Listen: What happens when the 9 to 5 jobs disappear? This is the new economy

The nature of work is changing and some experts are concerned.

Read the transcript

KAREN FOSHAY: If you want to see what the future of work is for millions of us, visit a job fair. At a recent one in El Segundo I met Walter Holloway. He lost his aerospace job when Boeing moved to Seattle in 1998.

WALTER HOLLOWAY: And left a lot of us on the streets with nowhere to turn you know in my case it was two weeks before Christmas.

KAREN FOSHAY: When you were there did you have health benefits?

WALTER HOLLOWAY: Everything. Everything 401, everything you could dream of.

KAREN FOSHAY: How old are you?

WALTER HOLLOWAY: I am 53 now.

KAREN FOSHAY: And what have you been doing for income?

WALTER HOLLOWAY: Uh tell you the truth, Ubering and everyday hustling.

KAREN FOSHAY: As an Uber driver, he’s his own boss – setting his own schedule, working when he wants to.

WALTER HOLLOWAY: But you still have to be out there from 10 to 15 hours a day to make some real money.

KAREN FOSHAY: What’s real money?

WALTER HOLLOWAY: 150, 200 dollars a day.

KAREN FOSHAY: Holloway is surviving as a member of the gig economy. He’s an independent contractor, not an employee. That means he doesn’t get any benefits and pays a lot more in taxes.

WALTER HOLLOWAY: Trust me it hasn’t been easy. I have been having to do quite a few things to maintain. I fell a little bit behind a little bit now so every week is a bill to pay. No money in my pocket. Just straight to the bill man.

KAREN FOSHAY: does it keep you up at night worrying about the future?

WALTER HOLLOWAY:of course of course. I have two grandsons living with me now. I got to keep going no matter what . If I want to or not I gotta keep it going.

KAREN FOSHAY: You are raising your grandsons?

WALTER HOLLOWAY: Yep.

KAREN FOSHAY: How old are they?

WALTER HOLLOWAY: Three and four.

KAREN FOSHAY: Just to add to the pressure.

WALTER HOLLOWAY: Man oh man oh man…

KAREN FOSHAY: At the job fair he doesn’t find many jobs,but lots of “business opportunities” to be an independent contractor — for pest control companies, insurance providers and security guards.

What’s happening here is part of a national trend according to a Princeton-Harvard study published earlier this year.

It found nearly all of the net job growth from 2005 to 2015 was in the gig economy – jobs as freelancers, temps and independent contractors.

Older workers are most likely to have those jobs. One in four of them are in the gig economy already.

DAVID WEIL: I think it should be a great concern to all of us

KAREN FOSHAY: Dr. David Weil is head of the federal labor department’s wage and hour division.

DAVID WEIL: “because it means a lot of people. They are going to be in a situation where more and more of the risks that face are being born by them.

KAREN FOSHAY: He’s concerned that as more people shift from employees to independent contractors they lose the safety nets that employers used to provide.

DAVID WEIL: If you are are independent contractor and you are injured you’re not covered by worker’s compensation. If you are an independent contractor and you lose your job, you are basically unprotected from unemployment insurances.

KAREN FOSHAY: And you’re more likely to be poor, injured and make less money than those in traditional employment jobs according to federal reports.

The government accountability office estimates 40 percent of the workforce is in the gig economy. And some who have landed there can’t seem to leave.

An abandoned neighborhood near lax is a sort of holding pen for some of the participants in the new economy. Dozens of Uber and Lyft drivers hang out, waiting for a ride.

JAMES SMITH: I know a lot of them have lost their jobs and they come here as a last resort and they are doing the best they can.”

KAREN FOSHAY: This is 52 year old James Smith. A disability has sidelined him from his full time trucking job. Now he drives for Uber.

JAMES SMITH: I pretty much work seven days a week and that way I can make end’s meet. And it kinda sucks to work that many hours.

KAREN FOSHAY: He drives nearly 15 hours to make about $200 a day, before paying all his expenses

JAMES SMITH: Insurance, maintenance, higher insurance because it’s commercial insurance. And yeah the wear and tear, you are beating your car up.

KAREN FOSHAY: That usually leaves him with about 120 dollars. What expense are you cutting back on?

JAMES SMITH: Live very frugally. Very, and I live paycheck to paycheck but I’m doing okay. I have no extra money but I have enough to pay my bills.

