Aging workforce finds flexibility but not peace of mind in growing 'gig economy'

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As a business reporter, I've heard the term "gig economy" a lot.

I've reported a number of stories that relate to it, from the rise of Uber and Lyft to the push by some port truck drivers to be classified as employees rather than independent contractors by the companies they drive for. 

I've worked full time for the same company for the last 12 years, so my own professional exposure to the gig economy is limited. But clearly, more people are turning to "gigs" — freelancing, working as independent contractors — to make a living, or at least some extra money.  

Who are these people, how many are there, and why have they chosen "gigs" over steady employment? My attempt to answer these questions has put me in touch with some smart and interesting people. 

My first image of gig economy workers might be downright stereotypical: an army of millennials who love the freedom and flexibility of Uber driving or freelance coding from their couches. But the two gig workers I hung out with recently are both in their 60s.

David James: handyman, apartment manager, Uber driver

 "I can’t see at this stage in my life where having just one job is going to meet all of my needs," 61-year-old David James told me.  He was sitting in his backyard in Sunland, where he recently started renting a home with some room-mates.  

61-year-old David James is an Uber driver, handyman, and apartment building manager.  "I can’t see at this stage in my life where having just one job is going to meet all of my needs."
61-year-old David James is an Uber driver, handyman, and apartment building manager. "I can’t see at this stage in my life where having just one job is going to meet all of my needs." Brian Watt/KPCC

In his past professional life, James has worked full-time as a bus driver, a manager of convenience stores and a Big Boy restaurant. He is also a licensed funeral director with 20 years experience in the funeral industry. But now,  he manages an apartment building, does handyman work, and drives about 30 hours a week for Uber.  

James' current gigs compliment each other nicely: Uber driving gives him the flexibility to respond quickly if something comes up at the apartments. And he chooses handyman gigs that go easy on his aging body. "I have knees that don’t like to bend right," he said.  

I caught James on an off day, when he planned to tend to some volunteer work for his church and get to choir practice that evening. He grew up in northern Illinois, the son of a farmer, so as a younger man, the idea of a good steady job was important to him.  

"I always felt really insecure if I didn’t have a regular paycheck," he said.  But while working in the funeral industry, he started picking up handyman work to supplement his income, and that built his confidence. "I’ve seen that I can support myself, and if I have several different avenues of pursuing income, it tends to fill in the gaps. So I’ve become a lot less anxious about working for myself. "

That confidence has changed the way he screens tenants for the apartment building he manages. "Because I’m doing independent stuff myself, I’m less concerned that they don’t have a regular nine-to-five job, as long as they can show that they can meet their expenses," James explained. 

The downside of his gig existence is that he isn't really saving much money, making retirement uncertain. "The closer I get to retirement age, the farther off it looks," James said with a laugh. "I’m probably looking at least at [working] the next five years, then may cut back on one of those [jobs]." 

Dianne Gowder: eyewear sales rep

The topic of retirement is a tough one for many older workers who've found themselves making a living in the gig economy late in their careers. 

“I don’t think I can ever retire because I never see having enough money to do so,” said 65-year old Dianne Gowder of San Pedro when I called her on the phone. Like David James, Gowder had responded to a simple survey at entitled "What do you do for a living?"

"I haven’t saved any money since 2005 and now I’m 65 so I’m just going to keep on working," says Dianne Gowder.
"I haven’t saved any money since 2005 and now I’m 65 so I’m just going to keep on working," says Dianne Gowder. Brian Watt/KPCC

Gowder is a sales consultant for an eyewear manufacturer — that means she sells eyeglasses frames to optometrists offices on commission. The work involves a lot of driving and cold call visits to vision centers in shopping malls, and schlepping big bags of sample frames to display in front of opticians. 

She let me tag along one recent afternoon at a sales call in Long Beach. I met her in a shopping center parking lot, where she hunched over the trunk of her car sorting through the samples looking for the two trays that would best represent her full stock.

"I have good muscles because these bags are heavy, and I have them in and out of my car all day long," she said.  She takes the stairs rather than elevators to stay fit. 

This is a second career for Gowder. For 20 years, she was an area manager for a market research firm. She had a salary she liked, good benefits, paid vacation days and a 401K.  She traveled a lot for the job and racked up frequent flyer miles.  In 2005, the company downsized, and she and her boss were out.

"We all got laid off, and it was very difficult for me at a certain age," she said.

She sent out hundreds of resumes, went on more than 20 interviews, but never got offered a job. "At 55, I was either overqualified or they thought I wanted too much money — even though we hadn’t even discussed money," Gowder remembered. 

