There’s an old joke about the economist who loses his car keys one night and only looks for them directly under a lamppost. Why would he look where there wasn’t enough light? The joke is often bandied about after hearing economists say they haven’t dug into an issue because the data aren’t good enough or don’t even exist. Today, this refrain is often heard when the so-called gig economy is mentioned. So in an era of Uber, Airbnb, TaskRabbit, and Handy do we need to update our labor market data?
Take a look at the current labor market statistics and you won’t find much evidence of a dramatic emergence of an “Uberfied” work force. Adam Ozimek, an economist at Moody’s Analytics looks at a number of labor market data sets from the U.S. Bureau of Labor Statistics and finds no evidence of a “nation of freelancers.” The share of workers who are self-employed actually looks to be on the decline in recent years and workers aren’t more likely to hold multiple jobs. Josh Zumbrun at the Wall Street Journal finds very similar results when he also digs into the data.
But as Justin Fox writes at Bloomberg View—commenting on Ozimek’s post—the labor market “fringes are where interesting stuff usually begins.” With that in mind, it’s heartening to see the recent letter to the U.S. Bureau of Labor Statistics from Senator Mark Warner (D-VA), who asks a number of questions about the agency’s capabilities to measure the gig economy now and in the future.
The Bureau of Labor Statistics produces high quality data on a number of issues, but no data set is ever perfect. Economists Larry Katz of Harvard University and Alan Krueger at Princeton University are looking into the gig economy and find evidence that the BLS surveys are missing out on some developments. Case in point: they find some evidence of a larger gig economy in tax data.
Furthermore, there’s room within the agency’s current statistics to get more information about the labor force. Consider independent contractors. Sociologist Annette Bernhardt at the University of California-Berkeley points out that a wide variety of workers are included in this group—from “management consultants, lawyers, doctors, farm managers, and architects” to “street vendors, barbers, auto mechanics, landscapers, cab drivers, caregivers, and truck drivers.” So while perhaps the aggregate labor market might not be full of freelancers, it’s important to understand which industries and occupations could be considered a part of this new and emerging gig economy.
It’s far too soon to say that we live and work in a gig economy today, but it’s important to consider how we can improve our understanding of how these trends might be shifting today and in the future so that other aspects of the labor market, such as worker benefits and non-wage compensation, can be examined in a new light.