As ‘gig economy’ grows, policy solutions prove elusive

This is part of a project about the gig economy published by Missouri Business Alert

The so-called gig economy, in which workers take on temporary or contract-based jobs instead of or in addition to full-time employment, is gaining prevalence. But the legal and regulatory framework governing the companies and workers that make up this economy hasn’t kept pace, labor and policy experts say.

“Current labor law is outdated, doesn’t fit the nature of employment today,” Judy Ancel, the director of worker education and labor studies program at the University of Missouri-Kansas City, said in an email. “As more and more people don’t have regular, stable jobs, they are in arrangements outside of the scope of either the Fair Labor Standards Act or the National Labor Relations Act, and have no protection.”

Upwork, the online freelance marketplace, and the Freelancers Union, a national advocacy group, released their third annual Freelancing in America survey in October. It estimated that freelancers represent 35 percent of the total U.S. workforce and contribute about $1 trillion in earnings to the economy.

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Diane Mulcahy | Courtesy of dianemulcahy.com

“Our labor market is structured in a way that is clearly obsolete and outdated,” said Diane Mulcahy, author of the book “The Gig Economy,” and a senior fellow at the Ewing Marion Kauffman Foundation. “This artificial demarcation between employees and contractors doesn’t fit the workforce today. It doesn’t accommodate well all the people that are involved in the independent work … The government needs to think about how do we update our labor market to create a system in which we give rights, benefits and protections to all workers, no matter how they choose to work.”

During election season, Missouri Business Alert contacted economists, employers, union leaders, lobbyists and political candidates, seeking their thoughts on key policy issues related to the gig economy. Many shared thoughts on key challenges raised by its emergence, but concrete policy solutions remain elusive.

Classification conundrum

One impediment to developing policies that would more effectively govern the gig economy is the lack of a precise understanding of that economy. To date, the government has not established a clear-cut classification for gig workers or an effective system to measure the gig labor force.

Growth of the gig labor force, from Uber drivers to on-demand consultants, has led to a classification dilemma, causing uncertainty about these workers’ rights and legal standing.

Take, for instance, Uber drivers: In the U.K., a tribunal ruled in October that the drivers are entitled to workers’ rights, including paid holidays and the minimum wage, The Wall Street Journal reported. In the U.S., however, Uber drivers are still fighting for their employee identity. They filed a class-action lawsuit in California claiming they have been misclassified as independent contractors and are entitled to employees’ benefits. On Nov. 21, a federal judge paused the suits until at least February due to legal quandaries raised at a recent hearing, according to Law 360.

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Different jurisdictions have grappled with the issue of how to classify Uber drivers, among other on-demand workers. | Courtesy of Latrell G./YouTube

These classification questions also make collecting data about the gig economy difficult, meaning policymakers and government agencies may lack information that could help guide their decisions on the matter.

“I think one of the difficulties is that the people who are in the gig economy are counted in different places in federal data,” Alan Spell, research manager at the Missouri Department of Economic Development, said. “Sometimes, they overlap. So it’s hard to break out the exact number.”

The Bureau of Labor statistics announced earlier this year that it will conduct a survey on contingent and alternative employment as part of its May 2017 Current Population Survey, a monthly survey that measures the unemployment rate and other labor market indicators. The survey will identify workers with contingent or alternative work arrangements; measure workers’ satisfaction with their current arrangement; and measure earnings, health insurance coverage and eligibility for employer-provided retirement plans, according to the statement.

“Over the last five years, (the gig economy) has expanded to areas where people have not traditionally thought of it as contingent workers,” Spell said. “The recognition that the digital world is now connecting people and making this gig economy easier to facilitate … it’s time to gather the information and take it into the digital reality.”

Health insurance

Since independent workers lack the benefits that many companies offer to full-time employees, health insurance policy is a prominent concern for many workers in the gig economy.

Since the presidential election, President-elect Donald Trump has continued to call for sweeping health care reform, proposing “a full repeal” of the Affordable Care Act, or Obamacare.

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President-elect Donald Trump has vowed to repeal the Affordable Care Act, which could be felt acutely by part-time and contract workers. | Courtesy of Gage Skidmore/Wikimedia Commons

Paul Ginsburg, president of the Center for Studying Health System Change, said after the election that a complete repeal was unlikely, but that a partial repeal could be done through the budget reconciliation process.

“Such a step would not only kill the coverage expansion, but probably in the process also severely damage the individual insurance market,” Ginsburg said.

Even before Trump’s election, the condition of the federal insurance marketplace was a source of concern for freelancers who purchase health plans there. In late October, the Department of Health and Human Services announced that premiums for plans purchased through HealthCare.gov would increase 25 percent next year.

With major insurance companies leaving or signaling a potential exit from the marketplace, the average number of insurers in states that use HealthCare.gov will be 3.9 per state in 2017, down from an average of 5.4 per state in 2016, according to the Kaiser Family Foundation.

Unionization

An individual gig worker has little or no leverage to negotiate wages, overtime pay or other protections. Aware of this, more gig workers have started forming unions to bargain collectively and win protections enjoyed by more traditional labor unions.

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Kelly Ross | Courtesy of Ross/Twitter

Drivers who work for Uber, Lyft, and Sidecar have started App-Based Drivers Associations in at least two states. A group of Los Angeles-based Uber drivers partnered with local Teamsters in August for “organizational and lobbying assistance.” In September, after Uber drivers in New York created a Facebook page called Uber Drivers Network NYC, some of them went on strike over Uber fare cuts.

