As of August, over 57.3 million Americans are working in the gig economy. By 2023, it is projected that 52% of the US workforce will have worked as independent contractors or gig economy workers. The gig economy offers flexible, temporary, or short-term jobs where individuals or companies hire giggers, freelancers, and independent contractors to complete jobs for an agreed-upon sum of money, as opposed to a traditional 9-5 job or shift work.
When referring to the gig economy, we are talking about many people doing temporary, part-time jobs or independent contracting. Many of these jobs rely on an internet connection, such as Uber, Doordash, and freelance writing. The better the internet connection and the larger the city, the larger the gig community.
The gig economy is popular among businesses and colleges as it is less expensive and eases staffing burdens. Most gig workers work part-time, with many working from home. Currently, two-thirds of the US workforce is gigging.
A Brief History of Gigs
Although modern gigging started in 2009, jazz musicians used the word gig in 1915 to describe their one-night jobs in clubs. By 1995, 10% of Americans worked “alternative” jobs such as independent contracting, temp work, and on-call.
In 2005, Amazon jumped on the gig wagon when they created AMK, Amazon Mechanical Turk. AMK offered jobs that artificial intelligence could not do. This continues at Amazon, but some jobs pay as little as $0.80/hr and are mainly done by workers in foreign countries who are grateful for the opportunity.
Airbnb was conceived by two roommates from this economy in 2005, trying to make rents cheap. By 2010, Airbnb was worth $38 billion. Uber appeared five years later and has given over one billion rides. While not all gigs turn into multi-billion dollar ventures, kudos to those who do!
Earlier this year, as things started to get back to normal and people could go back to work, many people began leaving their jobs. Hence the name, “The Big Resignation.”
Gigs are becoming a source of flexibility and independence, providing a satisfying work-life balance and the bonus of increasing income.
Who Is Using Gigs and Why
Gig workers are an excellent resource for businesses of all sizes, providing a larger pool of employees without the limitations of geographic location or commute time. Additionally, advances in computer technology have created opportunities for office work to be done from home, allowing for greater flexibility and work-life balance.
By tapping into a wider pool of talent, companies can take advantage of better educated and more skilled workers, regardless of where they are located. Smaller businesses can also benefit from outsourcing jobs that aren’t done on-site, saving both time and money while still getting the job done.
The pandemic has greatly increased the demand for gig work, with many people working from home and relying on home-based delivery services for everything from food to household essentials.
It’s important to note that many gig workers are entrepreneurs who don’t follow a typical daily schedule. While they enjoy the flexibility of choosing their own hours, they often lack benefits such as pensions, paid time off, and health or dental insurance. Without work, it can be challenging to pay the bills.
In today’s economy, many people are turning to gig work as a second job. The more skills a person has, the more opportunities they have to earn a living through gigs. For parents, gig work can be a great option for scheduling around school activities and sports, allowing for more time with family while still earning an income.
The Pros and Cons of a Gig Economy
Pros
One of the biggest benefits is the ability to increase your income with flexibility. You have the freedom to choose what you want to do, when and how you want to do it. Most jobs can be completed remotely, usually on a smartphone or computer.
You don’t have to relocate, so you can live anywhere in the world and still have an income. Most computer service-related gigs offer courses, YouTube how-tos, and blogs on how to improve your skills. This means that everyone has access to the education needed to do a gig.
Gig work creates inclusivity, enabling disabled and workers on the spectrum who don’t have access to transportation or have social issues to make a living and be independent. It allows you to create a work-life balance that fits around your life.
Cons
As with any decision, there are also drawbacks to the gig economy. First, there are no traditional benefits such as medical, dental, vision, or pension options. Some US senators are trying to pass the Pension Portability Act to fix the pension options issue.
Gig work lacks a social aspect. There are no water cooler chats, no one to have lunch or take a break with, and no co-workers.
If you lack motivation or discipline, then gig work is not for you (pun intended). You have to be self-motivated and disciplined to get the job done. There is no boss to push you, and no co-workers to show you what needs to be done; it’s all up to you!
You are essentially running a mini-business, where you are the marketer, employee, and secretary. You wear all the hats every day, and when you don’t get gigs and bring in income, you might struggle to pay rent or put food on the table.
How to Find Gig Work
If you’re looking for gig work, writing is a popular option and a great place to start. On a freelance platform, you’ll create a profile and bid on jobs that match your experience and skill set. Once you submit your bid, the employer will review it and offer you a project if they’re interested. Once you agree on the terms and payment, you can begin working on the project.
However, keep in mind that there are platform fees that will be deducted from your earnings. For example, if you take on a $50 project, you may have to pay a fee of 8-10% of the project cost. After taxes, you may only earn $28 for the $50 project.
It’s important to remember that everyone has to decide what works best for them. Long-term giggers often work to establish solid client relationships to create financial stability. Starting a successful gig career takes time and effort, and it’s not uncommon to experience some setbacks along the way. However, the satisfaction of a successful gig career is worth the effort and hard work.
Gig Platforms
Most gig workers use a platform or digital job board to find work. These platforms charge a fee to employers who want to hire freelancers. Repeat employers may opt for a subscription service that provides money-saving perks. The platform fee is typically between 2.5% and 4% of the project fee, with fees being higher for companies outside the US. In some cases, employers and freelancers may choose to build a relationship and leave the platform, which can provide financial benefits for both parties.
