If you've read a newspaper lately then you've probably seen at least one story that would lead you to believe that US labor markets have changed forever.

taxi_uber

It's a familiar story about how the "sharing economy" is creating a tidal wave of freelance workers which is leading to a rapid reduction in curated skills and full time employment.

It's a story that features innovative companies like Uber, AirBnB, TaskRabbit, UpWork and many others who are successfully connecting labor-supply with labor-demand by using technology to tap into rapidly growing crowds of variable labor.

And, it's a story that incorporates politics and explains how cost-conscious employers would rather source part-time labor from the crowd than hire full-time labor in order to avoid benefits expense.

But, no matter how many times you read it -- it's a story that's over-hyped.

Here's why:

1. Numbers don't lie.  Although Uber and a few others offer shining examples of big time disruption, the broader labor numbers tell a different story.  According to Adam Ozimek at Moody's Research, "everyone is talking about a transformation of the labor force and how the nature of work has changed, but the idea that a massive transformation is underway has been oversold."

2.  Just because you have a hammer, not all jobs are nails.  Clearly, Uber has attracted a large pool of variable workers and has proven that crowd-labor can disrupt certain markets (for-hire transportation) and existing middle men (cab companies).  However, not all industries are defined by work flows that are homogenous and repetitive (find fare, pick up passenger, drive passenger, drop off passenger, repeat). Indeed, many industries (including retail merchandising and event marketing) are defined by work flows that are heterogenous and dynamic in nature.  So, if we assume that crowd-based labor is a "hammer", then there are many industries defined by work flows that are anything but "nails".  Thus, the same type of disruption that is occurring in some industries will not occur in all industries.

3.  Double edged swords cut deep.  While crowd-based labor offers the potential for incredible scalability and flexibility -- it also inherently lacks discipline, structure, attention to detail, and motivation for many forms of work that require physical presence and specific skills.  A good example of this comes from my own personal experiences as a member of the crowd while shopping in retail.  If a brand needs an extra set of eyeballs to conduct an audit, and they're willing to pay me a few bucks to snap a photograph of a display in a store -- then i might be inclined to engage and perform the task.  However, the moment i am required to actually touch products on a shelf, or turn a screw driver, or sample a product that I know nothing about -- then that's more than I bargained for.  As a crowd participant, that's when I opt out.

In summary, depending on the type of labor you need and the type of work that needs to be performed, the crowd can be a great thing.  But, let's face it, the crowd doesn't work for everything, and that's why it's overhyped.

Topics: Retail Labor
Matt Howard photo
Husband and father. Software innovator, entrepreneur and marketer. My wife is my soul mate. My 3 kids are my greatest accomplishment. I love innovation and marketing. Also running, yoga, wine, Baltimore Ravens and Avalon, NJ. Sales and Marketing VP at Natural Insight. Founder & CEO of ZoomSafer. Co-founder of SMBLive. Marketing VP at Groove Networks and USinternetworking.