Kelly Ross, deputy policy director of the AFL-CIO, said despite the alternative ways to organize labor, the fundamental value of unionism remains. He also stressed that the change in unionization is a natural result of a changing job market.

“Every kind of work arrangement has a different kind of union, because workers in that work arrangement have different needs,” he said. “The fundamental thing is that workers need a voice and representation.

“In the future, we can expect that the kind of jobs that are out there is going to be different. … The way (workers) find representation is going to be changing.”

The future

For employers, part-time and contract arrangements will remain a popular way to hire talent at a lower cost, said Ray McCarty, president of Associated Industries of Missouri.

“(Hiring independent contractors) may be a way for employers to find expertise outside their borders, outside the places they would normally find employees,” McCarty said. “In that way, they also expand the labor pool available to them.”

Mulcahy believes wholesale change in the way we treat employer-employee relationships is the best way forward.

“Instead of having this artificial divide between employees and contractors, what we should do is get rid of the classification, and everybody should just be a worker,” she said. “You have access to rights, protections and benefits on a pro-rated basis. We should have a labor system that supports all workers no matter how, how much, when and where they work.”

Most efforts to organize gig workers are being made in big cities like New York and San Francisco, where there are high concentrations of the workers. But Caitlin Pearce, director of member engagement at the Freelancers Union, sees these efforts as a step toward more comprehensive reforms across the country.

“They are making these large economic contributions, and they are driving a lot of innovation and creativity happening in the cities,” she said. “Smart city officials are realizing that they have to start protecting and supporting those workers. We see it as a sign of more future progress to come.”

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Gig workers take different paths, strategies to part-time jobs

This profile series is part of a project about the gig economy published by Missouri Business Alert

About a third of the U.S. workforce is now part of the so-called gig economy, in which workers take on temporary or contract-based jobs instead of or in addition to full-time employment, and the number is expected to reach 40 percent by 2020, according to a study by Upwork and the Freelancers Union.

In the future, more people of all ages are expected move away from traditional nine-to-five jobs for the flexibility and autonomy that the gig economy can bring. And for those who still hold on to full-time jobs for financial stability, side gigs can provide opportunities to pursue creative passions and make extra money.

Behind the staggering statistics and aggressive growth projections for the gig economy, there are millions of individual stories of people with unique experiences working as freelancers. Missouri Business Alert sought out three such individuals to share their stories.

Storyteller Larry Brown always finds an audience

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Larry Brown tells story Wings at the Cape Girardeau Storytelling Festival in April 2012 in Cape Girardeau, Mo.

Oral storytelling took root in Larry Brown’s mind when he was a child. Growing up in a family that communicated by telling stories, he found storytelling to be second nature.

Born and raised in a town of 1,000 in Nebraska, Brown moved to Missouri in 1975. Now living in Fulton, the 67-year-old is a lifetime pastor and educator with a background in sociology, divinity and geology. He taught geology at the University of Missouri for almost 13 years. No matter what he’s done, storytelling has been embedded in his work and life.

“When I was teaching geology at the University of Missouri, I got an evaluation that said, ‘We enjoyed your monologues,’” Brown recalled. “I was like, ‘Monologues? What are they talking about?’ I talked to a former student of mine. He said, ‘Oh you know when you began class, you always start by telling a story.’”

Brown didn’t take storytelling seriously until about 30 years ago, when he and his wife attended a storytelling conference in California. There, for the first time, Brown met a full-time professional storyteller. That’s when he decided to become a storyteller.

“I always had an inkling of what storytelling was about, but I had no idea that folks made money by doing that,” Brown said. “(Professional oral storytelling) was attractive to me, so I started experimenting on my own by telling stories I read, learned and heard from other storytellers, and then began my own storytelling.”

From an avocation to a profession

In the early years, storytelling was a hobby Brown did occasionally for free. But as his reputation grew, he began to be invited to perform at various events. In the course of a year, he would tell stories at public libraries, pre-schools, festivals, private parties, corporate gatherings, radio shows and other settings. At the same time, people started asking him for CDs and digital recordings of his work.

With the increasing demand for travel, products and his time, Brown realized that he had to charge clients in order to sustain his business.

“There is a justice issue here,” he said. “Is it fair for me to work cheap while somebody out there is trying to make a living? I think I need to up my prices and present myself as a professional in fairness to my colleagues.

“There is another ingredient, which is thinking of storytelling as a performing art just as music and drama. For me to do storytelling, I want to represent the art and think of myself offering a performance as a professional expecting pay.”

Over the years, Brown developed an understanding of how to run business. He learned to negotiate pay, budget for travels, draft contracts and strike a work-life balance. For instance, if he had to travel a long way for a gig that didn’t pay much, he would find other gigs along the way in order to profit.

“The biggest lesson I have learned is (to) know when to say no,” he said. “Don’t turn storytelling into ‘This is what I have to do.’”

The thrill of telling

Brown delights in telling stories and in the chemistry his stories create in the crowd. He treasures oral tradition and wants to keep its dynamics alive.

“Technically, when I tell a story, I’m describing something I can see in my mind,” he said. “My storytelling is free formed. My gesture tends to flow out of what I’m saying.”

