I've been seeing the "lowest unemployment rate since 1969" blurb thrown around a lot this week. It got me to thinking (brace yourself or keep scrolling)...
When Uber's IPO launched earlier this year, their filing to the SEC stated:
"There were 3.9 million Drivers on our platform for the quarter ended December 31, 2018."
The most recent US figure I could find was 750,000 in 2017 so we're certainly much higher than that now, certainly over a million.
The proliferation of the "Gig Economy" in the digital age has completely altered the employment landscape over the past 3-5 years. Tens (maybe hundreds?) of thousands of people in the US are no longer unemployed because they have gig economy jobs:
Uber/Lyft, Airbnb/VRBO, Rover, Etsy, TaskRabbit, Rodan & Fields, Google Adsense - digitally driven industries like these and their dozens of competitors all have brought people to the realm of "employment", which is good. People need income, right? I'd like to see detailed Unemployment Rate facts that include this kind of data. I couldn't find it anywhere.
However, this new economy segment also worries me as these workers are all required to pay self-employment taxes and I'm willing to bet a large portion won't. My assumption is that most of this economy doesn't look at the $100 they made today and realize they should be putting the appropriate amount aside for taxes, 15% aside for Social Security and Medicare, some towards medical insurance if needed, and hopefully some into some kind of retirement plan. The blessing and curse of having income is that it's taxable income. For every $100 I make at work, I take home $71 because I am a cog in a larger financial machine and I need to plan for my future; nobody else is going to do it for me.
I'm worried that this mentality for taxable income may have a long-term effect creating a wave of people woefully unprepared for retirement. Before the Gig Economy went online and was an 'under the table' cash & small check establishment, not paying taxes was pretty easy and likely the norm, and in turn, probably also resulted in a smaller wave of currently unprepared retirees. However, with everything filed online, the IRS (assuming they're not in a government shutdown) could eventually catch up with these independent contractors since you can count on the major companies in the current Gig Economy, Uber, Airbnb, Google, etc, to absolutely file 1099s with SSN of who they paid out.
This issue in itself has a domino effect: If you've gone from unemployed to finally making some money, are you really going to go out of your way to pay taxes? Of course not, nobody really WANTS to pay taxes...
But when you don't, that money doesn't get distributed to our societal infrastructure like it's supposed to. Skipping out on paying taxes means you're withholding money from Public Education, K-12 and Higher Ed, Transportation, Infrastructure Maintenance and Development, Medicaid, Child Services, Social Security, National Defense, even down to local police, postal workers, bus drivers, home health aides, janitors, coaches, conservation workers, the list goes on and on. This is, of course, ignoring political/financial corruption. Greedy bastards can ruin any viable system.
Nobody wants to pay taxes, but until we devise and implement a different way to run things, that's how things like this are supposed to be paid for. While we don't live in a purely socialist economy, you're deluding yourself if you don't admit we already live in an obvious hybrid version of a capitalist and socialist one. We could privatize all our current socialistic programs, but that's a completely separate topic and thus far, has a mostly hideous outcome *cough* prison & correction systems shouldn't be profit centers *cough*
All that being said, if you're in the gig economy and it's just your side hustle, it makes sense to fly under the radar to supplement a little here and there, I get that. But my concern is with the vein of society that is treating it like their 9-5, long-term career.
So when we're boasting an new low in the Unemployment Rate, yet our National Debt just hit a record high within the same quarter, I can't help but think there is a very serious disconnect as to how we relate our daily economic lives to the national economic picture.