Minimum Wage: Neither the Opposite Nor the Alternative to the Gig Economy

By Jessica Lao

Recently, few terms have been as ubiquitous as the “gig economy” in business and academia alike. Even so, most texts still present it as either a source of freedom or threat to traditional well-paid, full-time labor, clinging to this dichotomy of security vs. flexibility even when the alternative—minimum wage payroll—has itself come under fire for inadequacy. Indeed, as the debate over whether P2P platforms ease unemployment or erode traditional labor rages on, much of the relevant discourse concerns only whether gig workers resemble employees or benefit-less independent contractors more. Perhaps an even more pressing question, however, asks whether the platforms’ unpredictable nature—as seen in erratic hours, a lack of benefits, or ease of termination—points to a model that is inherently oppressive rather than simply too new to have been regulated. To that end, simply designating workers as employees with minimum wage and benefits will not make the gig economy equitable, not without possibly destroying the high volume and flexibility that defined the industry in the first place. More importantly, neither would such a course address the stagnancy of opportunity in both minimum wage and low-skill gigs, as well as the failure of the legal system to modernize labor protections and definitions.

As case studies like Sprig have shown, even successful implementations of living wages and scheduled hours risk crushing the very flexibility that defined P2P platforms to begin with. And while lawmakers ought not fear curbing these platforms’ (largely nonexistent) spirit of entrepreneurship, neither should they forget how conventional labor, too, can be exploitative. Just as gig work offers only an anemic, price-capped version of freedom with little upward mobility, the poor conditions and pay of many of their traditional counterparts hardly offer a case to copy. On the other hand, while programs like portable benefits and charitable funds may help some gig workers, other ideas like upskilling may solve issues like the lack of advancement and risk of irrelevance that plague gig and low-wage workers alike. To go a step further, perhaps wider legal protections for all types of labor—or unlinking the idea of benefits from work entirely—could moot the need for such third-party nonprofits at all. The possibilities in which both the definitions of and solutions to these issues overlap are endless: instead of applying current wage levels to gig employers, how might improving the minimum wage, benefits, and career paths of conventional labor relieve demand for part-time gig work? Would that increase the prices remaining gig workers could fetch in turn?

As anticipation of the gig economy’s professionalization further blurs the line between it and wage labor, finding those answers will require looking beyond the stark dichotomy often set up between the two models. Rather than pitting the gig economy against a too-low minimum wage or vice versa, then, we can hold up the former’s flaws as a mirror to those of our own traditional systems and analyze how laws for both can interact for the benefit of all.