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From the Comfort of Your Phone: How App-Based Jobs Are Competing for the Hearts and Hands of Millennials

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For many low-skill workers, jobs in retail and food service have provided stable (if insufficient) income, but the sharing economy and application-based jobs are here to give them a run for their money, with millennials ready to lead the way toward a shift in the way we think about what work can be.

Since Airbnb and Uber launched in 2006 and 2009 respectively, dozens of other applications have joined in the sharing economy, offering convenience for customers and easy work for anyone willing to offer their services. Especially in major U.S. cities like New York City, Los Angeles, and San Francisco, work for these companies pays better than traditional low-skill jobs while also offering flexibility, minimal customer interaction, and minimal oversight from management.

 

While wages have been stagnant, the pricing for education, healthcare, and housing continue to increase. And with a federal minimum wage of only $7.25, most service industry companies have faced pressure but not much incentive to increase their wages. Take, for instance, some of the highest-paying retailers and restaurants, shown below, as referenced from Monster.com and Glassdoor.com.

 

Restaurant: Average $/Hour

Dunkin Donuts: 12.40

Starbuck’s: 11.41

Chik-Fil-A: 10.99

Jamba Juice: 10.86

Five Guys Burgers & Fries: 10.50

 

Retailer: Median $/Hour

Amazon: 14.65

Costco: 13.14

Lowe’s: 12.95

Target: 12.74

The Gap: 11.86

 

Many argue that this is reasonable for low-skill work because these are also often positions which turn over more quickly. But even as employees rise up the ranks, income grows only marginally, concentrating at the top. Median annual salaries for General Managers, Assistant Managers, and Operations Managers, still come out to <$30/hour over the course of a year and many retailers do not offer benefits such as Paid Time Off (PTO) or health insurance for positions below them. These roles often take anywhere from 3-10 years to grow into while simultaneously having higher expectations for attendance, such as requirements to work holidays. In a retail climate wherein stores nationwide are now expected to be open on Thanksgiving and Christmas day, this can take a significant toll on management. It’s even worse for managers in food service, who the Bureau of Labor Statistics reports make a median $24.43/hour, and are also often provided minimal benefits in spite of many being open 365 days/year.

 

A report from the National Low Income Housing Coalition states that as of 2016, the 2-bedroom national housing wage is $20.30/hour, meaning that most single parents working in retail and related fields simply aren’t making enough at any one job to sustain themselves and a child.

 

 

But an economy that’s based on participants contributing only minimally and working more directly with each other means lower costs for consumers and greater income for sellers, while offering more convenience to both. Airbnb hosts surveyed by Earnest reported making an average $924 monthly. One host in Atlanta reported $1653 in monthly net earnings with an average of only 6 hours work each month (this did not include the work involved with guest turnover, which in this instance was hired out).

 

Drivers with Uber and Lyft reportedly make $15.68 and $17.50 per hour before expenses, with drivers in major cities making $20-25/hour. And the possibilities are endless; food and grocery delivery apps such as DoorDash, Postmates, Eat24, and UberEats all pay an average $14/hour, with potential to make up to $25/hour during peak, especially in major cities. Applications for grocery delivery and dog walking are in the same range with Yummy, Instacart, Rover, and Wag also encouraging anyone with the customer service skills to jump on board and expand their brands, putting each person in charge of their own business.

 

 

That’s part of what makes these types of jobs so competitive with standard low-skill labor; rather than interviewing and being selective with candidates, start-up companies advertise to recruit potential workers, offer bonuses to sign up, and send reminders to candidates to complete sign up if they didn’t initially. They also send reports like customer ratings, tips about how to make more money, and any new bonus programs they’ll be offering. Independent contractors for these companies generally don’t ever have to interview or wait to be hired, although some companies like DoorDash and Wag do require brief training seminars before the first day of work.

 

 

 

 

But by far, the biggest challenge retailers face in competition for this market is time. An independent contractor chooses their own schedule and can often change it as needed, making it ideal in a culture that so highly values flexibility, particularly when this generation (and likely the ones following it) strives for more satisfaction in their work and greater work life balance in general.

 

This means that students, parents of young children, and anyone else looking to make some extra cash on the side can work with minimal commitment as often or as little as they like. It means that someone who wants to take an unpaid internship they’re passionate about can commit to it without sacrificing the freedom they need to make it a top priority in spite of it not paying their bills, which is rarely an option for young people hoping to expand their skill-sets and engage with leaders in their respective industries.

 

 

Opponents argue that the investment of experience someone makes in a company like The Gap or Target can offer them better positions in the future. Brands like Starbuck’s and Costco have programs designed to retain hard-working employees and encourage them to grow within the company and even attend college, but this is more the exception than the rule. It’s also true that potential risk factors exist in the sharing economy that are not present when someone has the protection of a major corporation on their side. But contractors are encouraged to take advantage of measures available to protect them while they’re working, such as dash cameras, the cost of which can be written off for tax purposes. As independent contractors are not technically employees, none of these jobs currently offer benefits packages, but this puts them on par with many other positions in the same pay range.

 

While we generally assume lower paying jobs are simply low-skill, what they often are really is low-commitment and low-interest. American companies often pressure employees to put their work ahead of everything else in their lives even if their wage is less than livable. But they’re going to need to offer more than that if they want to compete for the best and the brightest, who have options now to do work that’s truly fulfilling for them because of brands that give them the freedom both to be their own boss and to choose the level of commitment they feel is appropriate to meet their needs.

Sally Suarez

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