Having an income, but not a job (the upside risk of the On Demand Economy)

With the rise of the sharing economy (and especially with the rise of Uber) many articles are written about the negative consequences for employment. Being inspired by Doug Rushkoff’s blog for CNN in 2011 (Are Jobs Becoming Obsolete?) and the work of Chris Rufer from the Morning Star Self-Management Institute I never have worried about these consequences. Hierarchical organizations are not the ultimate coordination mechanisme for getting tasks done. I am pretty convinced that there is a lot of inefficiency, especially in larger organizations. This is of course disadvantageous for the customer (who has to pay the price for this inefficiency). But don’t underestimate the negative consequences in terms of demotivation for the employers as well. Having a job does mostly mean that you have an income, but it doesn’t mean that you are doing meaningful work that is satisfying or creates value for society.

If however an organization works efficient, it is pretty likely that it is constantly trying to foster innovation by implementing new technologies. Mostly all implemented innovations end with employers being laid off. Or in the case of new players in an industry: most of the time they are successful because they get the work done by performing tasks with more advanced technologies and less workers than incumbents. In his blog Rushkoff makes a very clear distinction between work and jobs. People have always worked, he says. But jobs are a relatively new concept. Until the advent of the corporation in the early Renaissance, most people just worked for themselves. He puts the question how we can organize a society around something else than employment. This was in 2011. Now, in 2015, this question is more topical than ever. 

Micha Kaufman very recently wrote an article  for Forbes with the title The End of Unemployment? He added some interesting views to the  questions and insights of Rushkoff. He emphasis that having one single job (like most people have) is a very risky business:

“When your income is from a single predictable source, there’s zero volatility — until that prediction goes wrong, and then it’s a crisis. As any entrepreneur will tell you, having your company rely on a single client is a recipe for disaster yet that’s what traditional employees do everyday.” 

Kaufman describes the situation were people don’t have jobs but work in the On Demand Economy. Kaufman calls it the Gig Economy. You can be an Uber driver, an Airbnb host, write for SeekingAlpha, a Taskrabbit and many more. The downside is that your income is less predictable and your long-time employment less secure. But the upside is that you are spreading your risks, like an investor does. Your income may fluctuate, but along with that volatility, comes a built-in safeguard. Maintaining a portfolio of income sources means these variations don’t hit as hard. Another upside, for society as whole, is that the same amount of labor could be partitioned among more workers. It helps the unemployed and it helps the overworked too.

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