Author of The Gig Economy

Adjunct Lecturer, Babson College

Senior Fellow at the Kaufman Foundation

You cannot rely on a job; there is no job security. You always have to have a side gig, and you always have to be thinking, "What's my next gig? What's my next opportunity?”

By Abigail Bliss

Before Uber cars dawdled on every street corner and Silicon Valley’s model for work-life integration had swept the nation, visionary Diane Mulcahy was talking, writing, and teaching about the gig economy. A new model for work both on a day-to-day basis and across the span of a career, the gig economy includes side-hustlers picking up extra income and pursuing their passion on the side, millennials cobbling together workdays from multiple sources of income through apps like TaskRabbit, Lyft, and Airbnb, and those who hop from job to job, seasonally. This phenomenon has grown to encompass an estimated 20-30% of the workforce, and Mulcahy’s course on the subject has been dubbed one of the Top 10 Most Innovative Business School Classes in the country by Forbes, since her first class five years ago.

Mulcahy practices what she preaches; she is currently an adjunct lecturer at Babson College, the author of The Gig Economy, and senior Fellow at the Kaufman Foundation, and has previously pieced together consulting gigs in private equity and venture capital, several visiting fellowships at universities in the U.S. and abroad, and spent two years traveling around the world.

We’re thrilled to kick off TheEditorial’s Side-Hustle Series with an expert – one who quite literally wrote the book on the subject – and to use her expertise as a framework for understanding the trend that’s transforming the job market. It will be through her insight that we contextualize the gigs and go-getters leaning in to the new structure of work in America. In a recent interview, our first in the series, I sat down with Mulcahy to learn about which factors drive millennials to swap the certainty of nine-to-five jobs for gigs and how we can expect the economy to evolve in the decades to come. Is there something inherently visionary about The Side Hustle?

You started teaching about the gig economy before it was really in the public consciousness. What did you see that the rest of us didn't?

I created the class about five years ago, and I don't know if I saw anything in the future, but I was definitely aware that there had to be a different way of working besides working one job, from nine to five, five days a week. I was interested in this idea of having a portfolio of work – a variety of things that were interesting and challenging and generated multiple streams of income. Then I read an article that used the term ‘the gig economy,’ and I said, ‘That's it!’ Within a week I had the syllabus created.

How has this class changed since you first started teaching it?

The students coming into the class have changed quite a bit. When I first started teaching it, the students who were enrolling were mostly interested in the economic trend and it was this arms-length thing that was happening in the world. Now, students come into the class, and they're about to graduate and say, ‘Everything is different! Tell me how to survive! How do I navigate this? How do I succeed in it?’ It's very personal. It was, at first, an intellectual curiosity, and now it's really personal.

As I've been teaching the class, I pay attention to what resonates with the students. A lot of the exercises that I have in my book came out of exercises that I do in class, and they're very personal and reflexive.

To what extent are gigs replacing the nine-to-five in America? What are the benefits and the drawbacks?

I think full-time employment is always going to exist, no matter what, but it is becoming a much smaller part of the workforce. Most estimates put the gig economy – which I'll define as everything that's not a full time job, including consultants, contractors, freelancers, on-demand workers, part-time workers – at about 20% to 30% of the workforce and suggest that it's only going to grow.

I think the tradeoffs for people are mainly around mindset – really getting your head around the idea that there is no job security and that getting a job is not the end goal. It's putting together a portfolio of gigs, having multiple streams of income. Working in the gig economy is much more proactive; you have to be proactive to get a job, and people change jobs all the time, but that's amplified in the gig economy, where you have to have multiple clients and multiple projects. I definitely find this in my class, and I find this among people that I interviewed for the book.

You talk about Employee Mindset versus Opportunity Mindset in your book. Would you clarify the difference?

The Employee Mindset, as I talk about it, is one that's much more passive. It's this idea that you get the job, and then you can outsource all of your financial security, stability, and professional development to an employer. That’s incredibly risky because employers aren't really taking that on; they're not really providing any sense of security or the same levels of professional development that they used to, and there is no job security.

I advocate this idea of an Opportunity Mindset, which is really taking on responsibility for your own professional security, financial stability, and professional development. In the gig economy, that's what's required. You're not leaving it in someone else's hands, and you can spread the risk around among many different projects, gigs, and clients.

Do you think the 'Gig Economy' is born of necessity? Or is it a new enlightened societal movement and passion?

Most of the qualitative surveys that have been done among people who work in the gig economy suggest that people are working this way by choice.

A recent report by McKinsey did extensive surveys, both here and abroad, among independent workers, and they found that over 70% of people are working this way by choice. That's a pretty damning indictment of how dissatisfied people are with the traditional nine-to-five. The other interesting finding is that this is really being driven by people who have choice – people who are professionals on the higher end of the earning income – and what it suggests is that people are working this way because they want control over their work life. They want control over when and where they work, so that they can balance their work life with their personal life and control the type of work they do and who they work with. Having that control is one of the main drivers for people choosing to work in the gig economy.

Are there areas of the country or professions that the gig economy is effecting more than others? Is the gig economy equally accessible to all Americans?

I don't know that there's really good data on the gig economy by industry. What I will say is that the gig economy reaches across industries. So, yes, it's Uber drivers and it's Instacart, but it's also lawyers and MBAs and accountants and graphic designers and software coders. There are platforms for all of those professions and industries and sectors. The gig economy is very widespread.

Is it equally accessible?

I think it's accessible, even if you're a high school graduate or still in college. I've had students go out and be Uber drivers while they've been taking my class. If you look on Upwork, even if, let’s say, you're a person who previously worked in retail or worked at a fast food restaurant, there are opportunities in the gig economy. Also, if you're a professional and an expert, there are opportunities in the gig economy.

