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Has The Gig Economy Finally Jumped The Shark?

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Has The Gig Economy Finally Jumped The Shark?

The decade following the Great Recession, the gig economy has expanded at an exponential rate. Gig jobs have been heralded as the economy of the future after the increase in unemployment in 2008 spurred greater demand for temporary and quick-starting jobs. This economy is not a new concept by any means, people have always worked gigs, but with the help of convenient technology, it’s estimated that there are as many as 75 million U.S. gig workers. Many of the biggest gig startups began in the fallout of the Great Recession such as Airbnb and Uber, but are these gig jobs enough to replace traditional work?

It’s increasingly popular to know someone who works in the gig economy. 23% of workers aged 55-64 consider themselves independent contractors, while 47% of Millennial workers do some kind of freelance work. This category of work is attractive not only because of the quick-start reputation but also due to its flexibility and freedom that it provides. The freelance workers is predicted to surmount traditional workers by 2027, with an increase from 57 million to 87 million gig workers. Even with these predictions, gig workers are struggling. People join this economy for a quick opportunity to create earnings, but 60% of gig workers couldn’t even come up with $400 for an emergency bill. It seems that as swelling numbers jumped on the gig bandwagon, there wasn’t room for everyone. This forced many to realize that surviving as in the gig economy was just not possible. 

It’s a tough gig becoming a freelancer or individual contractor. With gig jobs comes the potential of financial impairments such as lack of benefits, unpredictable income, and impermanence. Many workers do not earn a living wage, according to the median monthly income. While a number of gig jobs may have increased from 2014 to 2018, pay for even the most active gig participants dropped significantly. Active Uber and Lyft drivers both saw wages fall from around $2,500 a month in 2014 to $1,277 a month in 2018. It furthers the struggle of remaining in the gig economy if the pay decreases while doing a job that may or may not be preferred, resulting in many workers being unwilling to do gig work.

Comparatively, fewer gig workers feel they are doing their preferred type of work. Those who work traditional jobs are 7% more likely to be fulfilled and feel they are doing their preferred type of work. The future of the gig economy remains uncertain as to the job market recovers. In April 2019, the U.S. unemployment was half of what it was in the midst of the Great Recession causing the demands and incentives for the temporary gig job to decrease. Workers may have realized that gig jobs cannot replace traditional work. The lack of minimum wage regulations or benefits has contributed to some gig-providing companies 500% yearly turnover. As gig providers feel the impact of a retreating workforce, some are trying to keep up with traditional employers by offering rewards programs for their freelancers, but their efforts may be too little too late. 

Learn more about the rise of the gig economy and its detriments from the infographic below.

gig-economy-jumping-the-shark snip

Brian Wallace is the Founder and President of NowSourcing, an industry leading infographic design agency , based in Louisville, KY and Cincinnati, OH which works with companies that range from startups to Fortune 500s. Brian also runs #LinkedInLocal events nationwide, hosts the Next Action Podcast, and has been named a Google Small Business Advisor for 2016-present and joined the SXSW Advisory Board in 2019. Follow Brian Wallace on LinkedIn as well as Twitter.

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