for work can’t be too picky in their choices. Employers seized the opportunities to cut costs.
What’s needed is a check on potential employer abuse. The good news is that U.S. workers may be retrieving some of their lost bargaining power. The supply-and-demand dynamics for labor look more favorable. As the recovery has continued, the unemployed pool has shrunk. In August, the jobless rate was 4.9 percent, down from a peak of 10 percent. In addition, the retirement of baby boomers reinforces the competition for good workers, exerting upward pressure on wages and giving workers more choice.
Other forces push in the same direction. Immigration seems likely to abate. The huge influx of women into the paid labor market seems to have crested. All this shifts the bargaining advantage to workers. It is unlikely to be offset by the advent of more robots, another trend that has been hyped.
Read it all.
(Wash Post) Robert Samuelson–A new era of labor scarcity?
The gig economy has been hyped. It poses as the labor market’s new reality. It isn’t. The new reality is how the old reality is being remade. We don’t really know why this happened. A plausible explanation is that the multiplication of alternative work arrangements was a consequence of the Great Recession, which created mass unemployment and shifted bargaining power to companies. People desperate for work can’t be too picky in their choices. Employers seized the opportunities to cut costs.
What’s needed is a check on potential employer abuse. The good news is that U.S. workers may be retrieving some of their lost bargaining power. The supply-and-demand dynamics for labor look more favorable. As the recovery has continued, the unemployed pool has shrunk. In August, the jobless rate was 4.9 percent, down from a peak of 10 percent. In addition, the retirement of baby boomers reinforces the competition for good workers, exerting upward pressure on wages and giving workers more choice.
Other forces push in the same direction. Immigration seems likely to abate. The huge influx of women into the paid labor market seems to have crested. All this shifts the bargaining advantage to workers. It is unlikely to be offset by the advent of more robots, another trend that has been hyped.
Read it all.