More and more work is going piece-meal with spoon full salaries and rates. For example, I hired an electrician through the service Handy over the weekend, and I pre-paid him for two hours of work. Guys like Darien, the man who brought some light back to the house is one of many workers who need protection in this on-demand app economy. The big companies claim that if they pay more on benefits, etc., they will invest less in innovations.
These new platforms should not insulate businesses from treating their staff properly. They should be treating them as employees and should:
- Provide insurance
- Provide minimum wage
- Provide training about how to handle customer data (no one talks about this)
- Provide Andy pay for access to technology
Labeling this workforce as 1099s greatly reduces the company’s exposure, costs, and commitment to their employees. Their workers are left with annual self-employment taxes (Currently 15.3%) along with income taxes and also figuring out the crazy world of of medical expenses
Oh yea, the Ubers take a 20% or so commission
The On-demand economy has left 1099ers below the poverty line.
- One researcher found that 90 percent of tasks posted on Amazon’s Mechanical Turk paid less than 10 cents. He calculated that a task worth $1.00 with an average completion time of 12.5 minutes resulted in an effective hourly wage of $4.80.Set featured image
- After driving 10 minutes to pick up a fare, spending 5 to 10 minutes waiting for the passenger, and a 10-minute ride] “before car depreciation and insurance, I end up with $3.60 from [a fare of] $8. If we look at it by the hour, that will be $7.20.” – Uber SUV driver Chakib Seddiki, quoted in Slate.com.
- “Costello refuses to work for 60 cents or even $1.20 an hour because those low amounts are ‘more undignified than begging.’ However, at $2 per hour she starts to equivocate, and she admits that she often works for that wage.” – The Nation, writing about Mechanical Turk Worker Stephanie Costello.
- “Horrific. Digital sweat shop, slave wages, sometimes NO wages. You will be asked to jump through an absurd number of hoops for less than minimum wage. If you have a college degree and are either a professional writer, or a professional in the field you are writing about, don’t even lower yourself to this. It only kills your professional self worth. If you’re good, you can do better, trust me!” – Posting by Crowdsource worker.
These are piece meal jobs that get paid spoonfed wages; Low wages is not the only result. There are other outcomes such as the increased isolation of the free agent.
One potential solution can be a more guaranteed commitment of work. Maybe pay the worker upfront for a certain number of hours. Or just make the commitment to continue to keep them on staff.
There are others… What do you think?
(Next post will be about where to be part of a team as a freelancer)