Are We Becoming A “Crummy Society Filled With Crummy Jobs?”

on deamnd economy olivia sterns45 million Americans across the country now make up what’s called the “on-demand” or “gig” economy, working when and where they want, finding jobs through apps like Uber and Task Rabbit, some people working two or three gigs at a time.

This Labor Day, it almost looks like work as we know it is becoming a thing of the past. Remember when people had a real “job” (and it actually paid the bills)? Those days may be over.

But what is the true impact of the growing “on-demand” economy? Can people really make a living and find job satisfaction going from one gig to the next? And what does this flexible but impermanent work structure mean for American society?

Over the weekend, NBC’s Olivia Sterns reported on the good news for today’s independent contractors. Business is booming, she says. Many love setting their own hours and their own prices, and squeeze in “jobs” between going to school, or working for another employer.

But it looks like there could be dark clouds on the gig horizon. 67% of those who have worked as independent contractors said they wouldn’t choose to do it again, says Sterns, citing a Deloitte survey.

These ad hoc jobs lack benefits like health care, disability protection and retirement benefits, making it virtually impossible to build financial security, save for a rainy day, or plan for the future. Jobs – and workers’ income – can vary day-to-day, which makes paying the bills an uncertain challenge. Saving enough for a thirty or forty year retirement? That sounds highly unlikely. So while doing that weekend bartending gig may be fun and a great way to earn extra cash when you’re a college student, it could be a drag when you’ve got two toddlers at home and need to pay for food, health care and a mortgage.

Sterns asked Dr. Jeffrey Pfeffer, Professor of Organizational Behavior at Stanford University’s Graduate School of Business, what a workplace built on part-time gigs could mean for our country.

“Fewer people have health care and insurance, fewer people are part of retirement plans,” he said.  “You cannot build an economy founded on a bunch of crummy jobs….you’re going to have a crummy society filled with crummy jobs.”

So while these jobs certainly help pay the bills, and provide workers with a way to earn extra income, they are often just filling the gaps in an “economy where better jobs are missing,” said Sterns.

That should give us all something to think about this Labor Day.

The Takeaway:  If you are self-employed, like several of our clients, you need to take extra steps to keep your finances – and your future – on track.

  • Your “gig” can be a great way to earn extra cash, but don’t count on it as a permanent job.
  • Try to save, not spend, the windfall. You can get a tax deduction and a head start on retirement by stashing money in an IRA or Individual 401k. Both are easy and free to set up. Don’t need the deduction? Opt for a Roth IRA.
  • Keep an emergency fund to protect you if business dries up.
  • If you’re piecing together several gigs to make ends meet, buy your own health insurance and disability. No one should go bare.
  • Use your part-time work to pick up some extra skills, make new contacts, and see if the independent life is right for you. It could be a great stepping stone to entrepreneurship or a lucrative consulting business.


About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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