The current state of the economy is one in which there are conflicting signs of strength and weakness. Economists are finding it harder to use traditional data to project their opinions. One of the reasons for this is the rise of the “sharing economy”. If you are unfamiliar with this term you are probably very familiar with some of the apps and services that make up this growing sector of the economy that is somewhat unaccounted for in traditional economic statistics. The sharing economy is basically the sharing of resources. These resources can come in many different forms. Time, intellectual, and physical goods are just a few examples.
Airbnb and Uber are the poster children for the sharing economy but there are hundreds of others (i.e. TaskRabbit, Fancy Hands). With Airbnb people share their home. With Uber people share their car and time. An economic transaction occurs outside the norm of traditional transactions like hotels and taxis. It allows almost anyone with time to make money and anyone with money to save time.
Elon Musk has talked about a time in the future when someone who drives their care to work can stop just having it sit in the parking lot all day but instead have it drive around and pick up people who don’t have a car and need a ride. The economic transaction for this type of thing includes one person making money off a resource while another person saving money by not having to buy an expensive car. In traditional economics this could make the economy look worse off. Why? Decreased car sales.
In the same way jobs numbers can appear worse than they really are. If you own a house with spare space in a metropolitan area you could make a decent amount of money renting a room out on Airbnb. Maybe this allows you to not work full time at a traditional job. Or, maybe you get tired of the traditional 9 to 5 job and decide to take tasks on Task Rabbit. Maybe you are a stay at home parent whose kids are in school and you want to take on a few “jobs” during school hours every once in a while and sign up for Fancy Hands. In all of these “alternative work relationships” your work may not appear as such in the BLS jobs numbers since their data is compiled by surveys and answers based on how people view themselves. I doubt many Airbnb “landlords” considered it employment.
Though the sharing economy is a relatively new concept, A survey conducted by Pricewaterhouse Coopers indicates that 7% of adults are working on sharing platforms. This is expected to continually increase each year as people continue to adapt. Even further, a survey conducted by Pew Research indicates that 72% of American adults have used at least one sharing service.
A 200k+ monthly jobs report was a regular occurrence in 2014 and 2015, happening 19 out of 24 months. 2016 paints a much different picture as it has only occurred three times year to date. The global economy did not fall off a cliff in the last two years and while many uncertainties still exist, part of me thinks the shared economy is having a bigger impact and making the BLS jobs numbers look worse then they actually are.
For those who want to learn more about the sharing economy, here is an insightful podcast to listen to.