SXSW 2016
The week of March 6, 2016

The rise of the creative class is the end of retirement

By Nico Lang

The creative class has killed the American workplace as we know it—and it might be taking retirement along with it.

In his 2002 book, the economist and social scientist Richard Florida predicted the rise of a young, digitally based class of workers that would radically rethink the future of American jobs. The hubs of this new youth economy, dubbed the “creative class,” would be cities like Austin, Texas, Boston, and Madison, Wisconsin. Businesses would adapt to meet the needs of these workers with “everything from relaxed dress codes, flexible schedules, and new work rules in the office to hiring recruiters who throw Frisbees.”

Companies like Google adapted by rebranding their offices as “campuses;” the Mountain View, California-based tech giant’s HQ—littered with sleep pods and worker shuttles—more closely resembles an expensive liberal arts college (think Oberlin) than a workplace. But outside the walls of Google, the rise of the creative class has also led to the steady erosion of workplace benefits, as increasing numbers of workers are hired as “permalancers”—in an workforce increasingly based around flexible part-time work and “gigs.” You’ve often heard it referred to as the “Uber economy,” but 13 years after Florida’s The Rise of the Creative Class debuted, it’s just the economy.

A recent report from NerdWallet warned that these workers (also known as millennials) may have to put off retirement until the age of 75, but that’s highly optimistic. Without 401(k)s or steady retirement plans to help them consistently save for old age, millennials in part-time positions without benefits won’t ever be able to stop working. A “creative” job is no consolation if you’re essentially facing the end of retirement.

You’ve often heard it referred to as the “Uber economy,” but 13 years after Florida’s The Rise of the Creative Class debuted, it’s just the economy.

This isn’t solely a millennial issue. As the Guardian reported earlier this year, “as many as half of American households headed by someone 55 or older … don’t have a dime in retirement savings.” The high costs of living expenses, supporting a family, and pricey expenses like hospital bills leave many Americans without extra income to save; as NerdWallet suggests, that trend is only exacerbated by the high amount of student debt facing the millennial generation, as the average college graduate will have to pay back nearly $29,000 in loans. This burden means that millennials are the only age group spending more than they save.s2

And who can blame them? While the U.S. economy has mostly recovered since the financial crisis, part-time workers and temps are largely fueling this job growth. Since 2009, around 20 percent of new jobs have been going to such employees, and according to the Boston Review’s Steven Hill, this is just the beginning. Projections suggest that “within 10 years nearly a majority of the 145 million employed Americans—65–70 million workers—will be so-called independent workers.”

This model of employee autonomy is touted by companies like TaskRabbit, Lyft, Airbnb, and Postmates as the liberation of the American worker from corporate tyranny. On the website for Uber, the ride-hailing app that’s currently worth a reported $62.5 billion, the company extols the virtues of working as an “independent contractor.” The site preaches to prospective drivers with the rhetoric of a new American dream realized: “Be your own boss and get paid in fares for driving on your own schedule.”

A “creative” job is no consolation if you’re essentially facing the end of retirement.

That ethos is not only used to legally tap-dance around company liability (e.g., following the numerous reported assaults on passengers) but also to hide the fact that these jobs offer few benefits for workers—even in terms of pay. Although the company touts an average salary of $90,000 for its New York drivers, Business Insider reports that many of the company’s contractors struggle to earn minimum wage—pulling in between $5 to $20 an hour, and there have been recent cutbacks as well.  The wages at TaskRabbit, a company that helps people find workers to perform menial labor for them, are reportedly similar.

Many of these part-time workers will spend all of their time working—with 34 percent holding down two to three jobs—with little to show for it in savings. It’s hard to put away money to retire someday when your employers repeatedly insist that you aren’t actually employed by them, and even harder when they claim you’re being paid much more handsomely than you actually are. If Uber and its CEO, Travis Kalanick, believe—against all evidence—that the company is fostering the future of the middle class and giving people the financial means to save on their own, there’s little incentive to offer retirement or any other workplace benefits. After all, Uber isn’t even a workplace.

Creativity is great, but if companies like Uber and TaskRabbit want to radically transform the workforce, they’ll give their workers the opportunity to leave it someday.

Illustration via Bruno Moraes