The modern economy is struggling to figure out how to quantify and include “gig” work into job counts, economic growth, employment status, and more. Some economists and analysts are calling the parallel world of temporary or project specific work the gig economy. This refers to the ever spreading and changing work available to people with specific skills who work for individuals or corporations on a contract basis but who are not considered full time or even part time employees.
Think about Uber and Lyft, for example, and the emergence of that entire industry and technology. Ten years ago, these companies didn’t exist and now it has created jobs for workers to earn extra money outside their regular jobs or has become the sole source of income for many individuals around the world. It’s just one example of the changing landscape of work types for people seeking immediate income.
Adobe conducted a poll showing that about one third of workers in the United States have a second job right now. Over half of people polled predict that they would have more than one job in the future. This is both because people are not receiving enough for a living wage where they work, or they see extra earning potential outside of what they already have and want to embrace the opportunity.
More people are earning wages doing freelance work than ever before, much of which is facilitated by sites like Upwork. Upto one third of the American workforce (55 million people) gets their income by working as freelancers. These days, however, it is not just writers and graphic designers who are freelancing. IT jobs, accounting positions, and even senior managers are quickly becoming part of the gig economy.
The changing face of virtual reality is rapidly bolstering firms’ ability to have remote workers engage in face-to-face, or screen-to-screen, meetings. Companies are being pressured because of cost saving opportunities to hire out skill specific work to contractors, a process which has become much less formal and highly competitive.
If a company or an individual needs a job done, it is as easy as posting the job on a forum like Upwork or Freelance.com and watching the bids come in. Some will do it for free to gain a new client. This drives down the price companies have to pay for work because the bids get pretty competitive.
What does it mean for our generation?
We inherited a poor economy with little job security and large student loans. Having only one career seems unobtainable, especially as older generations are staying in their positions to older ages. It also feels less desirable, as it provides little flexibility and feels old fashioned.
The gig economy has many pros and cons, though. And, it’s important to know about both sides of this new reality.
The pros are kind of obvious: gigs on the side means supplemental income to help pay off debts, like student loans. They also allow us to work on different schedules and from anywhere in the world. When you’re working on projects, most of the time, all you need is your computer and an internet connection and you’re ready to get to work. This also means that, no matter where you live, you’re not bound the geographic location for job opportunities. The world wide web has opened up a whole new field of gigs for employees around the world.
The cons are pretty serious, though.
There is very little, if any, workplace protection for gig economy workers. It is easy for those of us participating in short term, skill specific work to be taken advantage of. The Freelance Union conducted a study that showed the average gig worker loses out on about $6,000 per year because they get stiffed in one way or another by the person hiring them.
Most freelancers are also uninsured. And, if you have insurance, it’s likely to be very expensive because it’s not provided to you as a part of a benefits package from an employer.
Benefits like sick days or vacation are also non-options for those in the gig economy. This can lead to burnout and overwork. It is easy to just move project to project without taking time off on the weekends if you need to make money. Especially when you’re competing with so many others in the gig economy for a specific job and you’ve had to charge less for your work.
Companies can onboard and off-board people without the hassle of paperwork and employment taxes. They also don’t need to worry about paying for you when your particular skill isn’t in demand at a particular moment.
The law hasn’t caught up with the ever-changing economy and many workers are being taken advantage of or overlooking their own needs in favor of small incremental pay checks.