1/30/22, 6:09 PM The Hustle Economy - Dissent Magazine
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The Hustle Economy
The Hustle Economy
Today, inequality—especially racial inequality—is not only produced
through the job market but through people’s ability to hustle.
Tressie McMillan Cottom Fall 2020
Is an Uber driver an entrepreneur, a worker, or a vendor? The answer appears to be whatever Uber
needs her to be. (John Michael Snowden)
The futurism of technology discourse is ahistorical and ideological. Tech utopianism
disembeds the future from the political economies that produce its social relations,
and it obscures the machinations of racial capitalism. When I was recently asked to
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consider how digital technologies shape “economic opportunity” and the “future of
work,” I started by examining what we mean by economic opportunity, and what
counts as work.
In lay terms, economic opportunity in the future of work looks like hustling. Hustling
traditionally refers to income-generating activities that occur in the informal
economy. It has also become synonymous with a type of job-adjacent work that
looks like it is embedded in the formal economy but is governed by different state
protections, which makes the work risky and those doing it vulnerable.
“Platform entrepreneurs” who trade their labor using a digital platform (like
TaskRabbit or Takl) that extracts a portion of that labor in exchange for facilitating
payments and promotion between provider and customer are hustling. So are
independent contractors who enter arrangements with companies (like Uber, Lyft, or
Amazon with its delivery drivers) that provide access to proprietary scheduling-
based work in exchange for workers who will accept the risk of not being an
employee. Hustling also refers to influencers, who develop personal brands on social
media platforms and exchange their share of market capture in the attention
economy for discounted products, free goods, and direct-to-consumer sales. While
all of these types of hustling can happen in conjunction with waged employment
and other forms of entrepreneurship, they all show how the assumption of risk has
shifted from states and employers to workers. Today, inequality—especially racial
inequality—is not only produced through the job market but through people’s ability
to hustle.
The Economic Opportunity Act of 1964, which introduced the term into public
provisioning, was part of the massive investment in social welfare that happened in
the middle of the twentieth century. The legislation, which included funding for a
jobs program, adult education, and small business loans, was eventually replaced by
the Community Services Block Grant in 1981. The trajectory from economic
opportunity to block grants is an allegory for how the dominant economic logic in
the United States shifted from an emphasis on civil rights to “investment.” By the
1980s, “economic opportunity” meant promoting entrepreneurship and securing
formal credentials among poor people and minorities. By the 2000s, this approach
was taken for granted.
Since March, tens of millions of people have filed for unemployment. Meanwhile
many participants in the hustle economy have had to adapt quickly to the new
context created by the coronavirus. The future is predicted to be less job-centric. It
is predicted to be more competitive. It is predicted to shift more risk onto individuals
and communities. Digital technologies—combined with the effects of the COVID-19
pandemic—are speeding these processes up and making them more efficient. To
understand these changes, we need to look to the borders between the formal and
informal economy where entrepreneurship sits.
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Racial Capitalism and the Future of Work
The concept of racial capitalism posits that racialization is a primary project for all
capitalist activities, from accumulation to extraction. This holds for the future of
work as much as the past. Racial capitalism identifies the hustle not just as a
response to inequalities in the formal economy but as a kind of racial theater. Black
people—and Black women especially—are shut out of traditional employment, but
our culture applauds the hustler who responds to exclusion by striking out on her
own. As brands and digital platforms celebrate grit and urge us to “respect the
hustle,” the realities of who succeeds and who stays struggling are lost.
Some argue that in contrast to the formal economy’s rush for accumulation, the
informal economy is driven by the unmet needs of the exploited classes. Still, the
informal economy, which serves as a pressure valve for the formal economy, has its
own set of underlying social relations. The theater of the hustle obscures some of
these relations and emphasizes others. Mostly, it distracts us from the diffuse nature
of extraction today. Hustling encompasses legal, semi-legal, illegal, and small-scale
enterprises, but it also includes precarious workers in professions that have shifted
to the hustle economy even when their titles do not reflect it. This is a global and
varied phenomenon. But the larger story is about the expansion of the informal
economy by shifting the relations of production that underpin the formal economy.
