In recent years, many workers have found new ways to earn a living, becoming their own bosses as they enjoy a freelance lifestyle. Whether they’re offering rides to the airport through Lyft or Uber, or running errands through TaskRabbit, people are redefining the way they earn a living and blazing a trail for future generations.
But there are downsides to working this way. For freelancers, the unpredictability of work and changing pay structures make it sometimes difficult to make a reliable living. But for businesses and the American economy as a whole, the impact can be far more widespread.
Pros and Cons of Our New Sharing Economy
Pro: Growth of Outsourcing Opportunities
The increase in freelance workers gives businesses a great alternative to hiring full-time, salaried workers. Instead they can outsource work on a per-project basis and continue working with those employees if they do well.
Additionally, errand services like TaskRabbit give professionals the ability to outsource mundane personal tasks, like picking up dry cleaning or running errands. They can then focus on their own work. For traveling professionals, Lyft and Uber have proven to be a better alternative to taxis and public transportation, allowing them to call for a car and pay all on their mobile devices.
Con: Shortage of Skilled Workers
Unfortunately, a sharing society also means fewer professionals in the workforce. As the unemployment rate drops, this could result in there being a national labor shortage, where businesses scramble for help from what is a much smaller pool of skilled workers who are willing to work a structured office schedule.
The Millennial generation is now filling the workplace, and they have expressed their preferences for a fun and flexible workplace. The workforce of the future will require a performance-based workday rather than one that is measured by time clocks and traditional 40 hour work weeks.
Pro: Entrepreneurs Working Together
The ad hoc environment can be very good for business owners, who can take advantage of the large variety of skilled freelancers available.
More shared work spaces like Canvs are opening up across the country, providing desks and meeting space for a variety of talented independent workers and small businesses. Co-working spaces encourage collaboration, prompting entrepreneurs to learn from and help each other as they build their businesses.
These centers also serve to help build the local economy by encouraging business growth.
Con: Wage Degradation
There are some who are concerned about these shared labor concepts. Economist Dean Baker pointed out to the New York Times, that the wages workers make in these gigs can equate to less than minimum wage. He expressed concern that in time, this could create a downward pressure on wages overall that could impact the earning ability of mainstream America.
However, for the most entrepreneurial-minded workers, this type of work can help build the confidence they need to start their own businesses.
The new sharing economy opens opportunities for both consumers and workers, allowing people to work on their own terms. With the unemployment rate still high, this sharing economy is enabling people to make money while they wait for job opportunities to open up.
It seems to me that the freedom of being your own boss is empowering and has the potential to inspire many to start their own businesses – which benefits the economy as a whole.