Brown has been a regular on the Columbia radio show, Radio Friends with Paul Pepper, for about seven years. Prior to that, Brown was a frequent guest on Pepper’s TV show, Pepper and Friends, on Columbia’s KOMU TV, where he sang and told stories to children. Pepper said that Brown’s conversational storytelling style has a broad appeal to people in the community.

“Larry tells stories and grabs your imagination,” Pepper said.

Sherri Griffin, who started Millersburg Preschool in Fulton, has known Brown for more than three decades. Their friendship traces back to the early 1960s, when Brown was a minister at the Millersburg Christian Church in Fulton and routinely stopped by the preschool to tell children stories. After he became a full-time professor at the University of Missouri in 2002, he still went back every spring during the annual Screen-Free Week and kicked off the event with a story night. Many children he told stories to are now parents of children who attend the preschool.

“Larry is very dramatic when he tells stories,” Griffin said. “Children are always very engaged. He sings and plays the guitar while telling stories … He often incorporates children into his stories and his singing.”

Challenges and hopes

With the rise of digital technology and decline of storytelling festivals, many traditional oral storytellers like Brown are faced with a shrinking market for their skills. To Brown, a solo storyteller born before the digital boom, keeping track of financial records and online marketing is a demanding job.

“My creativity doesn’t tend to be always on demand,” he said. “The demand of running a business takes away from the opportunities of creativity.”

Earlier this year, Brown retired from teaching at MU. Now, he has decided to devote more time to storytelling. Despite the competition and shrinking market, he is still confident about finding his edge by focusing on his niches such as biblical telling, and developing a more diverse repertoire that can appeal to young children and baby boomers. Storytelling is his lifetime career.

“I won’t do it if I don’t enjoy it,” he said.

Teacher Kayla Murphy pairs passions of photography, winemaking

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Photo courtesy of Kayla Murphy

Freelancing didn’t occur to Kayla Murphy as a possible career option until she chose it.

Murphy, 29, was born and raised in Macon, Missouri. After graduating from the University of Missouri in 2008 with a bachelor’s degree in science education, she returned home and, for three years, taught science at Macon Middle School.

Her interest in photography dates back to high school, when she took a yearbook class and was first introduced to photography. In college, she bought her first camera and started taking pictures of her trips, friends and family. She was fascinated by the fact that she could instantly capture almost anything through a small lens.

While working as a teacher, she picked up photography gigs on the side. As her passion for photography grew, however, it became a challenge to juggle her photography gigs and day job. Eventually, she left teaching for photography.

“It wasn’t an easy choice by any means,” Murphy said. “I wasn’t strong and emotionally capable of staying in that (teaching) job. For me, that wasn’t the best fit.”

Career transition

When Murphy first started her photography business, she went to the local economic development office and consulted the staff about what it’s like to run a small business.

To grow clientele, she mostly relied on word of mouth. Additionally, she used online marketing tools and regional advertising campaigns to get her name out. She also spoke at local high schools about being a small business owner and picked one high school student every year as a spokesmodel to help promote her brand.

Gradually, Murphy found her niche photographing weddings and senior portraits, and she was able to maintain a steady client base.

“What I love is the transition period in somebody’s life,” she said. “A senior graduating. A couple getting married. Those are exciting times.”

Murphy got into winemaking at about the same time as she started her photography business.

Chris West, the owner of West Winery in Macon, still remembers the first time he met Murphy.

“She came into the winery one day and wanted to sell some of her photographs,” he said. “Then she wound up staying around and learning how to make wine.

“She likes to get to the bottom of pretty much every question brought up to her and attends to details … I’m glad that we found her.”

Over the past six years, Murphy’s winemaking contract work and photography business have been growing cohesively.

“Winemaking is really cool,” she said. “I always love to learn new things.”

No typical day

Depending on the time of the year, Murphy must strategically manage her schedule for both jobs.

Spring, summer and fall are usually busy seasons for her photography business. Winter is usually her slow season and provides time for business planning.

For the winemaking, she hired a group of sub-contractors who are able to help her run things.

“In general, I have a schedule for photography if that applies,” she said. “Winemaking is more task-oriented.”

Work a lot. Miss a lot.

Juggling a private business and a contract job, Murphy often works late at night and during weekends.

“You work a lot, and you miss a lot as well,” she said. “Some months, I was like, ‘oh my god, what do I do? Why am I doing this?’ But then at the end of the day, I know why I did it … it’s a matter of give and take with everything.”

Looking back, Murphy’s father, Kevin Murphy, says his daughter has sacrificed a lot of family time for her business over the years.

“A lot of people out there want to be photographers,” he said. “It’s tough to grow a business in a small community with such a high competition … but she does a great job.”

She also must contend with income fluctuations. Since both winemaking and photography are seasonal work, Murphy said her earnings vary greatly as seasons change.

“It’s a matter of give and take with everything,” she said. “With being a self-employed individual, you have your job with you all the time, and you have more flexibility. But in order to sustain this lifestyle, you need to make adjustments and sacrifices.”

Cultivating talent

In the future, Murphy wants to bring some fresh talent into both her photography business and winery work.

Earlier this year, Murphy hired a high school student as a photography assistant who is paid by task. For the winery, she is looking for someone who is younger and interested in winemaking.

“I want to mentor the generation below me,” she said. “I’d like to cultivate their skills and talent, and hope they are able to bring different perspectives to the table.”

