But what exactly is the gig economy? And how is it affecting businesses and employees?
What Is the Gig Economy?
The gig economy is a labor market in which short-term contracts or freelance work are favored over permanent jobs. In 2015, economists Lawrence Katz and Alan Krueger estimated the size of the gig economy to be less than half of one percent of total U.S. employment. Today, it represents approximately 10.7 percent.
So, why the sudden surge? One reason is that for some companies, the gig economy is a win-win. It means that they have a responsive workforce that they can scale up or down depending on demand. They can fill skills gaps quickly and cut down on overheads related to labor costs.
For workers, it means that they can choose a pattern of work that suits their lifestyles. This can be hugely appealing to working parents, students and retirees, as well as people who want to achieve a better work-life balance. It also allows people to pick projects or select companies that appeal to them.
Facilitating all of this has been the growth in cloud computing and the expansion of telecommunications networks. Both have enabled more and more people to work remotely. The rise of online platforms, such as Airbnb, Uber and Deliveroo, has also led to increased demand for gig workers.
The Pros and Cons
But, not everyone is happy about the gig economy.
Some labor rights groups have voiced concerns about employers taking unfair advantage of gig workers. They accuse firms of exploiting flexible working arrangements to avoid paying people a fair wage, as well as other benefits such as sick pay, holiday pay, and health insurance.
The ugly truth is that many gig workers are being paid below the statutory minimum wage, while some of the companies responsible seek to minimize the amount of tax that they pay. In the U.K. this has led the Archbishop of Canterbury, Justin Welby, to describe the gig economy as “evil.” Other critics have suggested that the growth of gig contracts has led to an ever-widening gap between rich and poor, as well as a rise in poverty and homelessness.
And yet, the number of gig workers continues to grow.
That’s because, for many workers, gig working does have a positive effect. It enables people who can’t find full-time work the opportunity to earn money. For others, it allows them to supplement their other income, or their pensions.
Millennials in the Gig Economy
The gig economy has proved particularly appealing to Millennials, many of whom have begun to ditch traditional working patterns in favor of more flexible arrangements.
A 2018 study suggested that self-employment is expected to triple to over 42 million by 2020. Millennials are forecast to account for 40 percent of this figure.
Gig work allows people in this age group to have much greater control over their work life. It opens up a diverse range of opportunities. And it means that they can pick and choose contracts or companies that align with their own values – something that “strikes a chord” with Millennials.
That’s not to say that all Millennials are happy about the gig economy. No doubt many, faced with a lack of full-time employment opportunities and enormous student debt, have had no choice but to become a gig worker in order to earn a living.
And, according to a 2018 report by Prudential, 49 percent of Millennial gig workers in the U.S. are struggling financially. For Generation X-ers who work in the gig economy, the figure is even higher, at 63 percent. Then there are the other implications of such unpredictable working arrangements. What about pensions, for instance? Healthcare? Home ownership?
Safeguarding Gig Workers
So, what can be done to safeguard people from the more troubling aspects of gig work?
Under current guidelines, people who do gig work aren’t considered “employees” by the companies that employ them.
This means that firms can change people’s hours, depending on demand. It also means that workers are able to choose the shifts that suit them, and they can work for multiple companies. In practice, however, this can leave some people who only work for one company with few or no rights when it comes to holiday pay, sickness, and protection against unfair dismissal.
The lack of governance on this has meant that gig workers often find themselves in a “gray area” when it comes to employment protection. And in some cases it has been left to the courts, not the government, to decide what gig workers’ rights should be.
A growing number of judicial findings have sided with the employee (notably against online businesses, such as Uber), rather than the employer. This suggests that more does indeed need to be done to provide security, as well as flexibility, to gig workers in the future.
Surviving and Thriving in the Gig Economy
On Twitter, 41 percent of you felt that the gig economy was a good thing, because of the flexibility that it provides. Only 27 percent said that it was bad, because of the lack of job security. Almost a third (32 percent) weren’t sure.
On Facebook, however, a very different story unfolded. Only a quarter of you (25 percent) said that the gig economy was a good thing, while a whopping 75 percent said the opposite.
Your Top Tips
Many of you had some great tips and tricks for surviving the gig economy. The main themes that emerged were that it requires resilience, flexibility and determination.
For example, on Twitter, Nigel Peers, pointed out the need to be agile, saying, “Adapt and keep learning!”
Our Facebook friend, Mindful Mum, emphasized the importance of strong alliances when you’re working in the gig economy. It’s all down to “resilience and awesome relationships,” she said. “There’s no safety net. So, you quite literally have to pick yourself up again, which is where strong friendships come in.”
And another Twitter follower, Capt Rajeshwar Singh, summed it up when he said, “Be simple, be agile. Take corrective action at the right time. Have helicopter vision. Have backup support. Avoid ambush. Look up for crossfire. Have SMART Goals. Start listening. Have a clear vision of goals. Take tough decisions.”
What do you think about the gig economy? Has it helped or hindered workers and employers? What are your tips for people seeking to survive and thrive in the gig economy? Share your thoughts in the Comments section, below.
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