Her old boss from the market research firm became an eyewear sales rep and suggested she try it. ("I'd never done sales," she said.) But the arrangement was different. They were no longer company employees, they were independent contractors.

"It was a huge switch," Gowder said. Suddenly, she was without medical benefits and had to cover her own expenses - including business cards - and set aside money to pay taxes.

"I didn’t have a steady income.  It was up. It was down," Gowder told me.  "At certain times of the year, particularly Christmas. Nobody wants to see you at Christmas."

She stuck with it and started making a living. She came to appreciate the flexibility of the arrangement that allows her to pursue her passion: travel. She's visited Lisbon, Istanbul, even Myanmar, but she's also had to accept that when she's not working, she's not earning money.

Gowder told me several times that she loved the first eyewear company that took her on and feels the same way about the one she recently switched to. But she still misses her old job at the market research firm.  She estimates that even now, her income is half what it was before getting laid off, with no benefits and no retirement savings plan.

"I haven’t saved any money since 2005, and now I’m 65, so I’m just going to keep on working," she said. "It's difficult. It would be nice to think I could have a retirement or pension." 

When might she stop working?  

"I always say 70, but Social Security is not enough to live on," she said. "I don’t know that I could continue doing what I am doing now forever because I have heavy bags to carry about, and that becomes problematic when I’m ancient."

Counting 'gig' workers

As I explored the gig economy, I wanted to know how many people in the U.S. are working in these arrangements, and how the gig economy has grown over the past 10 years. It was no easy task, in part because there are numerous labels for workers who fit the description - like "freelancer," "independent contractor," "self-employed" and "contingent."

A common estimate thrown around is that a third of the American workforce falls into the gig category. Last fall, the Freelancers Union released a national web survey that supported that estimate, putting the number at 53.7 million people — a third of the Bureau of Labor Statistics estimated 157 million in the civilian labor force.  

I ran this quickly by two economists named Robert who are prominent in my world.  In an email, former Secretary of Labor Robert Reich said the one-third estimate sounded about right. Also in an email, Robert Kleinhenz of the L.A. County Economic Development Corporation said it sounded a little high to him.   

Last July, in the Wall Street Journal, Josh Zumbrin and Anna Louie Sussman got at the many different takes on the independent workforce, but concluded, as their headline stated: "Proof of a ‘Gig Economy’ Revolution Is Hard to Find."

But there is a sense that this workforce is growing, and so are the opportunities to join it.  I recently found the study that brought it all home to me. Eli Dourado and Christopher Koopman, research fellows at the Mercatus Center at George Mason University, called it "Evaluating the Growth of the 1099 Workforce." 

Instead of looking at data from the Bureau of Labor Statistics' household survey, they turned to the IRS. They evaluated more than 20 years of data about 1099-MISC forms, which is how most independent contractors file their taxes. They compared that with 20 years worth of data on W-2 forms, which are used by traditional employees to file taxes. Dourado and Koopman found that since 2000, the number of 1099 forms filed have increased 22 percent, while the W-2 forms have fallen 3.5 percent.

Unlike employee surveys, "1099 forms don't lie," Eli Dourado told me. "In that 15-year period, traditional employment has stagnated, and at least the number of 1099 forms has increased by 22 percent." He's not saying that the 1099 workforce is anywhere near as big as the traditional workforce (or that it will be any time soon), but his analysis found that independent work is growing, and traditional 9-5 benefit-eligible jobs are shrinking. 

"It’s clear that there is a real and dramatic change in the labor market underway right now," Dourado said, explaining that the traditional labor market has been losing its dynamism since the 1980s. Companies just aren't employing as many people in traditional, stable jobs as they used to.

"If fewer jobs are created and destroyed, that must mean that people are more likely to stay in their job, and people who are out of work are less likely to find work in the traditional labor market," he said. 

But he added that you can't blame the recession or credit a company like Uber for this change, because this shift in the workforce began long before those forces. He maintains that the Ubers, Lyfts, and TaskRabbits of the world have filled a vacuum left by traditional American companies, which the unemployed have seized on. These new platforms have also made gig work easier and more normalized.

So what does this mean for workers of a certain age like David James and Dianne Gowder? Dourado says it's a good thing, given how hard it has become to find a traditional job.

"The advent of contracting is unquestionably good for those people," he said. "It enables them to have flexible work hours. It enables them to still earn money and it insulates them, I think, from some of the agist discrimination that we might see in the traditional labor market." 

Dianne Gowder, who certainly believes her age kept her from finding a full-time job after being laid off, is grateful and glad to have a "gig," but she still wishes it were a JOB.

"I wish I were an employee," she told me. "I wish I had benefits, and I wish I didn’t have to worry about it." 

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