Is the tech boom really remaking job markets?

Technology firms such as Red Ventures in Fort Mill, S.C., have grown rapidly.
Technology firms such as Red Ventures in Fort Mill, S.C., have grown rapidly. CHARLOTTEOBSERVER.COM

The world of work is being transformed by digital technology. Jobs are out. Gigs are in. Everybody knows that. Except for, you know, most of the American labor force.

That’s one conclusion you could draw from the McKinsey Global Institute’s new report on “connecting talent with opportunity in the digital age.” It isn’t the conclusion you’re supposed to take away – the intended big news from the report is the estimate that online talent platforms will create the equivalent of 72 million full-time jobs and boost global gross domestic product by $2.7 trillion a year a decade from now. The projected gains are so big in part because not all that much has happened yet. “We think there’s clear evidence that these platforms are only now hitting critical scale,” said Susan Lund, one of the report’s authors.

“These platforms” range from job-posting sites that have been around since the last millennium, such as, to newer work marketplaces that range from the general – Upwork, TaskRabbit – to the very focused – Uber, UrbanSitter. The idea is that all of these have the effect of making labor markets more fluid and more efficient.

The most important online job player now is LinkedIn. But it has only become ubiquitous in the past couple of years, and the thinking is that its potential is only beginning to be explored. As for workers relying on Upwork, TaskRabbit and their ilk, MGI estimates that they “currently make up less than 1 percent of the U.S. working-age population.”

I’ve been struggling for a few years now to reconcile the rhetoric about the changing job market with the less-than- dramatic evidence in the employment statistics. Part of what’s going on may be that declines in old-line self-employment fields such as farming and retailing are masking increases in white-collar independent work. Part of it may be that our government’s data-collection efforts are moored in an earlier era. Part of it may be that the rhetoric is overblown.

There’s a similar tension between the broader talk of tech-fueled economic change and disruption and the less-than-impressive evidence in economy-wide growth, productivity and business-dynamism data. Disruption is everywhere, it seems, except in the economic statistics.

On-demand service platforms such as TaskRabbit and Uber have been criticized for the quality of the work they offer and because their contingent workers get none of the benefits of employees. But the optimistic MGI take is that over time the online-marketplace model will prove more empowering than exploitative for workers.

That’s already the case for those with highly valued skills. Lund, a McKinsey partner with a Ph.D. in economics, hears about once a week from headhunters who have come across her LinkedIn profile. Not that she’s a job-hopper. Lund has been at McKinsey for 18 years; the report’s other lead author, James Manyika, has been there for 21.

There are attractions to working within an organization for long enough to become familiar with its ways. Still, it’s nice to get those LinkedIn queries every week.

Justin Fox is a Bloomberg View columnist writing about business.