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Gig economy

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A gig worker transporting Deliveroo food.

The gig economy is the economic system by which a workforce of people (known as gig workers) engage in freelance and/or side-employment.[1]

Description

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The gig economy is composed of corporate entities, workers and consumers.[2] The Internal Revenue Service defines the gig economy as "activity where people earn income providing on-demand work, services or goods", noting that the activity is often facilitated through a digital platform such as a mobile app or website and earnings may be in the form of "cash, property, goods, or virtual currency".[3] According to the Fair Work Ombudsman, the digital platforms or marketplaces connect individual service providers directly to customers for a fee.[4] The BBC presented the following definition for the term: "a labour market characterised by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs".[5] The term "gig" comes from the slang term for individual appearances by performing artists like musicians and comedians.[6] Instead of being paid a regular salary, gig workers are paid for individual gigs performed.[5]

The corporate entities employ the services of the workers for short-term commitments for temporary work assignments. They are often disrupting a market place with an alternative form of commercial product. The corporate entities are often able provide a different type of service or product because the gig business model does not burden them with costs such as sick leave and health insurance benefits as well as office space, equipment and training. Sometimes this enables them to hire expertise that they could not otherwise afford.[2] The workers include "freelancers, independent contractors, project-based workers and temporary or part-time hires". They often enjoy greater flexibility in terms of scheduling control and work-life balance.[2] The consumers enjoy the benefit of better choices and convenience.[2]

In the design industry, gig workers are increasingly seeking legal protections around intellectual property (IP) and contract terms. Freelancers often face challenges with clients claiming ownership over creative work without proper compensation or acknowledgment. A 2022 survey conducted by Freelancers Union in partnership with the Authors Guild and other organizations found that 62% of freelancers in New York had experienced wage theft at least once in their careers, with 53% reporting losses of up to $10,000 from nonpayment.[7] Legal developments like California's AB5 law continue to influence the gig economy, aiming to reclassify some design freelancers as employees, ensuring legal protections like minimum wage and benefits.[8]

Among the common types of digital platforms in the gig economy are those to provide ridesharing services, food or package delivery services, crafts and handmade item marketplaces, on-demand labor and repair services, property and space rentals.[3][9] A study completed in 2016 by Lawrence Katz and Alan Krueger showed an increase in gig workers, freelancers, and independent contractors of 50 percent between 2005 and 2015. These jobs accounted for 94 percent of all employment growth in the United States during those ten years.[10] As of 2021, 16% of all adults in the United States had earned income through the gig economy with higher levels of gig economy experience having accrued to younger demographics, according to the Pew Research Center.[11] As of 2017, 55 million Americans contributed services to the gig economy.[12] As of 2018, 150 million people were active in the gig economy in North America and Western Europe, according the Harvard Business Review.[13]

The size of the gig economy depends on how one defines it and whose statistics one uses. The Bureau of Labor Statistics uses the term "electronically mediated work" to represent "short jobs or tasks that workers find through websites or mobile apps that both connect them with customers and arrange payment for the tasks." A work published in September 2018 determined that such work accounted for 1.0 percent of total employment in May 2017.[14] At about the same time the Government Accountability Office stated that the definition and the data source variations support claims from below 5% to over one-third of the labor force engage in non-traditional employment.[15] According to Forbes the gig economy is a $1 trillion sector of the United States economy.[12]

Regardless of the definition used, the gig economy is growing. CNBC reported that during the 2010s, the gig economy grew by 15%.[16] Forbes describes the growth as "slow and steady".[12]

As of November 2022 the 10 largest gig economy companies by market capitalization included Intuit (tax preparation software), PayPal (online payments), Airbnb, (hosting marketplace), Uber (ride-sharing) and Shopify (e-commerce).[17] Other leading companies include Lyft, OnlyFans (content-subscription service),[18] DoorDash, and Instacart.[19]

