Today, while listening to TED Radio Hour on OPB, I had a small revelation. The gig economy could be a form of income redistribution. Not the scary, communist kind of income redistribution, but income redistribution none-the-less. Allow me to explain.
The gig economy refers to the new set of opportunities individuals have to earn extra money. Typically not full-time jobs, but rather significant sources of income that supplement a regular income or fill an income gap during regular unemployment. Sometimes these income opportunities are those that leverage assets, such as a home, car, or skill. Examples of the gig economy include Airbnb, Uber, and Taskrabbit.
While its common to make a few hundred dollars a month, some people make really good money in the gig economy. Today while listening to TED Radio Hour, I heard about someone that makes as much as $5k/month by listing their Ikea furniture assembly services on Taskrabbit. I've met people that bring in $50k-$100k per year renting out property on Airbnb. The opportunities don't end with the household names Airbnb and Uber. In cities like San Francisco and New York, you can pay for just about anything to be done for you. You can pay for on-demand car washes, yoga classes, marijuana delivery, laundry service, and of course food delivery.
I've always felt a mix of joy and discomfort with using these services. On one hand, it makes life so much more easy and efficient. On the other hand, its pretty disgusting that I can pay someone to do tasks that I could do myself. Only the richest people can afford to have someone come to their house and wash their car or hire someone to assemble Ikea furniture. Those services add up, spending hundreds each month on what many in America would consider luxury services. While many of my peers and colleagues don't consider themselves rich, the truth is that we are very well off and don't know life like the average American does.
So, today it dawned on me, this is a form of income/wealth redistribution! I certainly spend a decent amount of my discretionary income with companies that pay out to the people doing the gig. Its a stimulus of sorts. Instead of stashing away my income, I'm giving it to others in return for services. Every time I spend money on burrito delivery, someone that makes less money than I do is providing that service.
Maybe the gig economy isn't so bad after all? They more top earners in America spend discretionary income rather than save it, the more money we put into the pockets of lower income earners.The idea of wealthy people paying others to do things for them is not new. I do wonder though of technology makes these sorts of "luxury" services less expensive, enough so that the top 40% of earners can justify the spend, when it was likely just the top 5%-10% that could in the past. Is it enough to even the playing field, and distribute income more evenly?
Oh, and the best part? If I am right, the gig economy is in fact income redistribution, but without violating the fundamentals of a free market economy. No communism here!