The rise of the “gig economy” — the world of part-time, free-lance, contingent workers such as Uber car drivers or contract software engineers — threatens to supplant an earlier model, in which long-term, stable employment with a single company was the norm.
“Contingent workers” now account for about 40.4 percent of the workforce, up from 30.6 percent in 2006, according to the Government Accountability Office. This trend arguably began sometime in the late 1990s, especially in the so-called New Economy. It intensified with the last recession. Indeed, the vast majority of new jobs being created are contingent, temporary gigs — precisely the opposite of what happened in the 1990s.
This new face of labor is anxiety-producing, but there’s not much new about it. In fact, the replacement of steady jobs by unpredictable gigs marks a return to what passed for normal for most of U.S. history. The gig economy was the economy.
In the late 18th century, most people worked on farms. Although many Americans owned land, contingent farm labor was commonplace, much as it was in England, where the rise of capitalism had created a class of casual wage laborers who moved from job to job and place to place.
In Massachusetts, cradle of the American Revolution, landless laborers traveled from farm to city and back again, piecing together jobs in a way that would seem familiar to today’s millennials. In 1770, one 20-something from Walpole, Mass., described how he had moved “from place to place for his living … for allmost [sic] two years past and hath nothing but his hands to get a living.”
The countryside was crawling with such people. In cities and towns, those fortunate enough to learn a trade enjoyed far greater privileges. But acquiring those skills required an apprenticeship with a master craftsman. The apprentice exchanged labor for room, board and training. This system was remarkably stable, involving a long-term relationship between master and apprentice that culminated when the trainee set up his own shop.
This system broke down as the Industrial Revolution gathered steam in the 19th century. The growing division of labor reduced once complex crafts to easy-to-master steps, each of which could be contracted out to contingent workers. Much of this production took place outside of conventional factories. Instead, employers would “put out” — in other words, subcontract — the labor to a faceless army of men and women, many of whom worked at home. A single pair of pants, for example, might tap the labor of 17 or 18 seamstresses and tailors working as subcontractors.
This was the gig economy, and it wasn’t pretty: Workers struggled to make ends meet, contending with an ever-changing number of employers, jobbers and other middlemen who hired them.
Much like today’s free-lancers, these laborers worked overtime to cobble together a living wage.
In the second half of the 19th century, growing numbers of laborers began toiling in large factories. This brought some stability to employment, but immoderate fluctuations in the business cycle, combined with seasonal changes in demand and in the availability of raw materials, put large numbers of people out of work on a regular basis.
While they waited to be hired or rehired, they often turned to odd jobs, unskilled labor and other forms of makeshift employment. Outside of salaried, white-collar work, which also was far more tenuous and unpredictable than it later became, most Americans had some experience with the gig economy.
This was especially true in extractive industries such as logging and mining, where seasonal, temporary and contract work remained the norm. The lives of these workers, chronicled by the historian Mark Wyman, reveal a world of contingent, flexible, contract laborers. These itinerants went by a host of derogatory names: hobos, bindlestiffs, floaters and tramps.
The 20th century brought some stability to the labor markets. Unions, combined with competing doses of corporate paternalism, joined workers and employers in long-term relationships. These arrangements, profoundly shaken by the Great Depression, would become commonplace in the postwar era.
The nature of work was transformed. In 1910, labor turnover was two or three times higher than in 1960. By the postwar era, a job for life seemed like a reasonable expectation; a job with benefits was the norm for a remarkable swath of the American workforce, though contingent, free-lance employment lived on in some areas of the economy such as migrant farm work.
This sea change can be glimpsed in census data on those who identify as self-employed. According to the economic historian Claudia Goldin, in 1910, 21.5 percent of the white men between the ages of 25 and 64 described themselves as self-employed. By 1940, that number had dropped to 14.9 percent; by 1990, it was 12.5 percent.
The number of such workers probably is on the rise again, and even those who hold full-time, steady work are starting to pad their earnings with free-lance work on the side.