KAREN FOSHAY: What’s a splurge for you?

JAMES SMITH: Um, maybe dinner and a show.

KAREN FOSHAY: Forty cars over, parked next to a homeless encampment I meet Steve Chermock.

STEVE CHERMOCK:  I have been trying to find a job for two years and it’s hard when you are old. I had to shut down my business two years ago. My body just quit. Yeah I had some injuries, hard work my whole life.

KAREN FOSHAY: He now also drives for Uber and Lyft.

STEVE CHERMOCK: It saved me. It saved me. Because it’s hard, you know. It doesn’t matter if you have a clean driving record or clean past. The fact that I am 55 years old -people don’t want to hire you. Even for driving jobs.

KAREN FOSHAY: Do you worry a little bit that you don’t have a safety net? You’re not not getting a pension here, you’re not getting a 401k, no health benefits, no workers’ comp or unemployment insurance.

STEVE CHERMOCK: Yeah you gotta do that on your own. I just got a call from Lyft. I have to go.

KAREN FOSHAY: Okay.  Across the street is Long Nguyen, he’s a 43-year-old former salesman who has been laid off twice since 2008.

LONG NGUYEN: I mean, I used to work for, like, Home Depot and Lowes; went to Sears; all those companies, they always changing drastically. You know, they’d change your hours all the time, from full time to part time. They want to get under that threshold of trying to pay off the benefit from you, so.

KAREN FOSHAY: what’s the long term plan?

LONG NGUYEN: The long term plan is, you know, hopefully I can build my funds, and that’s why, for me, working seven days a week, trying to build that funds up. You know, I gotta save for the rainy day, ‘cause you don’t know what’s gonna expect next.

KAREN FOSHAY: What are you giving up?

LONG NGUYEN: My leisure time. Spend time with my wife. I have been on the road 16 hours a day, seven days a week. So I told here at the end of the year you know, we would go out.

KAREN FOSHAY: Are they requesting you?

LONG NGUYEN: Yes.

KAREN FOSHAY:So you gotta go?

LONG NGUYEN: Correct, unfortunately, sorry.

KAREN FOSHAY: This everyday hustling isn’t a surprise to Dr. Mark Kaplan, a professor of social welfare at UCLA.

MARK KAPLAN: We are seeing it all over society and it’s not just Uber. It’s the -you name it.

KAREN FOSHAY: Independent contractor work is in all kinds of industries-construction, entertainment, transportation. It offers flexibility, but Dr. Kaplan would argue, that’s about it offers.

MARK KAPLAN: The uncertainty, the lack of protection. I mean, there is just nothing there. You basically drive, you make some money, and that’s it. And I think that’s the new economy.

KAREN FOSHAY: Both Uber and Lyft told KCRW the majority of their drivers work part-time and are provided access to some financial services. But this story isn’t really about Uber or Lyft. It’s about the future of work as more employees become independent contractors , but what happens when those jobs disappear?

Lyft claims it won’t need drivers in ten years thanks driverless cars.

In September, Uber’s self driving truck successfully delivered cases of Budweiser from Fort Collins to Colorado Springs. Now think about this – there are 3.5 million truck drivers in the us.

MARK KAPLAN: And the question is -what’s to them? And we need to start addressing that as a public policy problem. Or else we will, it become a public health problem.

(Photo: Laith Al-Majali)

 

Comments

  1. lilyflowerjunebug
    Dec 01, 2016, 10:21 pm

    Thank you for reporting on this troubling issue. It's pervasive at tech companies in the Bay Area. "Contract-to-hire" is practically a bait-and-switch. Most likely, you'll either be renewed for another few weeks/months, reassigned to a different role/team (thereby, restarting your contract) or replaced with someone else. Companies are reluctant to hire you as an employee if they can avoid it. It's distressing how unpredictable it is to be a contractor, both emotionally and financially, especially in an area where cost of living is so high like San Francisco.

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  • lilyflowerjunebug

    Thank you for reporting on this troubling issue. It’s pervasive at tech companies in the Bay Area. “Contract-to-hire” is practically a bait-and-switch. Most likely, you’ll either be renewed for another few weeks/months, reassigned to a different role/team (thereby, restarting your contract) or replaced with someone else. Companies are reluctant to hire you as an employee if they can avoid it. It’s distressing how unpredictable it is to be a contractor, both emotionally and financially, especially in an area where cost of living is so high like San Francisco.