Survival in the Gig Economy
Freedom from the nine-to-five or another form of exploitation? The gig economy is both!
Book gives you the truth about about what to expect and helps you make a plan when nothing is predictable.
Freedom from the nine-to-five or another form of exploitation? The gig economy is both!
Book gives you the truth about about what to expect and helps you make a plan when nothing is predictable.
Although White Collar Sweatshop was published in 2001, the story it tells—about working harder for less, chronic exhaustion, disappearing pensions, fewer (paid or unpaid) vacation days, and general degradation of our work life—could just as easily have been written today. Although we have had several decades of public discussions surrounding issues of work-life balance, precarious “gig” work, underemployment, and many workers working well past the traditional age of retirement, nothing has changed.
White Collar Sweatshop begins with tales of long and exhausting workdays, leaving little time for family activities (including necessary caretaking) and civic engagement. White collar workers are especially prone to longer hours because most of them are “exempt” from overtime laws. (Blue- and pink-collar workers on the other hand are overworked because they have to juggle multiple part-time jobs to survive). Nothing changes because of the stranglehold big money has on our political and policymaking system, and keeping workers too exhausted to challenge the status quo is a side benefit of expropriated profit.
Overwork used to be experienced only by those at the top. In the old days (mid-twentieth century), only “executives” were expected to be in the office 9 ½ hours per day, or 50-60 hours per week. Now, America’s corporate middle managers are expected to put in even longer hours than these, and overwork is viewed as the only way to success. Employees are exhorted to “lean in,” sweat and scramble over others for those few top plum places, or work long enough to receive stock options (ESOs) that you hope will appreciate enough to allow you to retire before you drop dead from exhaustion.
Fraser traces the new lean and mean workplace to the recession of the early 1970s, along with government bailouts of Chrysler and Lockheed. Fingers pointed to America’s inability to compete in a global economy and an over-reliance on imports (no one ever seems to consider corporate greed in any of this). Factories were shuttered and shipped abroad, where labor was cheaper. During the 1980s, Wall Street boomed, and more of the middle class became shareholders through new financial products such as mutual funds. This created an investor-bias mentality where everyone from pension fund managers to small fund and ESO shareholders bought into the ideologies of market competition, deregulation, destabilized companies and sweatshop workplaces.
Even in 2001, the corporatocracy’s reflexive reaction to any bad news was to reduce the number of employees. And even those “restructurings” that were deemed to be failures (in terms of impact on growth and bottom-line objectives), were often followed by another “restructuring,” which was usually a euphemism for layoff. Fraser quotes Richard Sennet:
“In the operation of modern markets, disruption of organizations has become profitable. While disruption may not be justified in terms of productivity, the short-term returns to stockholders provide a strong incentive to the powers of chaos disguised by that seemingly assured word ‘reengineering.’”
Fraser briefly addresses the paradox of white collar underemployment for some while many others are concurrently overworked—a phenomenon I addressed in more detail in my dissertation and 2018 The Great Jobs Deception. We hear stories that have become common for mid-career workers today—jobs are eliminated, and the job seeker has increasing difficulty finding comparable employment, as both age and previous salary are deemed to be liabilities. In a work world of disappearing jobs and constant chaos, for most folks, subsequent employment either pays less, offers less by way of paid benefits, or now you are doing the work of two or three people who have been laid off.
A typical scenario for employees who are laid off mid-career is that the search for subsequent employment takes much longer than expected–even in a purported “hot” job market. This is just as true today as it was in Fraser’s 2001. Although the 1990s was noted for being a period of tight job markets and a “booming” economy, bouts of unemployment lasted “longer than any period since the 1950s.”
Employers were also eager to adapt technologies as a means of monitoring and controlling the workforce—another source of added job stress. Cell phones, beepers, and portable laptops kept employees tethered to work 24/7. Employee productivity was measured down to every minute, keystroke, and bathroom break.
“Despite a growing economy in 1998, the mean duration of unemployment among our members (computer programmers) has increased from 84 weeks in 1995 to 103 weeks in 1998.”