Entrepreneurship is not often theorized as work. Even when a worker provides a
service, the absence of a firm renders entrepreneurial activity as something other
than a “job.” But, as Zulema Valdez points out in her study of Latinx entrepreneurs,
ethnic and Black entrepreneurs in particular use ventures to augment bad jobs,
substitute for job losses, or to otherwise mitigate exclusion from occupational
pathways. Some of these entrepreneurs may work for themselves, but many are
adding entrepreneurship as a type of second or third shift on top of a formal job
arrangement. The administrative state does little to track or identify this sort of
activity, in stark contrast to the vast apparatus that oversees public and private job
sectors. Entrepreneurial firms that employ fewer than fifteen employees, for
example, are exempt from reporting data to the Equal Employment Opportunity
Commission.
Take the case of a job task platform like TaskRabbit. It promotes itself as a way for
underemployed women to make extra income in their spare time. But women are
less likely to have unallocated time than are men. They are also less likely to be
compensated for work they provide in almost any economic arrangement, and when
they are compensated, it is at rates lower than those for men. And a nonwhite,
immigrant, working-class woman is more vulnerable to the message of economic
inclusion than a white, upper-middle-class woman. Other platforms try to blur the
distinction between workers and owners. What, for example, is an Uber driver? Is
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she an entrepreneur, a vendor, or an employee? The answer appears to be she is
whatever the platform requires her to be to maximize profit at any given point in an
exchange.
The word “entrepreneurial” has served as a shield against inquiry into the work
arrangements that are organized beneath that banner, especially when aided and
abetted by platforms and data black boxes. But the tools that leverage the idea of
inclusion work differently for different people, limiting what opportunities are
available and channeling people into specific forms of entrepreneurship. The future
of work will make many more U.S. workers into entrepreneurs. But what type of
entrepreneurs will they be? And what digital technologies will they use?
Hustling in the Shadows of Economic Opportunity
While the “digital economy” is often pictured as start-ups in the Silicon Valley tech
industry, today all entrepreneurship is digital. From hair salons to small farms, resale
clothing shops to house cleaners, the use of social media platforms is increasingly
central to entrepreneurs’ livelihoods. Social media is not only a source of information
and peer support, but also a place where business itself is conducted. It is
important, therefore, to understand the role digital technologies play in perpetuating
and upending inequalities in entrepreneurial access and success.
Entrepreneurs reach customers through social media platforms like Instagram and
Facebook as well as business-specific platforms like Yelp and Thumbtack. They
collect payments, manage financials, and even receive loans through fintech
platforms like Square and Kabbage. And entrepreneurs in the digital economy often
work out of physical spaces that operate like platforms, such as WeWork and Phenix
Salon Suites. These platforms are designed to serve an economy where livelihoods
are increasingly defined by a patchwork of entrepreneurial activities. Those whose
professional life sits at the nexus of these digital tools are “platform entrepreneurs.”
The access these platforms provide is a kind of “predatory inclusion.” Personal
finance is a good analog. When traditional banking services excluded large swaths
of consumers, payday loans and prepaid cards emerged to fill the gap left behind. In
the world of business-to-business products, a range of alternative business services
serve the same function: lending packages, fintech products, business software,
business credit schemes, and merchant services accounts. There is a whole array of
“subprime” business services, which justify high relative costs by offering
themselves to entrepreneurs shut out of traditional services. The platform economy
is a stopgap to overcome exclusion, and a tool used to target people for predatory
inclusion. Subprime entrepreneurs gain access to the platform economy and the
social, political, and economic capital they need on uneven and often exploitative
terms.
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As educational institutions and policy makers continue to encourage
entrepreneurship as a viable path to economic security for more workers left behind
in the job-based economy, it is critical that we understand how different kinds of
entrepreneurs experience that pathway. With that in mind, I am engaged in an
ongoing research project, which aims to map the ecosystem of entrepreneurial
activity and technologies used by platform entrepreneurs in gendered professional
services. With my colleague Lana Swartz at the University of Virginia, I am looking at
how platform entrepreneurship is shaped differently by race, class, and gender in
mid-sized cities with negligible high-status technology industries. We shift the lens
of studies of entrepreneurship in the United States from Silicon Valley and Wall
Street to the shadows of economic opportunity structures: the chain mall beauty
salon sub-rental, the Instagram direct messages of beauty industry micro-
celebrities, and the network of capital that targets entrepreneurs with severely
constrained choices.
