Welcome to the Gig Life. The boom in independent work is changing the way we think about jobs and careers. Does Washington get it?

It’s been called the Gig Economy, Freelance Nation, the Rise of the Creative Class, and the e-conomy, with the “e” standing for electronic, entrepreneurial, or perhaps eclectic. Everywhere we look, we can see the U.S. workforce undergoing a massive change. No longer do we work at the same company for 25 years, waiting for the gold watch, expecting the benefits and security that come with full-time employment. We’re no longer simply lawyers, or photographers, or writers. Instead, we’re part-time lawyers-cum- amateur photographers who write on the side.

Today, careers consist of piecing together various types of work, juggling multiple clients, learning to be marketing and accounting experts, and creating offices in bedrooms/coffee shops/coworking spaces. Independent workers abound. We call them freelancers, contractors, sole proprietors, consultants, temps, and the self-employed.

And, perhaps most surprisingly, many of them love it.

This transition is nothing less than a revolution. We haven’t seen a shift in the workforce this significant in almost 100 years when we transitioned from an agricultural to an industrial economy. Now, employees are leaving the traditional workplace and opting to piece together a professional life on their own. As of 2005, one-third of our workforce participated in this “freelance economy.” Data show that number has only increased over the past six years. Entrepreneurial activity in 2009 was at its highest level in 14 years, online freelance job postings skyrocketed in 2010, and companies are increasingly outsourcing work. While the economy has unwillingly pushed some people into independent work, many have chosen it because of greater flexibility that lets them skip the dreary office environment and focus on more personally fulfilling projects.

Over the coming weeks, I will be writing about this profound shift and the three major trends that are central to it. These trends will have an enormous impact on our economy and our society:

1) We don’t actually know the true composition of the new workforce. After 2005, the government stopped counting independent workers in a meaningful and accurate way. Studies have shown that the independent workforce has grown and changed significantly since then, but the government hasn’t substantiated those results with a new, official count. Washington can’t fix what it can’t count. Since policies and budget decisions are based on data, freelancers are not being taken into account as a viable, critical component of the U.S. workforce. We’re not acknowledging their prevalence and economic contributions, let alone addressing the myriad challenges they face.

2) Jobs no longer provide the protections and security that workers used to expect. The basics ­ such as health insurance, protection from unpaid wages, a retirement plan, and unemployment insurance ­ are out of reach for one-third of working Americans. Independent workers are forced to seek them elsewhere, and if they can’t find or afford them, then they go without. Our current support system is based on a traditional employment model, where one worker must be tethered to one employer to receive those benefits. Given that fewer and fewer of us are working this way, it’s time to build a new support system that allows for the flexible and mobile way that people are working.

3) This new, changing workforce needs to build economic security in profoundly new ways. For the new workforce, the New Deal is irrelevant. When it was passed in the 1930s, the New Deal provided workers with important protections and benefits ­ but those securities were built for a traditional employer-employee relationship. The New Deal has not evolved to include independent workers: no unemployment during lean times; no protections from age, race, and gender discrimination; no enforcement from the Department of Labor when employers don’t pay; and the list goes on.

The solution will rest with our ability to form networks for exchange and to create political power. I call this “new mutualism .” You will be reading more about this idea in subsequent articles from me next week, as I believe that new mutualism will be at the core of the new social support system that we need to build for the new workforce.

REUTERS

While we wait for this morning’s jobs report, I wanted to make a quick point about the labor market. The fact that men have been faring better in the recovery — since 2009 — has been getting some attention lately. The Washington Post had a front-page article on the subject Thursday, based partly on a Pew Research Center report. Catherine Rampell has come up with my favorite term for the trend: the economic he-covery.

I do think it’s important to point out that this downturn — the recession combined with the weak recovery — has still been far tougher on men than women. That is, men haven’t outperformed women in the recovery nearly as much as men underperformed women in the recession.

Here are the relative changes in employment rates since the recession began, in late 2007:

And here are the changes in inflation-adjusted pay for full-time workers:

Of course, these changes haven’t been nearly enough to close the gap between the sexes: Men remain more likely to work, and more highly paid, than women. Slightly more than 67 percent of men 20 or older were employed in May, compared with 55.2 percent of women. The median weekly pay of full-time male workers, 25 or older, was $880 in the first quarter of this year, compared with $716 for female workers.