Employers want to hire younger workers with “newer credentials,” as well as the stamina to work unpredictable and inhumane overtime hours for lower wages. Older job seekers may feel that they are (or deemed to be by potential employers) “overqualified,” which is often employer code for “too old” or “too expensive”. With dwindling savings and few prospects, many older job-seekers accept subsequent employment that uses fewer of their skills, pays less, and offers little or no opportunity to move up. Besides losing income and any opportunity to move up or obtain better employment in the future, such situations present yet another downside: Research has shown that middle-income employees are 3 times more likely to die following an income drop of 50% or more than high-income employees.
In addition to stagnating paychecks for ever more work, other supports and benefits that were typically provided by employers in the past have also been going away. As recently as 1991, two-thirds of all people working full-time for big companies were covered by traditional (fee-for-service) health insurance plans. By 1997, only 27% of people working for big companies were covered by these plans. Today, 47% of workers participate in some kind of an employer health care plan: Many more employers offer plans, but they are too expensive, so employees will roll the dice and opt out. The problem of American health care costing too much and delivering too little is larger than just a workplace issue, but it derives from the same root—corporate greed.
Traditional pensions (defined benefit plans) have also gone away, either gone completely or replaced by less secure defined contribution plans, which shift risk onto employees. Many companies were able to evade legal responsibilities of defined benefit plans by merging with other companies. Others, like Montgomery Ward, took advantage of a bull market inflated value (especially during the 1990s) to help pay tax penalties on the dissolution of these plans.
Fraser points out the betrayal of employers, who were touting the “end of paternalism,” a euphemism for a loss of willingness to share the rewards of prosperity with the employees who worked to earn them. In the middle of the 20th century, employees expected that corporate loyalty would result in stable employment with reasonable opportunity for upward mobility and a modest but comfortable retirement. Most jobs even allowed workers to slow down a little as they grew into the corporate structure. However,
“Today, white collar jobs and large employers seem far less desirable, accompanied as they frequently are by 24/7 job stresses, a host of technological intrusions, and all kinds of financial and career insecurities…The very notion of long-term job security now seems hopelessly antiquated…”
Technology tends to affect white collar work in one of three ways: (1) jobs are “reengineered”, which sometimes leads to layoffs of older employees who can’t (or won’t) get up to speed quickly enough and can be replaced by cheaper workers; (2) jobs are completely replaced (again resulting in layoffs); or (3) an increasingly smaller portion of jobs which remain unaffected. Fraser was writing this at the beginning of the 21st century—before the current explosion in AI—yet even then writers like Jeremy Rifkin (The End of Work)) were warning about future “technological displacement” of millions of workers, including previously “immune” accountants, financial planners and stockbrokers.
The paradox of the technology revolution at work was loss of jobs, but the jobs that remained had higher stress. New technologies—which are promoted with the promise of making work less stressful and more efficient—often result in additional work demands and stress. Workers are assumed to be able to handle much larger workloads than the new technology actually helps them do, and/or more layoffs are justified because of overly optimistic projections of how much more work the new technologies will accommodate. Any new technology—no matter how much more efficient it may be in the long run—involves stresses with learning and adaptation to the new processes and procedures. Employers frequently discount these learning curves and employees must learn and cope on their own without any support or direction from management (who themselves often don’t understand the new technologies).
One benefit of the internet is that it allowed employees a way to complain about work anonymously. Fraser found postings on such sites ranging from, “All jobs are bad,” to “There is no such thing as a good job—there are only jobs which are less painful, degrading and soul-killing than others. Your readers should be looking for ways to destroy their company from the first day that they sign on. They should be noting what software is illegal, what labor laws are ignored, what cash is a little too fluid and what EPA regs are flaunted.”
“A tour of work-related Internet sites reveals a working population that is angry, exhausted, sometimes crude, and almost invariably frustrated by conditions on the job.”
