Right now, an estimated 75 million “gig workers” work in the United States alone. These people are Uber drivers, computer coders, language experts, artists, and writers all working on their own terms. Their numbers continue to increase, suggesting the time will come for all kinds of industry where working a salaried job will seem outdated.
What, Really, is the “Gig Economy”?
The phrase “Gig Economy” describes the recent trend in the past decade of more workers and employers opting to perform “Gig Work”; that is, independent work intended to be temporary and usually in a piecemeal nature.
With the 2008 recession, gig work came into popularity as companies looked to cut costs and workers sought ways beyond the traditional to make money with their skills. The prevalence of gig work has not declined with the economic recovery that has taken place since then, but rather has increased.
For some, the phenomenon is not something to celebrate. Rather than workers and employers collaboratively deciding that gig work is the right fit for both parties, some see it as a way for employers to benefit from market underemployment.
The trend has not stopped, however, and a strong majority of gig workers do so because they prefer it for primary or supplemental income. The traditional 9-to-5 has gone by the wayside in favor of a system where millions of people have multiple income sources through gig work clientele (this is, of course, to say nothing of how the traditional 9-to-5 is mostly gone nowadays anyway). The IRS has grappled with the issue of multiple income sources, too, all but tripping over itself in its attempts to adapt its tax withholding calculators.
The Gig Economy will Affect Everyone
A recent Forbes article quotes Intuit CEO Brad Smith on the gig economy in 2017: “The gig economy [in the U.S.]…is now estimated to be about 34% of the workforce and expected to be 43% by the year 2020.”
You may find yourself asking, “Just who are these gig workers?” A 2016 McKinsey&Company report answers with a breakdown of the field: 30 percent of gig workers performed their work as their primary source of income; 40 percent of gig workers were casual earners; 14 percent were reluctant to earn and did so out of necessity for their primary source of income; 16 percent were financially strapped and earned for supplemental income.
Whether this field composition will change as the gig work phenomenon continues is a topic of intense speculation. From the perspective of economic theory, the gig economy removes economic inefficiencies and enables people to offer the best value possible for their skills.
The rise of the gig economy is seemingly inexorable. Discussions about the gig economy tend not to be whether it will continue to expand in the future because its accretion well after the 2008 financial crisis discredits the notion.
Our taxes may get more complicated, but a host of benefits ride on the back of this gig economy rise to dominance. Telecommuting, considered a luxurious benefit by many, will be more prevalent in the workforce thanks to the gig economy of the future. Skilled individuals’ ability to find work outside of the traditional college-to-position pipeline will improve, too. And folks in semi-retirement, or who are otherwise just busy with other things in life (like students), can still put their skills to use on their own terms.