By DAVID LEONHARDT, NYTimes Economix Blog

In spite of the U.S. Census data for the past decade showing continued job de-centralization, there is now much anecdotal evidence for the just the opposite. The Chicago Crain’s Business Journal reports that companies such as Allstate, Motorola, AT&T, GE Capital, and even Sears are re-considering their fringe suburban locations, generally in stand alone campuses, and may head back to downtown Chicago. The irony of Sears possibly moving back to downtown could not be greater, having abandoned the country’s tallest building for an equally huge, though horizontal, building 45 miles from the Loop over 20 years ago.

The New York Times has been reporting this week that UBS, the huge Swiss banking firm, is considering moving their U.S. headquarters back into New York City, possibly to the next World Trade Center building, from Stamford, Connecticut. Even downtown Detroit, the basket case of American downtowns, has seen four major corporate arrivals in recent years … most recently the headquarters of the parent company of Quicken Loans.

The reason in nearly every case? The millennial generation is demanding it. Highly-educated young workers, the life’s blood of many industries, have been flocking to center cities in recent years. Trying to recruit this talent to Stamford, Conn., or Hoffman Estates, Ill. is exceedingly difficult. They are voting with their feet for a hip, high-density walkable lifestyle and a reverse commute to the ‘burbs is not in the cards for most of them.

The companies moved out to the suburbs to attract their baby boomer parents, raising their kids in suburban isolation. The millenials are doing what many generations have done in the past; they have rejected how they were raised. This once again shows that building a high quality residential base will lead to the attraction of jobs…only this time it is back to the future.

via Brookings
Christopher B. Leinberger, Visiting Fellow, Metropolitan Policy Program

The UBS trading floor in Stamford, Conn.

Fifteen years ago, New York City’s reputation as an international financial center was called into question when the giant Swiss bank UBS moved its North American headquarters to the Connecticut suburbs, where it built the largest trading floor in the world. Now, though, UBS is having buyer’s remorse. It turns out that a suburban location has become a liability in recruiting the best and brightest young bankers, who want to live in Manhattan or Brooklyn, not in Stamford, Conn., which is about 35 miles northeast of Midtown. The firm has also discovered that it would be better to be closer to major clients in the city. As a result, UBS is seriously considering a reverse migration that would bring its investment banking division and up to 2,000 bankers and traders back to Wall Street and a new skyscraper at the rebuilt World Trade Center, according to real estate executives and city officials.

“They just can’t hire the bankers and traders they need,” said one landlord who has spoken with UBS but requested anonymity so as not to alienate a potential tenant.

The bank is also looking at several Midtown locations, and Connecticut is sure to wage a fierce battle to keep UBS in Stamford, where it is the largest private employer and the biggest taxpayer. A final decision is perhaps months away, and any move would not take place until 2015. But over the last week, UBS has engaged in negotiations with the developer Larry Silverstein over the terms of a potential financial deal at 3 World Trade Center, an 80-story office tower that he plans to build at 175 Greenwich Street. The return of UBS would be a boon to New York, which in past decades often suffered from corporate defections that were fueled by a sense that computers and telecommunications had made a Manhattan location more of a luxury than a necessity.

The move would be the latest sign that New York has regained its allure as a caldron for the young and creative. Six months ago, Google paid nearly $2 billion for a large building just north of the meatpacking district, in the same Manhattan neighborhood where many of its employees live.

“A key piece of the mayor’s economic strategy has been to make New York City a place people want to be,” Deputy Mayor Robert K. Steel said, “and more than ever the city is the ideal location for any company, like UBS, that succeeds by attracting a talented, motivated work force.”

A UBS trader in his 20s said that like many of his peers at the firm, he would have preferred a job in New York City, where he lives. “I mean, it’s annoying,” said the trader, who asked that his name not be used because he was not authorized to speak about the possible relocation. “I take Metro-North. I live pretty close to Grand Central, so it’s not a terrible commute. But it’s not ideal.” The trip takes about 45 minutes to an hour, depending on how many stops the train makes. He added that “the bank’s plan is to move to New York, but it’s mostly to be closer to clients.”

UBS has hired the real estate brokerage firm CB Richard Ellis to explore new space. A UBS deal would also be a vindication of a multibillion-dollar effort to rebuild the World Trade Center complex. After the terrorist attack on the trade center, there was widespread debate over the future of the city’s financial center downtown. Since then, the residential population there has swelled.

Last month, Condé Nast, publisher of Glamour, The New Yorker and Vanity Fair, signed a deal to be the anchor tenant of 1 World Trade Center, the signature skyscraper at the northwest corner of the site. Mr. Silverstein has the right to build three towers along Greenwich Street. The first one is already under construction, and the city has pledged to take space in it. But he has long sought a large financial tenant for what is known as Tower 3, which features five trading floors at the base, and will be built before Tower 2. A possible UBS relocation, which was first reported by Bloomberg News last week, would be a major blow to Stamford, where a quarter of the office space is vacant.

