Growth of the Gig Economy
Employment in the gig economy is growing far faster than traditional payroll employment, by using a little known statistic, the researchers found evidence of a significant change in the numbers and the potential for a huge realignment in the very nature of employment.
Hop into an Uber in San Francisco, and you are likely to find that your driver is an out-of-work artist, bemoaning the difficulty of chasing the surge. The gig economy in the US is fraught and controversial: for every article lauding it, another piece complains; for every artist making a buck driving Uber, someone else is using Uber to transport cocaine.
But as the Uberization of all things spreads across the globe, what does this look like in developing countries? It turns out that in developing nations, platforms where freelancers can make money, the Ubers, Craigslist, and Postmates of overseas-may just be the next big driver of economic development.
Over the past 20 years, the number of gig economy workers- those who operate as independent contractors, often through apps- has increased by 27 percent more than payroll employees, according to CNBC calculations using data from the report. The change is even more severe in specific industries, like ground transportation, where the number of gig economy workers increased 44% more than payroll employees.
In short, misconceptions about the growth of the gig economy. While there is no doubt that alternative work arrangements have increased substantially over the past decade, the type of mechanisms that have improved are not the ones most commonly discussed by observers. More importantly, the reasons why these new forms of work have become more common appear to be different from what many pundits have argued. Data collected and carefully analyzed by academic researchers reveal that most of this growth comes from the more signifivant offline use of contract employees to find work for upper income, older members of the labor force.
Until the government designs more specific measures to track the growth of the gig economy, the Census' non-employer firms may be the best measure we have. But it has implications beyond measurements of employment. If the Bureau of LAbor Statistics included gig economy employment in its monthly jobs report, for example, it is possible the country's unemployment could appear lower, which could convince the Federal Reserve that the economy is stable enough for an interest rate hike.
It also changes an individual's relationship with employement. Health insurance, for example, has long been tied to employment status. Without an employer, more workers are dependent on health exchanges that were setup under the Affordable Care Act and could be jeopardized if that disappeared.
As technology advances, we are seeing more and more Uberization of workforce. With the pros of flexibility comes the cons of having less benefits, our society could see more effects of this in the upcoming decade.
Related: Gig Economy Trends
Leave a Reply.