The intangible benefits that outweigh employee benefits.
Who makes up the gig economy? Is it just Uber drivers and handymen from Taskrabbit? Ebay sellers and renters on AirBnB? No – in fact gig workers that earn money through the use of an online platform make up just a small minority of all workers within the independent workforce. You may be surprised to learn that the vast majority of gig workers are in traditional industries like construction, agriculture, and mining, and even more surprised that the sectors experiencing the greatest growth within the gig economy are those that have been around seemingly forever – maids/housekeepers, construction workers, landscapers, and hairdressers/cosmetologists. In fact, while some estimates of the size of the gig labor force project it to be as large as 68 million workers, Emergent Research reports that only ~3.7 million gig workers use online platforms to generate income.
Workers participating in the gig economy overwhelmingly report high satisfaction with their employment situation. MBO Partners, an organization that serves the independent workforce, found that in 2017, 74% of those working in the independent workforce full time reported that they were “very satisfied,” with their work status. The report also found that 77% say they are happier working on their own than in a traditional job. The Bureau of Labor Statistics reports that the vast majority of independent contractors prefer their working arrangement even when factoring in lower levels of access to health insurance and retirement savings that are more frequently offered in a traditional work arrangement.
Why are gig workers so happy? In large part, workers in the independent workforce love the flexibility, autonomy, and control that comes with being their own boss. They can work as much or as little as they want in many cases, can set their own hours (which is especially attractive for individuals with dependent family or other work or school obligations), and they’re freed from the shackles of a normal 9-5 schedule. Gig workers also report that they’ve taken on these kinds of jobs in addition to full time work to both supplement existing income, and increasingly, to gain new skills. Many employees want to advance within companies and fields in which they already work, but find training opportunities, and an associated path upward hard to find. In today’s economy, workers take career advancement into their own hands and freelance to expand their skill sets.
You might ask yourself, “So what? Why does any of this matter?” It matters for several reasons. The first is that the workforce is changing in profound ways, but the laws and policies governing workers and their protections haven’t changed at all. We need to understand the reality of where we are and why we are in able to create policies that make sense for today’s economy. What’s more, the money earned by gig workers is serving as a vital financial lifeline for a large number of Americans. Many are choosing to supplement their income with flexible gig work as the only way to keep their heads above water financially, so while it’s fair for policymakers to question whether businesses are operating within existing labor laws, they also have to be careful not to take steps that would debilitate companies or otherwise stand in the way of allowing individuals to continue earning necessary income. Finally, the composition of the gig labor force matters because it’s growing and impacts many sectors of the economy including the healthcare, social security, and tax systems. If we are to understand the broader economic picture, it’s important to have a grasp on the size and scope of what we’re discussing.
The gig economy is growing and will continue expanding, with an estimated 50% or more of American workers expected to be participating in the gig economy within the next decade. While this growing sector of the American economy plays a vital role in providing income to millions of Americans, it has largely remained unexamined by lawmakers. Current policy related to labor, taxation, and benefits need to be considered and reviewed to ensure laws are relevant and applicable to the evolving economy.