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The rise of the gig economy
December 14, 2010 - Rob Weaver
President Barack Obama and some 20 corporate executives are to meet today in Washington. An Associated Press story says “both sides come to the session with their respective wishes: Obama wants the private sector to use its record profits to increase employment; executives want the administration to ease regulations they perceive as too onerous.”
My view is, if current conditions were to remain, some businesses eventually would increase production by expanding, adding equipment and workers. Why? Read this comment by Valerie Jarrett, a senior adviser to the president: "Companies are sitting on a great deal of cash, so it would be very important for the president to understand what more could we do to encourage investment that is going to lead to job creation.”
Let me stress that first clause: Companies are sitting on a great deal of cash. That cash, unless invested or otherwise spent on goods with long-term value, could lose value if the Fed continues to push more money into the economy. Plus, too much cash reserves can make a corporation a buy-out target. Remember when Black & Decker tried to acquire American Standard in the late 1980s?
So, eventually, companies will begin hiring again.
But here’s my forecast — not so much a bold prediction as it is a concern: In an effort to mitigate the impact of the health-care bill, businesses will hire part-time help. Imagine new hires working 30-hour weeks.
I don’t think manufacturers would go so far as to switch from three 8-hour shifts to four 6-hour shifts — yet. But similar changes in some industries already have forced workers into the “gig economy,” so titled because people must cobble together multiple jobs, or gigs, to create full employment for themselves. This has been happening in journalism, and may of you have seen the results without even realizing it: That’s why the same columnists (such as Kathleen Parker, John Stossel and Bill O’Reilly) appear on cable news/commentary shows, post blogs and write pieces for websites.
I hope I am wrong, but if rising consumer demand and a huge available labor pool merge in the current business climate, expansion of the gig economy may be inevitable.
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