What Is the Gig Economy? Definition, Pros & Cons


What Is the “Gig Economy” Anyway?


Everyone’s talking about the “gig economy”—and a growing number of people work in it. The term might seem like something new, but it really isn’t. Before apps brought the idea of on-demand services and gig work to everybody’s phone, the gig economy was sometimes called the freelance economy, agile workforce, or even temporary work.

It may also seem like everyone has a side hustle these days. Or that people have quit their high-powered day jobs for gig economy jobs that pay just as well but with less stress. And, while some people have successfully transitioned from 9-to-5er to gigger, the truth is, the gig economy isn’t just on-demand work.

What Is the Gig Economy

Musicians often refer to performing at a place as taking on a “gig.” The gig economy works much the same way (without the need to carry a tune). Instead of a traditional, in-office, full-time job with a single company, gig workers work as short-term, temporary, or independent contractors for one or a variety of employers (though they are not employers in the traditional sense).

Though the term “gig economy” is relatively new, these nontraditional work arrangements have been around a long time. A study by the American Staffing Association found that the majority of Americans (78%) see the gig economy as a new way to describe the participation of this longstanding independent workforce.

How the Gig Economy Works

No matter what industry a gig worker is in, the gig economy consists of small tasks that the worker completes. These tasks can be anything from getting groceries to writing code. A gig worker can opt to work for a set amount of hours (like choosing a shift) or work by the project. Once the task or shift is complete, the worker moves on to the next gig. That might be another task with the same company, or something entirely different with another company.

In most cases, the shifts or projects are flexible. A gig worker might have a day job where they work a traditional 9-to-5 job, and then a second “gig job” from 5-to-9 at night. Or, a gig worker might work multiple “gigs” to create a full-time job, but on a flexible or alternative schedule. Gig workers can also choose to work from 9-to-5.

While many people think that the “company” is an employer, in the gig economy, that is not the case. Many companies that utilize gig workers—Uber, Instacart, TaskRabbit, MechanicalTurk—do not employ the gig worker. The company is merely the “connector,” bringing contractors and clients together.

Who Are Gig Workers

Pinning down the exact number of people who work in the gig economy is difficult. Since the term “gig worker” covers a number of worker statuses—freelancer, temporary worker, and contract worker can all be a part of the gig economy—it’s hard to define who is and is not a gig worker.

However, some studies examine who and how many workers participate in the gig economy.

According to the BLS, as of May 2017, there were 10.6 million independent contractors (or 6.9% of all U.S. workers). The same survey also found that less than half of those workers rely on gig work as their primary source of income.

Many studies have tried to assess who a typical gig worker is, but there isn’t a single profile for a gig worker.

Men and women participate equally in the gig economy, but there are differences in what kinds of gigs they take on. Men are more likely to pursue labor gigs while women are more likely to work for direct marketing gigs or sell goods online. More men than women rely on gig work for full-time income. Women tend to work part-time or for supplemental income.

As new technologies continue to facilitate workforce collaboration and make working anywhere, anytime possible on a global scale, expect to see a lot more people experiencing the pleasures and pains of the gig economy. And, from a legislation standpoint, there’s far more to unfold.

The Pros and Cons of Gig Work

Like any job, there are pros and cons to participating in the gig economy.

Pros of Gig Work

Flexibility

The most obvious gig work pro is flexibility. As a gig worker, you get to choose when and where you work, which clients you take on (and which ones you don’t), and even set your rates in some situations. You can choose to work only weekends, only nights, or only one hour a week if you like.

Test Drive Something New

Gig work is something some people do for additional income. But for other people, it’s a way to test-drive a new career. For example, if you love pets and have thought about becoming a pet sitter, gig work as a dog walker or pet sitter is a great way to dip your toes in the water and see how much you love—or hate—doing it.

Being a gig worker allows you to explore a passion and see if it’s something more than a passing fancy, without losing your primary source of income.

Cons of Gig Work

Lack of Benefits

Once you’re in business for yourself, you’re in business for yourself. And that means it’s up to you to provide the benefits. Yes, you can choose when you work and when you don’t work, but the reality is, you don’t get paid if you don’t work. And, as a gig worker, you likely won’t have health insurance or other benefits, either.

Inconsistent Income

With most gig jobs, you’re paid by the project or task. The problem is, you may not have control over how many tasks you’re able to complete in a day or a week. If no one wants a ride, needs something assembled, or wants you to deliver something, you won’t make any money.

Burnout

Working multiple jobs or at odd hours isn’t for everybody. Some people find that as flexible as the work is, gig work becomes tiring and stressful after a while.

The Gigs Go On

The gig economy has been around for a long time, even if most people don’t realize it. Even though it’s nothing new, the gig economy isn’t for everybody. While the advantages of flexibility and being your own boss are tempting, those don’t always outweigh the disadvantages of inconsistent pay or a loss of benefits. However, if you want to test a new job or add some extra income to your bottom line every month, a gig job may be the right choice for you.

If you do go the “independent worker” route, we’ve got advice on how to find clients, what to do about health insurance, and even some tax tips.

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Beth Braccio Hering, Adrianne Bibby, and Robin Madell contributed to this article

Photo Credit: bigstockphoto.com

A version of this article was originally published on June 10, 2017.

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Robin Madell, Corporate/Executive Writer

Robin Madell has spent over two decades as a corporate writer, journalist, and communications consultant on business, leadership, career, health, finance, technology, and public-interest issues. She is a contributor to the On Careers section of U.S. News & World Report…Read More >

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