Should government reorganize around the reality of the sharing economy?

If there is an economic reordering, it is from the gig economy…  

According to a report in Forbes.com, 57 million Americans (36% of the U.S. workforce) are in the “gig economy.”  The gig economy is defined as a labor market characterized by the prevalence of short term contracts or freelance work as opposed to permanent jobs.  There is the possibility that a significant number of these workers may not be recipients of the health, leave, and other benefits associated with permanent work.

Compounding the change in the permanent workforce is the emergence of “artificial intelligence” defined as the theory and development of computer systems able to perform tasks that normally require human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.

The uncertainty of American labor, where more Americans are stringing together jobs in order to meet rent, and ironically where some gig economy workers who are busy stringing work together are also facing the elimination of such jobs (just think the Uber driver facing the probability of driver-less Uber cars), American government may find itself in the very near future trying to legitimize its role as the prime instrument of social organization.  A voter who sees no security in the labor market with no answers coming from her government may start a search for alternatives to government.

Not yet in dystopia …

I think the perception that artificial intelligence will create robots with zap guns turned on the last remnants of humans has been quelled.  The U.S. is not at risk, at least in the short term, of falling into a totalitarian scenario as a result of more workers employed in two jobs or a couple freelance contracts. The U.S. government should be prepared for slow down in economic activity over the next ten to fifteen years as a result of more Baby Boomers retiring.  Generation X, Millennials, and Generation Z are expected to live lower quality lives than their Baby Boomer parents and grandparents, including making less in income.  Lower incomes mean lower tax revenues for government which in turn means a reduced capability to react to an increasingly stressed electorate with social programs that may bring some relief.

Time to start thinking about solutions …

Lurking twenty years into the future is an existential threat to American government.  This is not a long time, approximately five presidential election cycles. While immediate term forecasts show a rebound in the American economy in 2020 (news that should make the Trump campaign happy), the younger portion of the Baby Boomer generation will start retiring within the next ten years.  This means the sell-off of assets in order to access cash that supplements fixed incomes from pensions.  Lower asset prices tend to be accompanied by higher interest rates. Higher rates means it will be more expensive for government to finance the programs necessary for caring for elderly Baby Boomers.

This has me wondering how younger generations may want to restructure the obligations of government when government is faced with this storm?

2 thoughts on “Should government reorganize around the reality of the sharing economy?

  1. kenski2013

    Some form of increased economic and social safety net will be needed to address the concerns Alton expressed in his essay. I can make the argument that the economic, social, and political changes being espoused by Bernie Sanders (paid college tuition, Medicare for all, paid childcare for all children to age 4) are an early push in the direction of dealing with some of these issues. The big issue is how to pay for all this. It may also be that more government control of business will be needed in the future, not something business is or will be in favor.

    Reply

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