The gig economy has seen significant growth in recent years, particularly in the wake of the 2008 recession and as a 2023 recession looms on the horizon.
High unemployment and underemployment since the economy tanked in 2008 led to the creation of a “gig industry.” Formerly secure workers found themselves out of work or facing reduced hours and wages.
In response, many of them turned to gig economy jobs as a way to make ends meet. The trend has continued until now.
The gig economy provided a flexible and accessible way for people to earn a living, regardless of their level of education or experience.
Platforms like Uber, Lyft, TaskRabbit, and Airbnb made it easy for people to get started. Not requiring substantial inventory or prime real estate, many of these jobs required little more than a smartphone and a reliable car or truck.
Additionally, the gig economy offered freedom and flexibility lacking in traditional jobs, which is particularly appealing to younger workers and those looking for work-life balance.
The number of freelance contractors and workers in the U.S. grew from 55 million in 2020 to a record 60 million by the end of 2022.
Platforms like Fiverr and Upwork have made it easier for people to connect with one another and find gigs. They have made it easier for gig economy companies to manage workers, projects, and customers.
The ease of access and low barriers to entry has made it increasingly easy for businesses and individuals to offer services. Still, as the gig economy has grown, it has also faced significant challenges.
One of the most significant challenges is the lack of benefits and protections for gig workers.
Many gig economy workers are classified as independent contractors, which means they are not eligible for traditional benefits like healthcare, unemployment insurance, and workers’ compensation.
Additionally, gig workers have to bear the costs of their own tools and equipment. Most importantly, they must accept the risk of not being paid.
The gig economy has faced criticism for contributing to income inequality and displacing traditional jobs. Some have argued that the gig economy is simply a way for companies to avoid providing benefits and protections to workers.
An Uber driver in Florida stated that he would have to work “the full 12 hours a day Uber allows for any type of extra cash to invest in [an] IRA”.
Others have said that it is contributing to the erosion of the middle class.
Additionally, concern has grown about the negative impact of gig economy platforms on local communities, particularly ride-sharing and home-sharing platforms.
Nevertheless, the gig economy served as a vital safety net during the recession, and it has provided a way for people to earn money in a difficult job market.
As more people face job loss in this economically uncertain year, the opportunity and availability for gig work will likely continue to rise.