For Jason Smallheer, there’s never have a boring ride

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Photo courtesy of Jason Smallheer

When Jason Smallheer first saw an online ad about being an Uber driver two years ago, he found it ridiculous.

“This is the silliest thing that I have ever heard about,” he sneered. “What kind of idiots are going to get their cars, drive around and pick up strangers?”

At that time, he was a full-time freelancer working on various business consulting and writing gigs. As he was trying to find something that could provide some extra money, Uber started to make sense.

“I’ve got my car sitting on the driveway, and it’s losing value every second,” he said. “I thought ‘I’m going to try this out.’”

Last November, Smallheer finally signed up to be an Uber driver. Despite some lingering doubts, he went to Uber’s office hours in Columbia where he learned how to use the mobile app and how the insurance works. What happened next completely eliminated his hesitation.

“I walked out of the door, turned on the app on my phone, and then bang! Right away, somebody needed a ride,” he recalled. “I drove someone cross the campus and earned $4. I thought, ‘Hey, that was easy!’”

He sat down, did some math and set a goal.

“If I could make $200 a week, that more than makes my car payment and puts some extra dollars in my pockets that I can use for Christmas presents and haircuts,” he said. “So I started doing it.”

Make smart money

Born in Patterson, New Jersey, Smallheer moved to Columbia in 2009. With a background in media, marketing and sales, he quickly figured out how to strategically make money by driving Uber.

He usually drives on Thursday, Friday and Saturday nights when more people, especially college students, are out late. Instead of driving around downtown like many other Uber drivers do, he keeps an eye on south Columbia, where many students live and need rides to and from. On an eventful day like a football game day, he usually starts early in the morning and drives until late at night.

Smallheer is a target earner. Normally, he works hard to hit his $200 weekly goal. But he also has a baseline. If he drives for an hour without giving a ride, he stops.

“It’s a matter of learning where your customers are,” he said. “Always play with math and keep track of my mileage and earnings.”

Smallheer’s wife, Courtney Webster, said that making good money through Uber takes a lot of work from both Smallheer and his family.

“It requires us to organize our life differently in terms of the household and kids,” she said. “We need to rebalance things and work around the schedule.”

Sharing stories on the go

Smallheer loves talking to people and hearing stories.

“A lot of time when people get into my car, I will try to strike a conversation,” he said. “I have never had a night when I got off and felt bored.”

After driving Uber for a while, he created a group on Voxer, a walkie talkie app, that lets Uber drivers share stories, exchange jokes and update traffic conditions with each other.

“You never know who is going to get into the car,” said Zach Bahner, one of the drivers in the group.

Despite having initial concerns about Smallheer’s safety, Webster said Uber driving has turned out to be quite beneficial to the family and has made Smallheer a more well-rounded person.

“It has made him more grounded and have a more balanced vision of what the world is like,” Webster said. “He has more respect for everyone working, not just nine-to-five employees.”

Family funds

Although he enjoys driving Uber, Smallheer said he doesn’t see it as more than a side gig.

“You’re not going to get rich by (driving Uber),” he said.

He also found that the lack of a personal connection with the company may make him less likely to stick around in the long run.

Still, for now, the job helps him provide more for his family. As a father of three children, Smallheer never wants to say no to his family. Although currently working full-time for MBS Textbook Exchange as a marketing communications manager, he values any bit of extra money he can make outside his day job. Family is a main motivation to keep driving.

“Every hour I spend behind the wheel, I know that it’s going to something they want or need,” he said. “That’s validation for me.”

Educators rethink curriculum as more students turn to ‘gig economy’

This story is part of a series about the gig economy published by Missouri Business Alert

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Rudi Petry | Photo courtesy of Iman Woods

Rudi Petry graduated in 2013 from Stephens College in Columbia with a bachelor’s degree in graphic design. She took a full-time job in the field after graduation, but she soon experienced stress over her hours and pay. Instead of looking for another full-time job, she turned to freelance work.

While in college, Petry learned how to produce high-quality design work, manage design projects and present them to clients in a professional way.

As for how to start and manage a freelance business? She educated herself by researching online.

Looking back, Petry says she wishes she would have gotten more practical business training in college.

“If I took a basic entrepreneurship class, (the process of starting my own freelance business) would have been much faster and less terrifying,” Petry said. “Another thing is that I don’t even know what I don’t know about the business world. And since I work with businesses a lot, being able to speak their language is very important. So (an entrepreneurship class) would have been very helpful.”

Petry is one of a growing number of Americans who are part of the so-called gig economy, in which workers take on temporary or contract-based jobs instead of or in addition to full-time employment. According to a 2014 study commissioned by the Freelancers Union, 53 million Americans are independent workers. That’s 34 percent of the total workforce. Another study, from Intuit, predicts that by 2020, 43 percent of U.S. workers will fall into this category.

In light of those projections, some observers say colleges and universities aren’t doing enough to prepare students for the changing nature of work.

Diane Mulcahy, the author of the book “The Gig Economy” and a senior fellow at the Ewing Marion Kauffman Foundation, has been teaching a graduate business course, Entrepreneurship and the Gig Economy, at Babson College in Babson Park, Massachusetts, for five years.

