Tech/Gig Economy vs. All
Corporations have benefitted from the ability to keep wages absurdly low for decades. In conjunction, profits, share prices, and executive salaries have continued to climb exponentially across virtually all industries. Previous generations’ fear of the unknown and preference for stability over opportunity, along with the infiltration of corporate influence over politics, have allowed corporations to maintain this upper hand.
Enter the tech age, which has advanced to the point of threatening this control. People now have more data available to them that can drive their employment and consumer decisions rather it be wages or reputation.
The Current Field
From Uber to OnlyFans, and everything in between, the gig economy has created endless ways for people to step out of traditional W-2 employment and piece together multiple sources of income, often making as much or more than they historically have through traditional employment. Not to mention the growing demand for remote ready, tech-based jobs such as IT Support, Digital Marketing, E-commerce, Data Analytics, and Project Management just to name a few, that are geared toward the younger workforce demographic that has previously been the primary source of low wage labor.
The ability for retail investing across a multitude of platforms gave everyone the opportunity to benefit from the rapid growth in stocks/crypto.
Last but certainly not least, the abhorrent corporate cultures and aforementioned low wages have driven employees to their wits end.
Mix these things together and voila, you have the perfect storm for mass exodus.
The Power Play
We’ve all seen the media headlines about the great resignation, unemployment spikes, and wage increases. We’ve seen the Facebook comments sections filled with those who believe the younger generation is just generally lazy/entitled and that “nobody wants to work”.
There are many intricacies behind the way these pieces fit together, so for the sake of argument, I’ll focus on the main factors that are making contract work increasingly difficult to sustain.
· Keeping universal healthcare out
· Increased home costs
· Increased cost of household goods and maintenance services
· Increased cost of vehicles
· Increased gas Prices
· Crashing the market
A few data points about these that I feel compelled to add:
Medical debt is the leading cause of bankruptcy with over $140 billion worth of medical debt in collections in U.S.
As of this posting, the average home sale in the U.S. in 2022 is $507,800 and average household income for 2022 is $87,864. So, assuming a 20% down payment (which is also harder to do at these prices), a $406,240 mortgage at the current 5.5% rate comes out to a $2,883.23 monthly payment. That means based on this data, the mortgage payment on the average home takes up 39.4% of the gross average household income. The recommendation is that your mortgage take up no more than 28% of your gross monthly income.
The annual inflation rate for the United States is 8.3% for the 12 months ended April 2022 with food prices up 10.8%.
The consumer price index for used cars and trucks jumped up by 40.5% from January 2021 to January 2022.
Gas prices are up more than 55% from 12 months ago.
I won’t go into the endless cavern of market manipulation, but the S&P 500 is down nearly 16% in 2022, while the Nasdaq has dropped 25%. Crypto has also dropped significantly with ETH and BTC losing 53% and 37% respectively at the time of this posting. These represent the heaviest concentration of retail investors, including gig workers.
In the long term, it’s almost impossible for drastic changes in the ways we live and work not to occur. The speed at which these changes happen however, nobody can know for sure. What I am sure of is that we are entrenched in one of the most pivotal battles of class warfare the U.S. has seen in a long time, if not ever. Awareness of wealth distribution and inequality is at an all-time high. People increase the value placed on their time and are simultaneously more disenfranchised with employers than ever.
We’re at a stalemate, and much like watching the last few episodes of Ozark, we’re just waiting to see what happens next!