In a conversation with getAbstract, Diane Mulcahy reveals how to find your way into the Gig Economy and discusses its benefits.
Even before she wrote The Gig Economy, Diane Mulcahy embraced a freelance career path. She took consulting gigs for private equity and venture capital firms, began teaching a course at Babson College and wrote for the Harvard Business Review and other publications.
Mulcahy spoke to getAbstract about how the world of work is changing.
getAbstract: How did you find your way into the Gig Economy?
Mulcahy: I really wanted more control over my time. I wanted to put together an interesting portfolio of work. And as much as possible, I wanted to be geographically agnostic. Do we really need an office to go to? There’s not any study showing that going to an office five days a week for eight hours a day makes anyone more efficient or productive. That way of working is crude and obsolete and inefficient. I don’t do my best work in my office, and I don’t think anyone does.
getAbstract: What did you dislike about working in an office?
Mulcahy: Everything. The soul-sucking commute. The soul-sucking face time and office politics. The unhealthy environment of being inside in a box for hours at a time. The one advantage is the social and collegial aspect of an office environment. But if you really want social interaction, the best alternative is coworking space.
getAbstract: Many critics focus on the disadvantages of the Gig Economy, but you seem to look past the downsides to the benefits.
Mulcahy: It wasn’t my intention to not focus on the downsides of the Gig Economy. It’s not very secure. You don’t have protections. I acknowledge that. But what I would say is it’s the exact same situation that exists in our jobs economy. There is no job security. You’re at will. Your job could be automated, eliminated or offshored at any time. The Gig Economy doesn’t solve all the problems in our work force, but I don’t think the downsides are materially different from what we have in the jobs economy.
getAbstract: In your book, you question the wisdom of taking on big student loans. What advice do you give students and parents about student loans?
Mulcahy: My conclusion on college education is that all of the data are clear that you’re still better off in terms of earning power if you go to college. Taking on some amount of debt is still a prudent financial decision. But I caveat that. What school do you go to? What do you major in? How well do you do? If you’re at a top-ranked school and majoring in an in-demand field and focusing on your studies, it makes more sense to take on debt than if you went to a lower-ranked school, majored in philosophy and didn’t do much work on your studies. It’s just common sense.
getAbstract: You also question the wisdom of homeownership. How should the conventional wisdom change?
Mulcahy: Homeownership can be financially ruinous. The problem is Americans buy too much house with too much debt. It’s unsustainable. The mortgage, the insurance, the taxes are a fixed cost, and owning a home in a world of much more variable incomes just doesn’t work as well.
getAbstract: How big is the Gig Economy?
Mulcahy: The general consensus is 20% to 30% of workers are in the Gig Economy. Platform work is just 1% of that. When people think of the Gig Economy, they think Uber, but that’s only part of it. Most people in the Gig Economy are consulting, they are working freelance, they are taking contract positions. It’s becoming more common at technology companies, even at Microsoft. In the media, in public relations, almost everyone is a contractor. They’re fully engaged, it’s just that they’re not working in permanent positions. Most estimates say the Gig Economy will grow to 40% to 50% of the work force in the next 10 to 20 years.
getAbstract: What advice do you give young people trying to prepare for this new style of working?
Mulcahy: First, change your mindset. The Gig Economy absolutely requires that you have what I call an opportunity mindset, and I contrast that to what I call an employee mindset. You really have to take control of your professional development, of your economic security. No. 2, have an exit strategy. Even if you’re already in a full-time job, get ready for when your job is automated, eliminated or contracted out. Third, always have a side gig. Gone are the days when you can have a job and say, ‘OK, I’m done. That’s it.” When you have a side gig, you’re extending your skills. If you’re a lawyer in a firm, your side gig might be sitting on a board and serving on the finance committee. So that’s extending your network and exposing you to new people and experiences.
getAbstract: What regulatory changes need to be made to catch up with the Gig Economy?
Mulcahy: Certainly the US government has been extraordinarily sclerotic in responding to changes in the way we work. One of the biggest issues government has not clarified is around employee classification. Are you an employee or an independent contractor? There are all these vague definitions. The government’s inability to be very clear pushes a lot of legal risk onto employers.