In such a strong labor market, is the gig economy past its prime? Learn more about the problems facing the gig economy.
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Is the Gig Economy Jumping the Shark?
Since the Great Recession, gig jobs have been heralded as the economy of the future ㅡ but after a decade, are U.S. workers still banking on gigs?
The Rise of the Gig Many of the biggest gig startups began in the fallout of the Great Recession of 2008 7.2% unemployment after the Great Recession spurred the demand for temporary and quick-starting jobs In the decade since, the gig economy has expanded at an exponential rate As of 2017: AirBnb: 150 million users Uber: 42 million users According to some estimates there are as many as 75 million U.S. gig workers 47% of Millennial workers do some kind of freelance work 23% of workers age 55-64 consider themselves independent contractors Gig work is expected to significantly change the U.S. economy going forward Traditional workers 2017: 103 million 2027: 84 million VS Freelance workers 2017: 57 million 2027: 87 million BUT gig workers are strugglingㄧ60% couldn't come up with $400 for an emergency bill
After swelling numbers jumped on the gig bandwagon, many faced the realization that surviving as a gig worker was just not possible
A Tough Gig With gig jobs come serious financial detriments Impermanence Income unpredictability Lack of benefits Many workers do not earn a living wage, according to the median monthly income Non-transportation $793 Transportation $762 Selling $534 From 2014-2018, pay for even the most active participants dropped significantly Active Uber and Lyft drivers* both saw wages fall 2014: $2,500 a month 2018: $1,277 a month Comparatively, fewer gig workers feel they are doing their preferred type of work Traditional 71% Gig/independent 64%
In April 2020, the U.S. unemployment was half* of what it was in the midst of the Great Recession ㄧwith the job market recovering, are workers still willing to do gig work?
The Uncertain Future of the Gig Economy Increasingly, workers may have realized that gig jobs cannot replace traditional work Workers with non-standard working arrangements fell 2005: 10.9% 2017: 10.1% Supplemental gigging is on the rise 2017: 12.9 million 2018: 14.9 million While full time gig workers are decreasing 2017: 16.2 million 2018: 15.8 million U.S. Department of Labor ruled that independent workers are contractors, and not entitled to minimum wage regulations or benefits including insurance Consequently, gig workers may be realizing that with traditional employment steady, they are not willing to work as independent contractors 2005: 7.4% 2017: 6.9% Some gig-providing companies have employee turnover as high as 500% each year Traditional employers are now capitalizing on the rise of flexible workers 34% of employers utilize contingent workers for the long term As of 2016, 1 in 5 organizations was made up of at least 30% contingent workers As gig providers feel the burn of a retreating workforce, some are trying to keep up with traditional employers Uber and Lyft both became publicly traded in 2020 Uber shares plunged 7.6% in value on its first day on the stock market Lyft reported losses of $1.14 billion in the first quarter of 2020 "Uber Pro" rewards program offers free college tuition for top drivers Still, to many disillusioned workers, their efforts are too little too late In March 2020, Uber and Lyft drivers, not allowed to unionize, went on strike Workers protested the lack of benefits including overtime and health insurance
With top companies in chaos and workers jumping ship, is the gig economy doomed?
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