This research complements my “Hustle Better” project on how Black women
entrepreneurs access micro-capital through fintech platforms that target subprime
entrepreneurs. In collaboration with the Filene Research Institute, I am interviewing
women who hustle in areas with rich histories of Black entrepreneurship and a
sizable Black consumer class. Given conditions that would be considered favorable
for ethnic entrepreneurship, this research explores how Black women make sense of
the fintech platforms where they conduct some or all of their business activity. A
host of feminist scholarship has demonstrated that economic relations are also
emotional, affective experiences. Racial capitalism must feel good at least part of
the time or it would be unsustainable, and predatory fintech platforms inculcate
feelings of belonging, success, and mobility despite the material reality of their
exploitative terms. More importantly, I am exploring the potential of cooperative and
not-for-profit fintech to create non-predatory platforms for vulnerable
entrepreneurs.
Around International Women’s Day, commemorated just one week after the close of
Black History Month, I was inundated with memes congratulating me for being a
woman. Brands and media issued lists and essays and social marketing to celebrate
Black women. A story about Black women entrepreneurs got a lot of traction. It was
pithy and had the scientific patina of a numerical data point. The story celebrated
that “Black women are starting businesses at the fastest clip of any racial group.”
The claim does not make much sense, since Black women aren’t a racial group but
are a subset of a racial group. The report, produced by American Express, says that
“The number of firms owned by African-American women has grown by 164% since
2007.” The story is popular because it celebrates Black uplift through economic
opportunity. The reality is less rosy.
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Black women platform entrepreneurs have more education than their white male
and female counterparts. Despite having more formal education, they face more job
insecurity than similarly educated peers. This insecurity is compounded if those
Black women are also sexual minorities. These intersecting inequalities shape Black
women’s exposure to entrepreneurship schemes that are marketed as low risk. For
example, platforms like PayPal, Kabbage, and Square all offer business loans
targeted at micro-businesses and platform entrepreneurs. Advertised as micro lines
of credit for entrepreneurs with little collateral or business credit, it is easy to see the
coercive appeal of these products for Black women who face systemic
discrimination in credit markets. This can look like a form of economic inclusion. But
on closer examination, these products are less like business loans and more like
short-term cash advances, which are common in economically marginalized
communities. They promise various efficiencies made possible by digital
technologies. PayPal can garnish an entrepreneur’s income to repay the loan “simple
and easy.” Kabbage uses an algorithm that makes it possible to “apply in minutes
and qualify in no time.” The platforms accomplish this by exploiting the vast
amounts of historical data available on potential borrowers.
The efficiencies of frictionless repayment and low opportunity costs to apply have
very different value depending on the social location of the consumer. They also
mask the predatory terms of inclusion. Interest rates from Kabbage can exceed 50
percent when the short term of repayment schedule is considered. Moreover,
because these products are not typical loans, they do not report to credit bureaus or
build business credit. PayPal, Kabbage, and Square differ from other kinds of
business loans offered in this space, such as LendingClub and Amazon Lending, that
have more favorable terms but are targeted to higher status, whiter, and wealthier
entrepreneurs. The high price of inclusion in capital accumulation schemes like self-
employment and entrepreneurship for Black women recommends racial capitalism
as a robust analytical framework.
As the economy shifts to more and more non-job labor, digital technologies will
continue to reshape work by finding new ways to facilitate efficient, racialized
extraction. We will see more platforms that produce new types of occupational
closure through the creation of micro-degrees and certificates, and more
companies that rebrand economic insecurity as economic opportunity. The
processes may look inclusive, but the terms will be predatory.
Tressie McMillan Cottom, an associate professor and senior research faculty at the
Center for Information, Technology and Public Life at UNC-Chapel Hill, is the author
of Thick: And Other Essays, a finalist for the National Book Award. She is a member
of Dissent’s editorial board.
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