Unions Vs. the New Economy (Part 1): The Boss of Me (Is Me)

Posted by Alison Basley on Tuesday, May 24th, 2016 at 4:36 pm - Permalink

New economy creating endless opportunities for self-employment

The traditional hierarchical structure of the workplace created a need for mitigation parties such as the government, lawyers and unions. Now, the sharing economy is creating mobile mini-entrepreneurs, making workplace conflict less likely and rendering regulators and third-party negotiators useless.

Critics of the sharing economy, such as Senator Elizabeth Warren (D-MA), say that this app-driven employment is bad for workers because it doesn’t provide them with benefits or protections. But this trade-off for flexibility and autonomy seems to be worth it for a growing number of participants, especially Uber drivers.

TaskRabbit (an app for finding a handyman) is another attractive platform for gig workers. They introduced a wage floor, making it impossible for workers to earn less than $12.80 an hour. That’s higher than any state minimum wage in the U.S. Some platforms are even looking at how they can give gig workers equity in the company.

With greater opportunities to earn extra income, more individuals are able to take entrepreneurial risks they wouldn’t have taken otherwise. Platforms such as Etsy can now give a single mother the boost in savings she needed to start an at-home sewing business.

According to a Burson-Marsteller and Aspen Institute Future of Work Initiative poll sponsored by TIME, 44 percent of U.S. adults have participated in the sharing economy as a lender, borrower, driver, rider, host, or guest. In fact, 71 percent of these 45 million people describe their experiences in this new economy as “positive.”

Because of such widespread satisfaction among gig workers and consumers, the sharing economy is projected to triple in size by 2025. According to economist Robert Vaughan, the sharing economy’s size in five key sectors was $15 billion in 2014 and is projected to reach $335 billion by 2025.

In addition, Millennials (young adults ages 18-34), known for their more independent and entrepreneurial outlook on work, are helping to grow the sharing economy and start-up phenomenon. A Bentley University study revealed that only 13 percent of Millennials’ career goal involves climbing the corporate ladder to become a CEO or president. However, almost two-thirds (67 percent) said their goal involves starting their own business. Today’s technology and the sharing economy is providing them better opportunities to do so.

The be-your-own-boss attitude among younger generations has translated into millennial entrepreneurs launching twice as many businesses as Boomers, according to the 2016 BNP Paribas Global Entrepreneur Report. Not only have they successfully launched their businesses, but a 2014 Manta survey found that 76 percent of millennial entrepreneurs polled in the first half of that year said their businesses were off to a successful year. Many of them hired new employees, and planned to hire more throughout the year.

Furthermore, more people below 30 are driving longer hours for ridesharing services than older people. Demographic trends of the sharing economy workforce show that young people tend to favor the gigs that involve driving, making up 20 percent of Uber drivers. In comparison, only 8% of taxi drivers are below 30. Taxi unions in particular are known for protesting ridesharing services such as Uber, a move that may be unattractive to young people who make up a good percent of its users.

In fact, not many young people are looking for unions at all to integrate into their full time or gig workplace. Only 4 percent of employed 16 to 24 year olds are union members, and the membership rate for workers 25 to 34 years old is less than 10 percent. Contrary to the belief of many politicians and NLRB lawyers, this may actually be a good thing for young people.

Unions are inherently unbeneficial to young workers since they operate with a seniority system. This kind of hierarchical structure is designed to protect those who have seniority instead of promote those who may have a better work ethic or expansive knowledge. As a result, unions ignore the individual achievements of young workers.

Furthermore, what makes the gig economy unique is that workers are given flexibility and are not restricted by a payroll or required working hours. This is ideal for students and young people starting a family.

Whether they are creating Facebook or driving for Uber, the next generation of workers are finding that work without a boss or union makes them happy. Since many sharing economy participants are part of the enthusiastic younger generations, in time, independent work is sure to take over the modern business world – (hopefully) even expanding more than unions and legislators can ever keep pace with.