Fraser notes that these small acts of rebellion allowed employees to assert “some measure of control over their tech-controlled time schedules and their psyches.”
Temporary jobs were once associated with lower-skilled clerical jobs, but “thanks to corporate America’s preoccupation with controlling compensation costs (everywhere outside the executive suite)”, Fraser notes that contingent and precariatized “temp” jobs now include some 6 percent of professional and “specialty” jobs. Obviously, this number is much higher today.
Here Fraser turns to a discussion about contingent labor, or what we know today as the “gig economy.” Between 1986 and 1998, the number of temporary staffers and independent contractors in the U.S. quadrupled. In 2001 Silicon Valley, some 40% of employees were working in some form of contingent status. These “permatemps”—who often do the same jobs and have the same skills, education and training as permanent employees–occupy a second-class status: no paid time off, no ability to move up, and no access to the stock options and other benefits that allow a few regular employees to retire in comfort.
Fraser takes us on a visit to Silicon Valley, which was just beginning its ascendance. She juxtaposes the “hoopla” (media propaganda) about employees in their 20s who became stock option millionaires against the reality of a software engineer she identifies as “Brian.” Brian described how his work was so unpredictable, he had to sign up for multiple consulting gigs at a time in order to keep a semi-regular cash flow. Brian described coming home from work as the sun was coming up, and six month stretches of 18-hour workdays for stretches of six or seven days a week. He wondered about the emotional toll of such extended periods of sleep deprivation and burnout.
The reason employees put up with abuse in the workplace is that the job becomes a golden handcuff. Fraser describes employees at Intel who “feared that their ages and salary levels [would work] against them” if they had to look for another job. Employees lamented that what had once been a collegial and collaborative environment had devolved into internal hypercompetition. A managerial ethos of “winning” was (Fraser suggests possibly deliberately) imposed on employees in the form of fear—fear of competition, fear of bankruptcy, and fear of losing. Although by the late 1990s companies like Intel were performing well financially, there was a constant emphasis on controlling operating expenses (i.e., salaries and benefits) and addiction to “raising the bar.”
The corporatocracy has always used its huge public megaphone (armies of PR and communications specialists) to convince the public that lean-and-mean practices, layoffs, and other employee-destructive actions are either (1) necessary to confront competitive threats, or (2) the harbinger of a brave new world of productivity and prosperity for all.
Fraser describes how companies attempted to minimize the emotional shock of layoff announcements by “rebranding” them as “downsizing,” (which then became “right-sizing”), “non-select,” “release of resources,” and “career-change opportunities.” Employee separations were renamed “tribute packages” (foreshadowing the Hunger Games story). Some employees were notified of their termination via impersonal email. Some employees were given pseudo-encouraging “pop-psychology” messages, which Fraser argues were tantamount to corporate sadism.
The corporatocracy—and the media corporatocracy that supports it—did what it could to “spin” the new, demanding, stressful, and unrewarding workplace as both a cultural revolution and an opportunity. While the press lionized CEOs like Sunbeam’s “Chainsaw Al” Dunlap and General Electric’s Jack Welch, a cottage industry of consultants sprang up to help laid off employees learn to “rebrand” themselves and get back into “winning.”
“Typically combining New Age techniques with an evangelical thrust, these initiatives seldom focused simply upon helping staffers adjust. They aimed to win pumped-up, motivated converts who would be ready to perform and thrive under the most grueling and even hostile of business conditions.”
Yet, Fraser argues, all the corporate ballyhoo about the brave new world of world could not cover for the (even in 2001) all-too-obvious outsized executive salaries and stock options packages compared to the diminishing returns from most folks’ salaries. Moreover, those in the C-suites never seemed to share in the risk and losses born by everyone else: Executive salaries continued to skyrocket regardless of the company’s financial health or potential future.
The theory behind the granting of stock options was that executive pay would be tied to stock performance and thus serve as a positive incentive. However, a number of companies adopted the practice of lowering the prices of executive stock options, allowing executives to still earn equity-related profits even when shareholder value declined. Companies who did this include Kmart, Netscape Communications, Seagate Technology, and Phillips-Van Heusen.