See also

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Notes

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  1. ^ "What is the gig economy?". McKinsey & Company. August 2, 2023. Archived from the original on November 27, 2023. Retrieved November 30, 2023.
  2. ^ a b c d Lutkevich, Ben and Alexander S. Gillis. "gig economy". TechTarget.com. Archived from the original on November 6, 2023. Retrieved December 2, 2023.
  3. ^ a b "Gig Economy Tax Center". Internal Revenue Service. Archived from the original on November 9, 2023. Retrieved November 29, 2023.
  4. ^ "Gig economy". Fair Work Ombudsman. Archived from the original on November 7, 2023. Retrieved November 29, 2023.
  5. ^ a b Wilson, Bill (February 10, 2017). "What is the 'gig' economy?". BBC. Archived from the original on November 1, 2020. Retrieved December 5, 2023.
  6. ^ Reshwan, Robin (July 23, 2021). "What to Know About the Gig Economy". U.S. News & World Report. Archived from the original on November 29, 2023. Retrieved November 29, 2023.
  7. ^ "New Survey: 60% of NY freelancers not being paid for work performed". Freelancers Union Blog. May 12, 2022. Retrieved October 20, 2024.
  8. ^ "Worker classification and AB 5 FAQ". California Franchise Tax Board. Retrieved October 20, 2024.
  9. ^ Vallas, Steven; Schor, Juliet B. (2020). "What Do Platforms Do? Understanding the Gig Economy". Annual Review of Sociology. 46 (1): 273–294. doi:10.1146/annurev-soc-121919-054857.
  10. ^ Merrick, Amy (April 4, 2018). "Walmart's Future Workforce: Robots and Freelancers". The Atlantic. Archived from the original on January 7, 2024. Retrieved April 5, 2018.
  11. ^ Anderson, Monica; McClain, Colleen; Faverio, Michelle; Gelles-Watnick, Risa (December 8, 2021). "The State of Gig Work in 2021". Pew Research Center. Archived from the original on December 8, 2022. Retrieved November 29, 2023.
  12. ^ a b c Karra, Srikanth (May 13, 2021). "The Gig Or Permanent Worker: Who Will Dominate The Post-Pandemic Workforce?". Forbes. Archived from the original on January 7, 2024. Retrieved November 30, 2023.
  13. ^ Petriglieri, Gianpiero, Susan Ashford, and Amy Wrzesniewski (March–April 2018). "Thriving in the Gig Economy". Harvard Business Review. Archived from the original on September 27, 2023. Retrieved November 30, 2023.{{cite journal}}: CS1 maint: multiple names: authors list (link)
  14. ^ "Electronically mediated work: new questions in the Contingent Worker Supplement". Bureau of Labor Statistics. September 2018. Archived from the original on March 28, 2023. Retrieved November 30, 2023.
  15. ^ Jackson, Emilie, Adam Looney, and Shanthi Ramnath (June 2018). "The Rise of Alternative Work Arrangements: Evidence and Implications for Tax Filing and Benefit Coverage" (PDF). Census.gov. Archived (PDF) from the original on June 29, 2022. Retrieved November 30, 2023.{{cite web}}: CS1 maint: multiple names: authors list (link)
  16. ^ Iacurci, Greg (February 4, 2020). "The gig economy has ballooned by 6 million people since 2010. Financial worries may follow". CNBC. Archived from the original on June 27, 2023. Retrieved November 30, 2023.
  17. ^ Farooq, Umar (November 14, 2022). "5 Biggest Gig Economy Companies In The World". Insidermonkey.com. Archived from the original on December 15, 2023. Retrieved December 15, 2023.
  18. ^ Easterbrook-Smith, Gwyn (2023). "OnlyFans as gig-economy work: a nexus of precarity and stigma". Porn Studies. 10 (3): 252–267. doi:10.1080/23268743.2022.2096682.
  19. ^ Yuen, Meaghan (January 7, 2023). "A list of the top gig economy companies and apps in 2023". Insiderintelligence.com. Archived from the original on December 14, 2023. Retrieved December 15, 2023.

Further reading

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