It’s important to note that gig work is not currently regulated, and there is no government agency monitoring platforms or the rights of gig workers. However, some cities such as New York City have taken steps to protect gig workers. The NYC Transport and Limousine Commission recently set a minimum wage for contract workers after analyzing data from transportation platforms such as Uber and Lyft. This is a positive step towards ensuring better working conditions and pay for gig workers.
The Global Gig Economy
The United States and United Kingdom rank as the top two nations among the top ten countries with the most gig workers. Brazil, Pakistan, and Ukraine follow as third, fourth, and fifth, while the Philippines, India, and Bangladesh come in as sixth, seventh, and eighth, respectively.
Unfortunately, some gig workers in foreign countries perform the same work as gig workers in the United States and United Kingdom, but for less pay and often in more hazardous conditions. For example, food delivery gig workers in Asian countries ride bicycles or scooters on busy streets to deliver hot food to businesses. Unfortunately, these workers lack regulation in their countries at this time.
Workers in India and Bangladesh typically earn the lowest wages and often seek gigs in the United States and United Kingdom markets to make a living. This led Spain and the Netherlands to create “budgets,” an agreement with trade unions, and representation for gig workers to ensure they receive fair salaries in their respective fields. Consequently, they have developed a gig economy that supports their workers’ livelihoods.
Spain currently offers the best self-employment protection by establishing a fixed monthly minimum contribution to their social security. Despite this, countries are only beginning to focus on workers and their wages and the lack of benefits. It will be interesting to see the solutions and who will benefit the most from them.
China has one of the largest gig economies, where one-quarter of the workforce is gig-based. However, they have gone beyond and created a few unique gigs that you won’t find anywhere else, such as designated drivers responding to years of alcohol-related issues involving Chinese businessmen. Since its inception, this service has reduced DUIs in China by 11%.
They also have a Boyfriend rental gig, which addresses the stress created by the pressure for Chinese women to marry by the age of thirty. The Personal line-stander gig is also noteworthy as people in China prefer not to stand in line, so gig workers do it for them.
It’s impressive to see the entrepreneurial spirit at a new level, finding a need and filling it. It’s heartening that someone finally listened to the market!
After significant protests and pressure from unions and labor movements, China recently amended its trade-union laws to expand the inclusion of specific gigs. While these laws do not cover all gig workers, it is a significant step in the right direction for low-paying gigs in China. As the gig economy advances, regulations and possible unionization will become necessary globally for gig workers.
The Generations of Gig Workers
As of September, people ages 25 – 40 (millennials) make up 53% of all gig workers. Not surprisingly, many of them had difficulty finding work after college. They are the largest group surveyed who are unhappy in their current jobs.
The Gen Z’s, ages 20 – 24, show the most significant increase in the last two years of new gig workers. It is up from 14% – 22%. They have the skills and tech know-how to do gigs well enough to make a future in them; they are the hungriest for new opportunities.
When you look at who makes the most monthly income on gig platforms, the workers are older. Gen Xers (41 – 56 years old) brings home an average of $352 a month, followed closely by the Baby Boomers (57 – 75 years old), earning $331 monthly. That is a lot of people forty-one and older who are re-evaluating what they want from their current job.
The Future of the Gig Economy
The question remains: what will the future of the gig economy look like?
While traditional employment will always exist, the appeal of steady and predictable income is too great for many employees, especially those who have spent their entire careers working in this way.
It’s no secret that companies love the financial benefits of hiring gig workers for specific projects. If you only need an employee to check emails for a couple of hours each day, it makes sense to outsource this task to a gig worker rather than hiring a full-time employee with benefits to do the same job. It’s clear that the future of gig work is headed in this direction.
The best solution for companies is to use both full-time employees and gig workers to create a blended workforce that maximizes efficiency. Full-time employees can collaborate with gig workers to take on projects that they don’t have the time or resources to complete.
By creating a culture of accountability, it’s possible to delegate tasks to gig workers and ensure that they are completed on time. This can help to establish long-standing relationships between gig workers, businesses, and full-time employees. Gig workers benefit from steady work, companies get the job done, and full-time employees have the added flexibility of being able to take time off for personal reasons without worrying that their work will suffer.
As gig work becomes more prevalent, there will be a growing need to develop benefits packages for gig workers, either through corporations or on a federal level. With 57% of the workforce working without benefits, it’s clear that there’s a pressing need to address this issue. Without access to medical and dental benefits, gig workers and their families are left vulnerable.
The gig economy is not replacing traditional jobs, but it’s clear that digital technology and the internet have paved the way for this new type of work. It’s a natural progression, much like the rise of smartphones and apps.
The shift toward gig work began in the 70s and 80s when management began to see employees as a cost rather than a source of profit. This led to the rise of temp agencies and other sources of employment, which laid the foundation for the gig economy as we know it today.
If you’re interested in the gig economy or are already a gig worker looking for resources, there are several options available. Gigs Done Right is an excellent one-stop resource that provides a wealth of information on freelancing, gig-based work, blogs on the gig economy, and resources for finding money-making gigs and side hustles. The US Government IRS also offers a dedicated website for gig workers that includes information on tax management, forms, how to pay estimated taxes, and how to track expenses. If you’re going to be a gig worker, this site is a goldmine of valuable information.
