The Gig Economy and the Future of Employment

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Though most of us think of permanent, full-time employment as the norm for the American workforce, that hasn’t always been the case. In fact, the 40-hour workweek we know today was not the standard in the United States until the passage of the Fair Labor Standards Act. Before then, piece work — a system in which someone was paid a fixed amount for each task or project completed — was particularly common for the average worker.

Now, we seem to have come full circle as more and more workers seek temporary employment similar to piece work in the gig economy. But what, exactly, is the gig economy? How many people actually “gig” as their jobs? And is it truly changing the future of employment in America?

What Is the Gig Economy?

The gig economy is made up of temporary employment opportunities that are completed by independent contractors and freelance workers in lieu of permanent employees. Whether as a side hustle or as their main source of income, a small but fast-growing sector of the workforce is opting to make their livelihood through these short-term jobs instead of full-time employment.

What Is a Gig?

Simply put, a gig is a short-term job. Though it is often used to describe jobs or performances secured by musicians or performers, it can refer to any temporary position, task, or function regardless of industry. Often, freelancers need multiple gigs at a time or in succession to make ends meet. For example, a freelance musician may have to teach several lessons a week, in addition to performing frequently, to earn a living wage.

Gigs are sporadic and short-lived, and contractors may not get work as predictably as they would at a full-time job. Finding consistent gigs that pay enough to live off of can be difficult but the growth of various freelance apps and websites has allowed the gig economy to flourish.

Technology has made it easier for contractors to find jobs that work with their schedules and are suited to their interests and talents. Gig work is available in a seemingly endless number of niches — such as food delivery, rideshares, creative arts, software engineering, and pet care, to name a few — so contractors can determine which jobs they are most excited about doing. Virtually any kind of work or skill can be sold through the gig economy, so long as there is a demand for it.

Gig Workers

There is no strict definition of a gig worker. Essentially, anyone who works in the gig economy is a gig worker. “Temp” may also be used to describe an unskilled worker, while highly skilled professionals are considered “consultants,” but they both do short-term, contractual work, and could arguably be described as gig workers.

While some gig as a way to supplement wages from their full-time job, many others line up enough tasks and gigs for them to serve as their full-time job. Part of the appeal of the gig economy is how flexible it is for workers, regardless of their industry, previous experience, or level of education. Gig workers have the chance to make this economy work for them.

Gig Economy Statistics

According to the Bureau of Labor Statistics, 10.1 percent of workers use alternative work arrangements as their main source of income. Additionally, about one in four people gig in some capacity, including both part- and full-time. A total of roughly 16 million people have alternative or contingent work arrangements. Since the Contingent Worker Supplement (CWS) was last released in 2005, the percentage of these workers has decreased slightly.

In addition, the CSW from the Bureau of Labor Statistics reported on the racial differences of gig work:

  • White: 84.6 percent of contract workers are white. Typically, they work in more flexible and higher paying positions than people of color, such as an independent contractor or consultant.
  • African American: 8.3 percent of gig workers are African American or black. They tend to work as temps, on-call, and contract employees.
  • Asian: 4.3 percent of gig workers are of Asian descent.
  • Hispanic or Latino: People of Hispanic or Latino descent make up 14.8 percent of the gig workforce. They tend to work in lower paying, less flexible positions than white people, similar to African Americans.

A survey from Prudential found that about 24 percent of millennials have worked as a contractor, a higher percentage than Generation Xers (15 percent) or baby boomers (9 percent). While Gen Xers and baby boomers typically start doing gig work because they need money, millennials reported that they wanted better work/life balance and the chance to pursue their passion. Though income level does increase as gig workers age, overall, they still earn only 58 percent as much as a full-time employee.

Conducted by Upwork and the Freelancer’s Union, an annual report titled “Freelancing in America” found that freelance workers are more likely to live in an urban area than traditional workers. Further, freelancers are more likely to live in the Western United States. The 2018 edition of this report also found that the freelance workforce has grown by more than three million people since 2014, indicating positive growth for the entire gig economy.

Because gig work can be hard to define, it’s also difficult to pinpoint the exact number of workers in the U.S. However, it’s indisputably on the rise. It’s clear that the gig economy is changing the nature and future of employment in America.

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