“I started to teach (the course), because I felt like this is the future of work, this is a trend that is growing, and there is no sign of reversing,” Mulcahy said. “I still don’t see any other institutions teaching this. I think MBA schools in particular need to start addressing that curriculum. It doesn’t make any sense for our business schools to keep preparing our students to be full-time employees when it’s very likely that most of them will have some period working independently.”

In Missouri, several representatives for colleges and universities said their institutions are thinking about how the changing economy might affect their students, and what they as educators can do to better prepare graduates for the new job market. Those educators outlined steps that their schools are taking or should take in the near future:

Push projects and internships

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Photo courtesy of Tess Surprenant

Tess Surprenant, director of the Bloch Career Center at the University of Missouri-Kansas City, said the emergence of the gig economy has stirred conversations among UMKC faculty about how the school can best prepare students for short-term, contract-based or freelance work.

One way to help students is through real-world work opportunities like internships and projects, Surprenant said.

We typically encourage students to pursue at least one professional internship during their time in college; however, for younger students it can be difficult to find those internships, so we have encouraged them to look for opportunities to work on a project or offer short-term, ‘fill-in’ assistance to an organization,” she said in an email.

While some internships are highly organized and designed to evaluate talent for long-term professional employment within that organization, many internships are project-specific — an employer looking to hire talent for a limited period of time, to complete a project or fill a gap. This is essentially the same as a gig.” 

Incorporate entrepreneurship into curriculum

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Photo courtesy of Bonnie Bachman

Bonnie Bachman, an economics professor at the Missouri University of Science and Technology in Rolla, said Missouri S&T has been striving to develop an entrepreneurial mindset on campus through curriculum design.

For instance, the school developed a seminar series in the electrical and computer engineering department through which seniors learn about customer discovery, entrepreneurship, value proposition and using the business model canvas, a chart that presents structure of a business plan, as a foundation.

“We found that a lot of our students don’t necessarily want to go out and interview people, but the foundation of the business model canvas methodology is to go out and interview, to see if there is a market,” Bachman said.

The school also created an innovation and entrepreneurship curriculum, which features project- and skills-based courses that promote experiential and collaborative learning.

“To close the (educational gap), the curriculum needs to be more projects-based and skills-based,” said Bonnie Bachman, a professor of economics at Missouri S&T. “Communication, collaboration and knowledge about how to run a project are skill sets that are important to people who work for corporations, startups or on their own.”

Equip students with in-demand skills

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Photo courtesy of Clifford Holekamp

Clifford Holekamp, academic director for entrepreneurship of the Olin Business School at Washington University in St. Louis, stressed the importance of in-demand skill training. 

For example, he suggested that students should be familiar with software. He also emphasized skills in computer science, accounting, finance and digital marketing, which he said are highly valued in almost any industry.

“We need to equip them with skills in demand in the 21st century,” Holekamp said. “We should be equipping all of our graduates in the state of Missouri with the ability to earn a good living.”

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Photo courtesy of Tony Luppino

In recent years, faculty at the UMKC School of Law have been focusing on training students to adapt to emerging technologies such as new practice management tools, document assembly tools and social media.

“We’ve made a great effort to make (students) aware of different ways they can use technologies to be more efficient and to succeed as self-employed lawyers,” said Tony Luppino, director of entrepreneurship programs at UMKC’s law school.

The use of technology also enables lawyers, especially self-employed ones, to expand their clientele and make law service more affordable, according Ellen Suni, dean of UMKC’s law school.

Look to external resources and mentorship

Next semester, UMKC will host its first workshop on managing a part-time or full-time freelance career. According to Surprenant, the event’s tentative title is “Good Gig: The Promise and Pitfalls of Freelance Work.” The workshop will be open to anyone at UMKC, as well as any community members who are interested.

“Our idea is to bring in current students and alumni who work regularly as freelancers,” she said, “and we’ll try to get people who work in a few different industries and functions to give a more well-rounded view.”

As work sees seismic shifts, growing ‘gig economy’ offers opportunities, poses problems

This story is part of a series about the gig economy published by Missouri Business Alert

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Zack Stovall works as a full-time fundraiser but does side gigs as a standup comedian. | Courtesy of Stovall

Zack Stovall, 29, is not a stranger to gigs. A development coordinator by day and standup comedian by night, he is also a freelance writer and cartoonist. If you catch him at a lunch break, chances are he is sketching ideas for his next show.

Stovall moved to St. Louis from Benton, Arkansas, in 2009. During his frequent visits to The Improv Shop, a St. Louis comedy theater and school, his interest in standup comedy grew. Now a full-time fundraiser at St. Louis Public Radio, he continues pursuing his passion of comedy on a part-time basis.

“Comedy is my second career,” he said. “It fulfills the creative side of me.”

Stovall is one of a growing number of people who have full-time jobs but work gigs on the side.

A recent online survey by the online freelance marketplace Upwork and national advocacy group Freelancers Union reported that 55 million people, or roughly 35 percent of the U.S. workforce, made money in contingent jobs in 2016. That’s up from 53 million in 2014. The study also found that more than half of those workers did freelance work in addition to holding more traditional jobs, and that the majority of them did so by choice.

This economic phenomenon, commonly referred to as the “gig economy,” is characterized by individuals working on a short-term contract basis, having flexible work hours and receiving assignment-based pay. It used to be most prevalent in industries that rely heavily on manual labor, such as agriculture, transportation and construction. Now, driven by advances in digital technology, it has been rapidly gaining popularity among a wide range of professionals, including doctors, therapists, lawyers, accountants, interior designers and writers.