Mayor Michael Pavia of Stamford said UBS executives had been noncommittal, saying they had “no firm plans, nothing that they can report at this time.” Mr. Pavia said he and Gov. Dannel P. Malloy, a former Stamford mayor, were “committed to keeping UBS here.” Connecticut’s economic development commissioner, Catherine Smith, said: “We just want to make sure that Connecticut has a fair shot. We love having them in the state and hope they’ll stay. But you don’t always win these competitive battles.”

Mr. Pavia said UBS had about 3,000 employees in Stamford, down from more than 4,000 a couple of years ago. The bank, which leases but does not own any space in Stamford, is not expected to move all its employees out of town. UBS issued a statement saying that “we routinely evaluate our space allocation as these leases expire and/or space becomes available.”

In wooing UBS, New York City landlords have tried to capitalize on Connecticut’s recent decision to raise taxes to help balance the state budget, which has been criticized by some business groups. But it did not appear that UBS’s interest in moving stemmed from the tax increases. The firm’s review of its real estate needs began many months ago. UBS had already considered and rejected two Manhattan locations, 4 Times Square in Midtown and the World Financial Center downtown, before it started talks with Mr. Silverstein about the World Trade Center.

UBS, then known as Swiss Bank, touched off cross-border recriminations and municipal hand-wringing in 1994, when it announced plans to move from its two Manhattan locations, one in Midtown and the other in the financial district, to Stamford. City officials and real estate executives feared that New York was about to endure another wave of corporate departures to the suburbs. Some experts suggested that financial firms no longer needed to be in Manhattan and close to Wall Street because of the spectacular growth of computerized trading and telecommunications.

Connecticut sweetened the pot for UBS by dangling what was supposed to be a $120 million package of tax breaks and interest-free loans, although the actual value of the incentives turned out to be substantially less. The bank erected a trading floor the size of two football fields, packed with more than 5,000 computer monitors.

By Charles V. Bagli
via NYTimes, June 8

Sam Lessin sold his Web start-up to Facebook for millions last year, and Facebook promptly shut it down. All Facebook wanted was Mr. Lessin. That is what it has come to in bubbly Silicon Valley. Companies like Facebook, Google and Zynga are so hungry for the best talent that they are buying start-ups to get their founders and engineers — and then jettisoning their products.

Some technology blogs call it being “acqhired.” The companies doing the buying say it is a talent acquisition, and it typically comes with a price per head. “Engineers are worth half a million to one million,” said Vaughan Smith, Facebook’s director of corporate development, who has helped negotiate many of the 20 or so talent acquisitions made by Facebook in the last four years. The money — in the form of stock — is often distributed among the start-up’s founders, employees and investors. The acquired employees also get a rich salary and often more stock options, which makes this a good time for entrepreneurial engineers.

Mr. Lessin, who is 27, happily traded his dream of becoming the next Internet superstar for a prominent job with Facebook. “The impact here is astronomical,” said Mr. Lessin, whose start-up was called Drop.io. “It’s awesome.” But the deals may not be so good for everyone. Some Silicon Valley veterans fear that companies are overpaying for talent and that some of the acquired employees will defect as soon as they can, perhaps because they will get restless in a corporate environment. And venture capitalists, who hope for windfalls in the tens or hundreds of millions if not more, will only grudgingly settle for less.

“It is not what we are aiming for as investors,” said Dave McClure, founder of 500 Startups, a venture fund. “We are trying to build large, lasting businesses.” Still, Mr. McClure and other investors said a talent acquisition that offers a modest payoff is better than no deal at all if a start-up sputters. And while a sale for a few million will not make or break their funds, it could amount to a tidy sum for an engineer just out of college, they said.

“Who are we to tell a young entrepreneur that they can’t have their first million?” said Paul Graham, a partner at Y Combinator, a well-known incubator that has invested in hundreds of start-ups. The talent acquisitions are a reflection of the most competitive market for computer whiz kids in more than a decade. Big companies like Google and tiny start-ups complain that they cannot find enough good people. They are dangling new perks and incentives, from free iPads to lessons in entrepreneurship, to lure them.

