They’re stuck in pieced-together part-time gigs and often getting paid off-the-books. Too discouraged to look for regular jobs, these are the inhabitants of what trendwatchers are calling the “gray economy.” In California alone, their numbers, which include many freelance workers, are 6.2 million, or over 16 percent of residents.
Like a dismal cloud spreading over the sky to blot out the sun, the gray economy is trapping millions of Americans in a dark world of haphazard and insecure jobs, few or no benefits, nonexistent chances for advancement, and little recourse if they get screwed.
As Tiffany Hsu explained in a recent LA Times report, measuring the extent of this economic netherworld is challenging:
“It’s hard to track the growth of the gray economy because so many employers hide workers for tax purposes. Experts generally agree, however, that the ranks of the underemployed swelled during the recession — more than in past downturns — and have remained substantial in an unsteady recovery.”
Some experts fear this is more than a cyclical change, it’s evidence of a more fundamental shift toward job insecurity. This shift appears to be driven by a myriad of trends and policies, from globalization to outsourcing to shareholder value ideology which focuses corporate attention to short-term profits and stock market manipulation. These factors, plus the decimations of unions and the giant Wall Street-driven economic shocks which create high unemployment, have shifted power away from workers and toward employers who seek their short-term advantage no matter what the social and economic costs. Starting in the ’70s, the lifetime career at one company gradually shifted to a less secure full-time job, then work as an independent contractor, and now, finally, to under-the-table work.
Is this really where we were supposed to end up? Wasn’t our great capitalist project meant to protect us from the arbitrary conditions that made life miserable for so many workers who came before? The price we will all pay for this kind of employment is high.
Gray economy workers are at risk for low self-esteem, anxiety disorders, substance abuse, and depression. Authors of a recent study in Michigan found that chronic job insecurity was a stronger predictor of poor health than either smoking or hypertension, potentially shaving years off a person’s lifespan. For society as a whole, the loss of tax revenues is devastating to education, infrastructure and every kind of investment in our future. The poor health of gray economy workers creates a public health crisis. Businesses that play by the rules have a more difficult time competing, and basic trust in a fair playing field diminishes. Poverty and inequality are exacerbated.
It used to be we thought of gray economy workers as immigrant day laborers. But that’s changing. Now, the day laborers are often American citizens. And these informal workers are not just found on construction sites. They are building websites, providing tutoring and childcare services, and working in beauty salons.
At the most fundamental level, the gray economy creates a sense in which everybody is out for themselves, and evaporates the idea that we’re in this together, that Americans share a collective fate. Thread by thread, the gray economy unravels the social fabric.