Many employees described their employer’s internal public relations campaigns as “Orwellian.” One employee at NYNEX compared conditions at the company to the “Stalinist Soviet Union, since he felt that nothing the company told its employees could be trusted.”
Harder to measure than work hours, wages and benefits is the psychic toll all of these stressors have on employees. One person Fraser interviewed described a workplace filled with employees “walking around with a thousand-yard stare.” People in “positions of influence were whacked,” only to be offered a position “ten levels beneath you…doing the same thing you were doing ten years ago.”
Workplace solidarity—which seems to be needed now more than ever—was negatively affected as well. An investment banker who survived four rounds of layoffs at Lehman Brothers tells of feuding divisions who were “trying to kill each other off.” Managers would attempt to push the actual act of laying off onto someone else, usually HR. Employees who survived a layoff wondered whether those who were laid off were actually better off because now they weren’t waiting around for the ax to fall. “It seemed to me that although they cut the head count, they never cut the work.”
Management consultant Alan Downs reported that those who carried out the layoffs (assuming they weren’t sociopaths) experienced trauma that “went beyond the actual pain of terminating employees. The secrecy that borderlined on deceit and the surviving employees’ loss of control over their own destiny attacked the very essence of their human dignity. It severely traumatized the very employees the company was depending upon to pick up the pieces.” Downs further warned that a “binge and purge” cycle that revolved around “short-term financials” could become “addictive.”
Fraser argues that there is a long-term negative impact of white-collar sweatshops on not just the workers themselves, but on families and communities. Employees confessed to Fraser their guilt about their “failure to supervise, motivate, or interact” with their children in the same way their own parents had. “By the close of the 1990s, many people had more money than ever, but they also had less time, physical stamina, and emotional energy to devote to activities unrelated to their all-consuming jobs. Interpersonal relationships of every kind deteriorated in ways that weakened communal structures while undermining the potential to live fulfilled, well-rounded lives.”
Although we can’t see it today, even retirements have been degraded. The irony is that for all of the economic “boom” and its promise of “more rewarding prospects for the golden years,…the Darwinian forces behind today’s ‘sweatshop’ corporations conspired to make the aging process more difficult…” Fraser thus articulated the downward spiral of our work life and potential future that continues today.
Fraser has some practical suggestions such as policies that encourage corporations to retrain workers, limit the use of contingent labor, and cap executive compensation. However, before we have any hope of seeing such things, we need to find a way to remove the influence of big money (corporate lobbying and campaign finance groups like the Chamber of Commerce and ALEC) from our lawmaking and policy process.
Things that the rest of us can do as individuals is to resist overwork (the “just say no” strategy), but this—like boycotts—will only work if enough people do it. Unfortunately, over 20 years after Fraser wrote White Collar Sweatshop, overwork has become not only a cultural norm, but practically a badge of honor.
Another suggested strategy is “investor activism,” which has actually had some success in enforcing better compliance with environmental regulations, mainly due to increasing popular concern about climate change. Since many employees are also stockholders (either through ESOPs, retirement accounts, or mutual funds), they are presented with a conflict between lifestyle trade-offs today (in the form of overwork or lower wages) or the retirement of tomorrow. Fraser points to some positive trends coming from pension funds, particularly large ones like the California Public Employees Retirement System. In 2000, Calpers voted its 9.2 million shares of IBM stock in support of IBM workers keeping their traditional pension plans. The Council of Institutional Investors (a group of 94 pension funds) discussed ways that institutional investors can encourage good workplace practices.
Fraser concludes by stating that she has “more optimism than I often imagined possible” four years after beginning her project. It is true that there has certainly been more public discussion about so-called “work-life balance” and other quality of work-life issues over the decades since the publication of White Collar Sweatshop. But…here we are more than 20 years later, and most of us are still working harder for less, with precariatized jobs, insecure retirements, and (for many of us) a much grimmer future.