“The war for talent has gotten even hotter,” said Scott Dettmer, a lawyer who has advised technology companies for decades. “And this is another vehicle to satisfy the insatiable quest for talent.” Perhaps no one has jumped on the trend more enthusiastically than Facebook, which has bought a string of small start-ups with names like Parakey, Hot Potato, and Octazen. Almost all their products have been killed.

In 2009, Facebook bought FriendFeed, a service to help people track the online activities of their friends. Tech insiders thought it was trying to compete more effectively with Twitter. But Facebook was really after FriendFeed’s dozen well-regarded product managers and engineers, including two of its founders, Bret Taylor and Paul Buchheit, who had also worked at Google. “We really wanted to get Bret,” Mark Zuckerberg, Facebook’s chief executive, said in an interview last year. While the FriendFeed service remains available, it has received no upgrades or new features. Of the 12 employees who joined Facebook, eight remain, and Mr. Taylor is its chief technology officer. Mr. Buchheit, best known for creating Gmail, has left.

Neither the acquired nor the acquirers like to talk numbers. But the acquisitions are generally in stock, and employees typically must wait a year or more before they can sell their shares. Facebook says the deals are worth it because the company needs creative entrepreneurs who can also help keep Facebook’s start-up culture alive. “The measure of how well these work for us is that the C.E.O. of every acquisition we’ve ever done is still employed at the company,” Mr. Smith said.

But the size of some deals is raising eyebrows. It was widely reported that FriendFeed was bought for about $47 million, or about $4 million for each employee, though some money went to its outside investors. When Facebook bought Drop.io for an undisclosed sum, only Mr. Lessin, a friend of Mr. Zuckerberg’s since college, joined Facebook. He is now in charge of the user profile pages. Facebook paid a few million dollars for Drop.io, according to people briefed on the deal who would speak only on the condition of anonymity because the terms of the deal were confidential. Facebook declined to comment on the prices it paid.

“Some per capita values seem hard to justify,” said Randy Komisar, a longtime venture investor. “But there is not a lot of proven talent in areas like social networking that are battlefields for today’s companies. People will look back and realize that they overpaid in some cases. But in the heat of the moment, they may not feel they have a lot of options.”

In the interview last year, Mr. Zuckerberg suggested that paying top dollar for people like Mr. Taylor and his colleagues at FriendFeed was justified: “Someone who is exceptional in their role is not just a little better than someone who is pretty good,” he said. “They are 100 times better.”

Other companies are more circumspect about their strategies. Google declined to be interviewed on the topic. In a statement, it played down its involvement, saying that even if a service from an acquired company was shut down, its ideas often surfaced later in Google products. Zynga said it bought 12 companies in the last year, and an unspecified number of those were for talent. One was Area/Code, a gaming studio in New York with 20 employees. While it kept one of Area/Code’s mobile games, Drop7, Zynga said it bought the company largely for the design expertise of its employees.

At a recent networking event for start-ups in Silicon Valley, many entrepreneurs talked about possible deals. Alexander Moore, who is 27, said he had never heard about talent acquisitions when he started Baydin, which helps people organize their e-mail inboxes, in Boston in 2009. He has since relocated his three-person start-up to Silicon Valley. “Here it’s happening all the time,” he said, “and it’s something we’d definitely consider.”

By MIGUEL HELFT
Published: May 17, 2011
via NYTimes

From the Bureau of Labor Statistics comes a cool chart on the gender pay gap for full-time jobs, sorted by industry:

Over all, women who worked full-time in wage and salary jobs had median weekly earnings of $657 in 2009. That’s 80 percent of what their male counterparts earned. But as you can see from the chart above, there’s a lot of variation depending on the industry.

Each dot in the chart represents an industry, and the dot size represents how many people that industry employs. If a dot is farther to the right, it means that there is greater pay parity between the sexes. The construction sector, for example, has relatively little difference in the typical pay received by men and women: Women earn 92.2 cents on the dollar of what men earn.

Additionally, a dot that is further up on the graph means that the typical job in that industry pays more money. Mining, quarrying and oil/gas extraction is far up on the chart, for example, indicating that the women who work in this sector are paid relatively well (median weekly earnings of $873).

Remember, though, that these figures are grouped by industry and not by occupation. Some of the gap within any given industry could be explained by the different types of jobs that men and women may go into, either by choice or opportunity (e.g., if they’re secretaries versus managers).

For more on this subject, there is a map of the gender wage gap by state; a look at how wage gap breaks down depending on how many hours an employee works, since part-time female workers actually earn more than their male counterparts; and a chart showing that the gender wage gap is smaller for younger workers.

By CATHERINE RAMPELL
NYTimes Economix Blog