The Gig Economy Defined
May 2, 2018 • by Mariah Ramirez
The Gig Economy – What is it?
The Gig Economy: a trending term meaning a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. Why are more companies switching to hiring a larger percent of their workforce on a contingent basis? How come it seem these are the only job opportunities? Why should you take them? In this 2-part series, we’ll explore answers to these questions and more.
First things first – who makes up this workforce? The millions of citizens who seek employment through freelance, contract, temporary, and on demand work.
As the workers who make up this workforce continue to grow and develop more research comes available. The most recent research from the Freelancers Union and Upwork found those participating in freelance work fell into the following 5 categories regardless of race, age, gender, or other demographic factors.
- Independent Contractors: The most commonly known type of freelance worker. They don’t have employers and instead do freelance, temporary, or supplemental work on a project-to-project basis.
- Diversified Workers: Those whose income is derived equally from traditional employers and freelance work. This individual might work part time as an administrative worker and earn the rest of their income via Uber, Taskrabbit, or Airbnb.
- Moonlighters: Professionals who generate most of their income through a traditional job, but also supplement income by moonlighting in freelance work. For instance, a real estate salesperson that does graphic design projects in the evening.
- Freelance Business Owners: These individuals have one or more employees and consider themselves both a freelancer and a business owner. An example of this would be a graphic design expert that hires a small group to start an agency, but they still identify as a freelancer.
- Temporary Workers: Individuals with one employer, client, job, contract, etc. in which their employment status is temporary. For example, a machine operator employed by a staffing agency who is working on an assignment set to end after a short time period.
In the past, the U.S. Bureau of Labor Statistics has had difficulty measuring exactly how many people make up this workforce. Currently there is no official way of measuring who works only on a “gig” basis and who crosses into the traditional sector. Be that as it may, according to “Freelancing in America: 2017,” 57.3 million (which equates to 36%) of the U.S. workforce participated in Freelance work. Furthermore, by 2027 most of the workforce will participate in freelance work of some kind.
Given these points, with the development of this new workforce, concerns can arise. As an employee navigating in this economy you may ask, “How do I earn benefits? Workers comp protections? Ensure fair compensation?” Furthermore, as an organizational leader you might wonder “How will this impact my organization?” Check the blog next week for tips on navigating the ever-expanding Gig Economy.