The “gig economy” is a buzzword on the news and in everyday conversation. It refers to the rise in contracted work—or “gigs”—that aren’t traditional jobs. Ridesharing, food delivery, dog walker, and writers are part of this economy.
An Economy of Contracted or Independent Work
The “gig economy” is a phenomenon defined by a rise in independent or contracted work. According to a Marist poll, one-fifth of American jobs are contracted right now, and half of the US workforce could find themselves doing contract or freelance work over the next decade.
But what is an independent contractor? Think of construction, web design, freelance writing, or Uber driving. Workers in these fields aren’t legally defined as “employees.” Instead, they work under contracts or operate their own business as an independent worker.
To some people, the rise in contracted work comes as no surprise. We’ve spent the last decade recovering from a recession, so our workforce is bigger than it was a decade ago. And of course, there’s the internet. The internet’s made it super easy to hunt down contracted work (especially short-term work), and the rise of internet content, like YouTube videos (or the article you’re reading right now), has created a demand for writers, creatives, web designers, and programmers.
But the internet’s impact has managed to reach beyond trades like writing or home repair. It’s extended to traditionally low-income jobs with a low barrier to entry, like delivery driving or taxi driving.
And that’s really what defines the gig economy: the rise of companies like Uber, Lyft, BiteSquad, and Instacart that use contractors to drive people, delivery food, and groceries around. These companies have revolutionized low-income jobs, which is why people talk about them so much. They also give us a glimpse at how the gig economy might affect jobs in the future, assuming that other industries might switch over to contract-based employment.
The Gig Economy Is a Lifeline for Some Families
Contracted work has its perks. You can figuratively “be your own boss,” work around your schedule, or build a business based on your trade experience. You can even use contracted work as a side-job for when times are tough, or for when you’re busy going to school.
Some (but not all) of these perks carry over to the contracted jobs from Uber or Instacart, which have helped to expand the American workforce and provide economic security for some American families.
Gigs like driving for Uber are great for people who can’t find traditional full-time employment due to inexperience, lack of education, or disabilities. They’re also great for people who need a flexible side-job or a temporary full-time job, as they allow you to work as much or as little as you’d like.
This is the main reason why people talk about the gig economy so much. Contracted work with a low barrier to entry is helpful to low-income families, and it’s helped to expand the workforce in ways that traditional employment cannot.
Of Course, the Gig Economy Isn’t Perfect
The gig economy is helpful to some families, but its gotten a lot of press for its flaws.
Again, the biggest strength of Uber, Lyft, and Instacart is that they’re flexible low-income jobs with a low barrier to entry. But that can also be seen as a flaw. Independent contractors don’t have the rights of full-fledged employees, which means that the 15.8 million Americans who work a “gig” full time aren’t guaranteed a federal minimum wage or employer-provided health insurance. They have to pay the total cost of payroll taxes for Social Security and Medicare, too. Laws that are meant to protect low-income workers only apply to jobs, not gigs where you’re technically “working for yourself” even if all you do is drive for Uber.
That’s not a big deal when you’re working in a trade like construction or freelance writing, where the skills that you develop working can lead to better opportunities and financial security. But it is a big deal when you work full-time at a low-income gig like Uber, which has no opportunities for upward mobility. Understandably, some people get stuck in these jobs, and they start to feel exploited over time.
This isn’t the only issue that people have with the gig economy, but it’s a common complaint that keeps pushing the words “gig economy” into the news. And of course, there’s no easy fix. Modern taxi and delivery services rely on contracted work for their success, and some people are happy working in the system just how it is.
All in all, the words “gig economy” are used to describe a general rise in contracted work, with a particular focus on new low-income jobs like driving for Uber or grocery shopping for Instacart. These new jobs (and the gig economy as a whole) are often praised for acting as a financial lifeline, but they’re also routinely criticized for being exploitative.