Nebulous definitions, data

What is the gig economy? Even experts have trouble settling on a precise definition.

“There isn’t a clear-cut definition,” said Derek Ozkal, a research and policy program officer at the Ewing Marion Kauffman Foundation. “You have a lot of nuances in picking a word. Some people may only drive for Uber. Some people may do lots of different things to fit their schedule and needs for income generation … I feel like there is a pretty wide spectrum in terms of the type of people using it and what they expect out of it.”

gig_economy_graphicCalculations of the size of the gig economy can vary depending on how the workforce is classified. Gig workers such as moonlighters, independent contractors and temps are spread among diverse occupations. They’re not easily identified in surveys of employment and earnings.

“I think one of the difficulties is that the people who are in the gig economy are counted in different places in federal data. Sometimes, they overlap,” said Alan Spell, research manager at the Missouri Department of Economic Development. “It’s hard to break out the exact number.”

The Bureau of Labor Statistics defines contingent workers as “those who don’t have an implicit or explicit contract for long-term employment.” It found that contingent workers accounted for roughly 2 to 4 percent of all workers in 2005, the last time it updated the figure.

State-level data about the gig economy is not available for Missouri, but the state should “mirror the U.S. in many ways,” Spell said.

“I won’t be surprised if we’re very close to the national average,” he said. “I just don’t know for sure at this point.”

Next year, the the Bureau of Labor Statistics will once again conduct the survey it took in 2005, providing more up-to-date numbers about the gig workforce.

Technology powers gig proliferation

Karen Marshall, a 31-year-old from the Chicago area, turned her lifelong interest in photography into a freelance business when she started selling photographs while also working full-time at the University of Missouri journalism library in Columbia. She said online marketplaces like Etsy and Redbubble help her reach more consumers and diversify her product offerings. For instance, through Redbubble, she can create and sell items like iPhone cases and bags adorned with prints of her photos.

Similarly, online freelance marketplaces like Upwork, LinkedIn’s ProFinder and Care.com have made it easier for service providers to connect with customers, and have created more opportunities for those new to the gig economy to do independent work.

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Derek Ozkal | Courtesy of the Kauffman Foundation

Digital payment systems work hand-in-hand with these platforms. People who offer on-demand services now can receive compensation through payment processors like Stripe, which underpins many on-demand companies. Stripe originally developed the instant-payout feature at the request of ride-hailing service Lyft. Lyft’s rival, Uber, has since started its own instant-pay pilot program. Marketplace platforms like Care.com, Instacart and Postdates will soon start giving workers the chance to cash out their earnings immediately.

According to the study by Upwork and the Freelancers Union, 73 percent of freelancers said that technology has made it easier to find freelance work, up four points since 2014. Sixty-six percent of freelancers said the amount of work they have obtained online has increased in the past year.

“The emergence of robust and easy-to-use mobile platforms is really allowing these types of arrangements to be easy to do,” Ozkal said. “I think that’s a huge thing that technology can do.

“(Technology) has increased the trustworthiness of the transaction between people.”

A shifting workplace ideal

Perceptions of gig-based work are changing.

The Upwork and Freelancers Union survey shows that 59 percent of independent workers think the freelancing job market has changed compared to three years ago. Of these, the majority said freelancing as a career is becoming more positive and respected.

The study also indicates that modern people value freedom and flexibility. Among full-time freelancers, the top three reasons people said they freelance were to be their own boss, to have work schedule flexibility, and to have work location flexibility.

“The lifestyle is pretty entrepreneurial,” Ozkal said. “To get into the gig economy, you really have to think of yourself like a business – how do I promote my skills? How do I get little bit financing if I want to do what I want to do? I think it’s a good thing to promote the idea that we all think like entrepreneurs. It’s going to increase our skills in the economy and improve the economy.”

Insecurity remains

This rising economic sector satisfies many Americans’ thirst for autonomy, but it also raises serious challenges in terms of benefits, income security, training and credentials.

Marshall hopes to become a full-time photographer and one day open a gallery. But she often finds herself struggling to make a profit.

“You put a lot of time and money into it, but you never know if you can make money out of it,” she said. “It’s nice to hear (compliments), but then the challenge is getting them to actually be, like, ‘I want to spend the money to buy your work.’”

Marshall is not alone.

The top concerns that keep many people from diving into the gig economy are debt, pay rate and predictability of income. Benefits are also a key issue. The Upwork and Freelancers Union study found that a fifth of full-time freelancers don’t have health insurance.

“I think there are a lot of things for policy-makers to consider,” Ozkal said. The most important, he said, “is getting a clear grasp of exactly who (gig workers) are … and what support should be. It’s a really nuanced topic. You can’t fix it just by changing one policy, because it’s such a wide range of people being involved.”

Cafe via Roma: A training ground for welfare recipients

Joann Dent likes to greet customers with an infectious smile and a cheery voice. A newly appointed manager of Cafe via Roma, she does everything from staff training, bookkeeping, food making to store cleaning. To her, the coffee shop is not just a business but also a family that helped and shaped her.

Situated in the south side of Missouri River and a block from the Missouri State Capitol, Cafe via Roma is a quaint European-style coffee shop in northern Jefferson City and a social enterprise owned by non-profit Central Missouri Community Action (CMCA).

