The US economy is in a weird place right now. A lot of people with cushy, white-collar jobs are doing just fine, pandemic notwithstanding. Meanwhile, retail workers, blue-collar workers, and people in the service industry are feeling the effects of COVID more than many other professions.
This has led to a doubling-down of a trend that many economists fear: the side-gig explosion.
The “gig economy” has been a symbol of the homogenization of American labor. Taxi services go out of business while Uber flourishes. Airbnb eats hotel’s business just like Netflix ate Blockbuster’s customer base.
Workers struggling to make ends meet on their own find driving for Lyft or delivering for GrubHub to be a more sensible use of their spare time than just looking endless for a better job.
The widening gap between labor classes in the US has hastened the burgeoning of the gig economy. Blue-collar and service industry workers are left stranded in a sea of jobs that don’t care about them, scrambling to make ends meet.
COVID-19 only accelerated this process further, driving many to take up side gigs to make some money on the side and help them pay their bills.
This is troubling for some economists, because it’s effectively frozen the earning power of many young people. Millennials and Gen Z workers who would, normally, be pursuing careers that advance their spending power are, instead, stuck with an assembly of side gigs.
This has them in suspended animation, essentially, never earning a chance at promotion. Uber pays all of its drivers the same rate, essentially. There is no path from Uber driver to high-paid Uber executive.
However, the gig economy itself isn’t the reason why class mobility seems arrested. Instead, it’s simply a symptom of a much bigger issue. While Uber drivers aren’t being promoted to Uber executives, Millennials and Gen Z, in general, aren’t getting promoted to anything at all.
As a general rule, younger workers are being passed over for promotion compared to their older peers, even if they have more education and experience.
This situation is compounding with mounting student loan debt and the ever-escalating cost of living issues. With the pandemic pressing down on many households, there could be a major bust coming down the line soon.
So, the gig economy might be here to stay. However, that might not be as good for the real economy as Uber and Airbnb would have you believe.