Last week, Fred Wilson wrote a post on current labor shortages across the country. I completely agree with Fred that we don’t have enough workers today, and it’s a systemic risk to the growth of our economy.
It shouldn’t be political to recognize that one of the unique strengths of the American economy has been our historical openness to immigration. It keeps us young as a country, which is critical to being able to fund a social safety net for older Americas. Expansive legal immigration provides workers to feed economic growth.
And from time to time, it gives us some of the greatest entrepreneurs in the world. See Google, Tesla, Apple and on and on.
But to the extent labor shortages are going to be an ongoing challenge for us to deal with, new startup opportunities will develop to try to fill the void. Certainly automation is a part of this, and where industries can automate and reduce their dependency on people, they will do so.
Last week there was an article in the New York Times about a new gig economy developing for restaurant workers. Line cooks, dishwashers and other related roles. Two new apps, Pared and Instawork, have been launching in cities across the country.
If you’re familiar with the hospitality industry, both from the employer and employee perspective, you can see the value of these kinds of solutions.
Certainly from the employer perspective, being able to tap into the gig economy to find qualified workers for peak busy times is going to be valuable.
From the employee perspective, there are two reasons to be a part of this marketplace. For some, rather than finding full time work, moving through a series of different on-demand jobs throughout the week will be more appealing. It will fit their lifestyle better.
But if you know anyone that works in this industry, you will also recognize that this can be a great way to add extra shifts on top of the normal 30 – 40 hour work week that a full-time employer will provide.
There are two big challenges for employees working in the hospitality or retail industry. Uncertain schedules week to week, and companies that keep full-time employment hovering between 30-40 hours per week in a desperate attempt to avoid paying overtime.
In many ways these are good jobs, with above market hourly wages and health insurance. But the employer doesn’t provide enough hours week to week to provide the kind of wage most people need to support their family. Meanwhile, the unpredictability of the weekly schedule makes it difficult to take on a second part-time job.
The rise of the gig economy in hospitality, and perhaps in retail as well, could help address this problem, and that would be a good thing for employees in these industries.
Which means it should be a good startup opportunity as well. Building a marketplace is challenging, because you need to get to critical mass on both sides of the marketplace for it to work. Successful marketplaces will scale quickly when there is an obvious gap in terms of supply and demand for the services.
It’s difficult to predict how our future immigration policies will develop. I’ve written about the positive impact that universal health care would have on entrepreneurship and members of the gig economy. But even as these debates continue, opportunities to build new companies to fill gaps caused by ongoing changes in our economy will continue to develop. Keep your eyes open, and pay attention to industries around you every day, to spot them.