When Dent joined the welfare program three years ago, she couldn’t even imagine living without the benefits. Now, 26, with a 3-year-old son, she can’t think of anything better than earning a living on her own.

Born in East St. Louis, Illinois, Dent moved to Jefferson City to be with her working mother and sister when she was 21. She signed up for TANF after she gave birth to her son Christian in early 2013. Through the Missouri Work Assistance program run by CMCA, she received soft skills training, attended resume writing workshops, took a short-term nurse assistant class, and volunteered for a year at Cafe via Roma.

She was a standout employee during her time volunteering at Cafe via Roma, and two months ago, she was promoted from a volunteer to be the manager of the cafe.

“Before I got on the work assistance program, I kept thinking, ‘Oh, I can’t work too many hours. I can’t live without my food stamp and TANF money,'” Dent said. “Now, I’m like, ‘I don’t care about the food stamp. I can pay myself.'”

A social enterprise and job-training lab

The idea of purchasing a coffee shop was driven by CMCA’s ambition to seek more revenue streams.

“As any business might do, we looked at where our revenues come from to operate our program,” said Darin Preis, executive director of CMCA. “The idea was we would create a business and generate profits that we can put into our program. At the same time, it can be used to train people in the Missouri Work Assistance program.”

After three years of planning, CMCA purchased the coffee shop in November 2014 for $65,000.

Initially, CMCA encouraged work assistance program participants to work as volunteers and count volunteer hours towards required work activity hours. Dent was one of the first volunteers working there.

Over the next 15 months, four managers came and left. When the last one left, Dent stepped up and offered to take the management position.

“Joann called me at home (one) evening, saying, ‘I think I can do this. I think I’m ready to step up and give it a shot,'” Preis recalled. “I thought, ‘Gosh, among all the people I want to give a shot to, this is a perfect example.'”

Preis emphasized that the coffee shop isn’t just a for-profit enterprise, but also a lab for on-the-job training.

“It’s really important to know that a lot of people in the (Missouri Work Assistance) program, the biggest skill set they need to work on is soft skills such as customer service, customer interaction, appropriate attire, expectations of employers, etc,” he said. “We just finished building a training curriculum that we are going to specifically apply to our cafe staff to really bulk up the training component…because ultimately, whenever they are done working with the cafe, we want them to be hirable and successful wherever they go next.”

Although the business hasn’t been easy, and the profit margin has been slim, CMCA managed to hire five employees, including Dent. As a manager, Dent is responsible for teaching staff everything from food- and drink-making to catering and customer services. She and former employees created cheat sheets with detailed recipes and step-by-step instructions.

Rebecca Schuessler, 24, signed up for TANF and the Supplemental Nutrition Assistance Program, or food stamps, in November 2014 when her daughter was born. Schuessler joined the Missouri Work Assistance program last November and has worked at Cafe via Roma ever since. Now, paid $8 per hour as a permanent employee, she earns way more than the baseline requirement for welfare participants.

“I like working here,” she said. “The best parts are the homy atmosphere and the customers.”

Dent just moved into a house with two bedrooms. “This is my first time living in a house,” she said.

She enjoys working at the cafe and is excited about the future.

“I like coming in everyday and interacting with customers,” she said, “and sometimes I just go outside and greet people walking by.”

From a business perspective, Preis plans to put more efforts into marketing the coffee shop.

“When we tell people about (the coffee shop), their responses are very positive,” he said. “They think it’s smart of us to try that. It interests them to check out the cafe. We need more of that.”

Welfare reform produces mixed results 20 years later

Mariah Latimer unbinds a full head of tight braids with fast fingers, combs the hair with a tooth comb orderly and creates varying layers of thickness without a pause.

It’s all part of a free 1,500-hour course she is taking at Paul Mitchell The School, a cosmetology school in north Columbia.

Latimer, 21, is a single mother of a one-year-old son, Ezekiel. She has been on welfare for about a year and a half. Barely making ends meet with $234 monthly temporary cash assistance and $356 monthly food stamp benefits, she said she constantly feels butterflies in her stomach.

“The fact that benefits may not always be there scares me,” she said, “so I want to (be financially independent) when I have the skills to work.”

Latimer is one Missouri welfare recipient who obtains job training, vocational education, childcare services and employment assistance from the Missouri Work Assistance (MWA) program, which is part of the current welfare system known as Temporary Assistance for Needy Families (TANF). Two decades after a domestic policy overhaul, the welfare system has helped many people like Latimer for a certain time period, but it still has pitfalls. In 2014, the number of families on TANF for every 100 families in poverty nationwide slumped for about two thirds to 23. The substantial decrease in welfare caseload, however, hasn’t been accompanied by lower poverty levels. Missouri has seen the similar paradox.

Candace Iveson, a clinical instructor at the University of Missouri’s School of Social Work, is skeptical about the effectiveness of the reform.

“If the goal is to reduce the case load, it has been very successful,” she said. “If the goal is to lift the family to self-sustaining position, that has not been successful at all.”

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Twenty years ago last month, President Bill Clinton signed a welfare reform bill that brings self-reliance to the welfare equation and focuses on getting people into the workforce. The policy provides a $16.5 billion block grant for states annually since the reform, shortens lifetime limits on cash benefits to five years, requires recipients to work or get training, and gives flexibility to states in shaping their own welfare programs to meet their particular needs.