If you're on the margins of the labor force – a stay at home parent, a person who's disabled, or somebody who's retired – and you don't want to work a full time job, it used to be hard for you to find something. You had to find a part time job but somebody else still controlled your schedule. Now, in the gig economy, there are so many opportunities to do work at home over a platform or to work when and where you want – as an Uber driver, for example, or on TaskRabbit. It takes all those people on the margins of the labor market, and it allows them to earn money while maintaining control of their schedule.

How has new technology enabled people?

These platforms really allow people to match much more efficiently. If you're a person living in a rural environment, you don't have to rely on your small town to generate economic opportunities; you can connect with people online.

You were quoted in The New Yorker advocating for a financially flexible life, lower fixed costs, higher savings, and much less debt in light of the prominence of the gig economy. You talk about personal responsibility, but it seems to me there have to be systems in place. What policies are you hoping for in response to the shift in the U.S. workforce?

If you want to talk about policies, our labor market is incredibly outdated. It's set up for people to be full-time employees, and it essentially penalizes everybody who's not a full-time employee. That has to change. Right now, in our country, there's this huge narrative around the benefits of being an entrepreneur, and there is a lot of lip service paid to people for being entrepreneurial. Yet, our employment system penalizes you if you go out and become self-employed; there’s a self-employment tax, whereby you essentially pay double what a full time employee pays. That self-employment tax needs to go away.

Right now, in the labor market, there are two categories: you're an employee, or you're a contractor. And, that's really outdated. As noted in The New Yorker article, I think there needs to be one category, and, as a society we decide, how do we want to take care of our workers? What benefits and rights and privileges do we think that people who work should get? And, then everybody gets access to those on a prorated basis.

Now, the Affordable Care Act was a game changer in supporting the gig economy because it means that even if you don't have a full time job, you can get health insurance in a way that is affordable. There are subsidies available if you fall below a certain income and if you really fall below even that income, there's Medicaid available.

Besides health care insurance, the ability to save for retirement is one of the things that people identify as really important. Luckily, if you're an independent contractor or an independent worker, you are actually better off than most employees because under the current tax system; you can save more and faster for retirement as an independent worker than you can as an employee. That's not very well known but that's a big benefit.

There’s still work to be done to access affordable insurance like disability insurance, which you can buy it as an individual on the private market, but it's expensive and it's difficult. We need to continue to separate benefits from a job.

With coal a hot topic in D.C., I'm worry that it'll take decades for them to get around to modernizing the labor market. Do you worry about this?

I don't know. There is a critical mass and a velocity around the gig economy. I think what happens with the Affordable Care Act will be very indicative.

How are gig economy workers replacing the identity they might have from being associated with a company?

That's a really interesting question. I think in terms of a community, a lot of people are working this way – most estimates put it at 20% to 30% of the workforce – and one of the things that's been great for fostering a sense of community in the gig economy is co-working spaces. Even in Boston, if you go to Workbar or WeWork, you can find people who are working from home or who aren't tied to an office, and that turns out to be a real community for people.

And what about their former identities as, say, a teacher?

I think that is why naming it ‘the gig economy’ has been really important. Maybe two or three years ago, I did webinar for Harvard Business School, and I had people send me emails afterwards saying, ‘Oh, my God! This is a thing! You've named it and now I can tell people. Oh, it's not that ‘I don't have a job.’ It's that I work independently in the gig economy.’ Even the fact that it's a popular term makes it easier for people to identify what they do.

In your book, The Gig Economy, you offer exercises on how to quit a desk job, but you caution people, as well. What are the risks involved and when is it a bad idea to quit the day job?

I think it's a bad idea to quit your day job impulsively and without preparation or a plan. What I advise for anybody who's in a full time job is an exit strategy. I ask people to imagine that they know that they're going to lose their job in six months. What would you do to prepare for that? \What would you do personally, professionally, and financially? Who would you network with? What opportunities would you start looking at? What skills would you go out and acquire? What training would you seek? What spending would you cut? What savings would you increase? What benefits would you make use of? Start doing all those things right away.

You always have to assume that this job is not forever. Most people change jobs every two to three years. Now, if you have a side gig going on, it opens up opportunities for the future, and, for a lot of people, a side gig that generates revenue could cushion the blow for losing a job. You cannot rely on a job; there is no job security. You always have to have a side gig, and you always have to be thinking, ‘What's my next gig? What's my next opportunity?’

In twenty years, how will most American jobs be structured?

Most American jobs will be structured as work. Instead of a VP of Marketing, what you're going to see is that companies will disaggregate the work that needs to be done by the VP of Marketing and say, ‘You know what? We don't need to structure this as a full time job. We can hire a part time marketer and a social media freelancer and work with a PR agency on a contract basis.’ You only need to look at the media to see how that's already happened. There aren't that many full time reporter jobs anymore, but there are plenty of freelance writing opportunities.

You can see that more concretely if you look to Silicon Valley. Look at where our most innovative, highly valued, high growth companies are, and we're not seeing GE-type companies emerge where they have 300,000 employees. Instead, we are seeing Facebook and Dropbox and Twilio and Twitter who have 2,000 employees…5,000…10,000. Companies are implementing a business model where they have a small core group of employees and that's it. If they need other work done, it comes from this variable, dynamic, contract-based, independent workforce. That's the model of the future.

Where do you turn to understand the changes in modern day America? Any authors or journalists?

It's very hard to make sense of what's going on in our country. I guess I've turned to a mix of traditional and emerging sources. So, traditional sources are The Economist, The New Yorker, The New York Times, the Washington Post, and The Guardian. Newer sources are places like the Intercept, ProPublica – places that are doing traditional deep investigative journalism into trends. I think those are probably the places. That was a hard question. That's a tough one.