As a result of those changes, people like Latimer have to spend a certain amount of hours a week in some work activity to qualify for cash welfare. Work activity can be a job, volunteer work or short-term job training like the cosmetology class. Currently, Missouri has 10 contracted agencies that run the Missouri Work Assistance program in 19 regions with 94 total offices. Despite these work-focused efforts, the results haven’t been broadly optimistic.

“There are instances that the program has helped families,” Iveson said. “They are specific examples: families that just need a couple months of help or help with job interview skills, or are just teetering on the edge. For families that are any farther, it’s not very helpful.”

Rising spending on non-core areas

In 2014, Missouri was one of 21 states that spent the majority of welfare money on non-core areas, according to a Marketplace report. Non-core expenditures are defined as those in areas beyond cash assistance, childcare and work assistance programs. In 1997, right after the introduction of TANF, about 80 percent of all TANF funding went to those main categories. In 2014, only one-third contributed to those areas.

Cash assistance was cut by more than a half between 1997 and 2014. Spending on work assistance programs remained a small segment of total amount (of the state’s total welfare spending). Child care funds have fluctuated moderately over the past 20 years, accounting for between 10 and 25 percent of total spending in any given year. By contrast, the amount allotted to the other, or non-core, areas has seen a robust increase.

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Clark Peters, an associate professor at the University of Missouri’s School of Social Work, looks at the increasing state’s autonomy with skepticism.

“What the critics would say is that oftentimes money gets funneled to people who have political capital,” he said. The difficulty in distributing the money, Peters said, is “how to strike a balance that allows for creativity and, yet, the most disadvantaged get assistance.”

In Missouri, the maximum TANF benefit accounts for less than a fifth of poverty line, which is $1,680 per month for a family of three. Adjusted for inflation, the value of Missouri’s $292 TANF monthly benefit for a single-parent family of three declined by almost a third between 1996 and 2016, according to the Center on Budget and Policy Priorities. Without spending increase, inflation will continue to erode the benefits’ value, leaving an expanding gap to be filled by non-cash benefits such as food stamps.

Tougher rules shrink welfare rolls

In early 2015, Missouri lawmakers passed a law that reduced to 45 months the length of time a family can obtain welfare benefits. The law went into effect in January. Only eight states have shorter lifetime limits than Missouri, with Connecticut setting the floor at 21 months. The others are Arizona, Arkansas, Connecticut, Delaware, Idaho, Indiana and Kansas.

“This is one of the great myths about welfare,” Iveson said. “The reason why they did time limit was that there was a sense that people got on welfare and collected it forever. That has never been the case…The vast majority of people don’t get on it and stay on it forever…That’s not true before and after the change of law.”

More than 6,000 children living in needy households and about 3,000 needy families are expected to drop out of the program when the new bill takes effect, the Associated Press reported.

In addition to the change on time limit, the bill also strengthens the requirements for low-income parents to get job training, do volunteer work or complete vocational education. That means, before getting cash benefits, participants have to outline a personal responsibility plan. If they fail to engage in work within six weeks, their benefits will be cut by half.  If the problem is not fixed, they lose the entire assistance.

One side-effect of the new rule is that “several families in poverty aren’t reaching out anymore,” said Angela Hirsch, community services director at Central Missouri Community Action (CMCA), a non-profit running the Missouri Work Assistance program in eight counties in central Missouri.

“It’s just too much a hassle,” Iveson said.

A second chance, not a promise

Most job training or vocational education programs are short term, which are unlikely to prepare participants for middle-class jobs or make up for years of lack of basic education, Hirsch said.

“It’s hard to assess a participant’s career vision, because they have limited resources and live day to day in crises,” said Brooke Eskridge, community services program manager at CMCA. “We help them break down those walls, start dreaming and goal-planning in a different way, try to get them to think farther beyond the barrier right here.”

Getting out of TANF doesn’t mean those families are self-sufficient. For many of those families, life can still be fraught with challenges. Even those who do find jobs may not necessarily jump out of poverty immediately. Instead, they often work low-paying jobs.

“I don’t know if anybody gets a career out of MWA, but they do get a start towards a career in MWA,” Hirsch said. “I think it’s very effective at getting people a foot in the door of employment, and getting them their first job so that they have something to put on their resumes.”

Iveson said that the reform is unlikely to produce immediate results. “We can address this if we are willing to spend a lot of money on it and have some patience,” she said.

Latimer had a rocky childhood. Born in Kansas City, Missouri, Latimer spent most of her childhood and teenage rootless. Since the time she was 5, Latimer has lived at more than a dozen of foster centers, at a teen shelter, with an adoptive family, and been homeless for almost two years. When she eventually moved back to Columbia at the age of 19, she found herself, unexpectedly, pregnant. Having been through a time of depression, she said she is glad to eventually turn to the right place.

“I’m not a greedy person,” she said. “This (work assistance) program has helped a lot.”

Now, five months pregnant with a second child, Latimer feels stressed about the future. She said she is never content with relying on government benefits. Her goal is to eventually stand on her own feet and open a hair center that provides childcare services for single-parent customers.

She is graduating next April. Starting out, she expects to work at a hair salon and earn enough to leave welfare behind.

“I want to be a provider,” she said. “Now, knowing that I’m able to work towards my dream and that dream can help me provide for my children without the assistance, I’m more relieved.”