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How COVID-19 Powered Gig Economy Gains

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In 2020, the gig economy grew 33%.  This level of growth is impressive already, but it’s made more impressive next to the fact that the gig economy grew over 8 times faster than the national economy.  One possible explanation for this rapid uptick is the weakness in formal sectors.  With unemployment figures reaching 14% during the pandemic, 12% of the US workforce picked up gig work for the first time.  A popular pandemic job was food delivery for places such as DoorDash and UberEats.  With so many people staying out of restaurants and other public areas, delivery was seen as a safer alternative.

 

This explanation may seem compelling, but it does not account for all the gains the gig economy has made in recent years. Since 2015, the gig economy has doubled in size.  Over a billion workers worldwide are considered gig workers.  Not only has the gig economy been growing for a while, but forecasters expect its growth to continue into the post-pandemic era.  4 in 5 US companies want to increase their use of gig workers in the future, and half have already done so.  By 2027, 86.5 million Americans are expected to enter the gig economy for some duration of time.

 

What does this mean for workers?  While it is true that gig work is not for everyone, there is less to fear about the concept than some people think.  The gig economy is capable of providing a living wage; in the delivery service example from earlier, full-time drivers make almost $50,000 a year.  While not glamorous, that’s far better than most minimum wage jobs.  Moreover, most gig workers work less hours than their traditionally employed counterparts.  58% report less than 30 hours a week at work to sustain their lifestyle.  For those who fear the instability of gigs, consider the following.  If a gig worker loses one client, they still have several clients willing to pay them for work.  If a formal employee loses their full time job, they have lost all their income.  By some accounts, gig work has greater job security than traditional employment. 

 

Besides, not every gig worker drives for Uber.  Gigs can take a variety of forms, from babysitting to home repair to bartending at events.  People with a wide variety of skills and passions can monetize their hobby in the gig economy.  Additionally, gig work has yet to develop as many formal degree requirements as traditional employment.  This makes the gig economy more accessible to those who lack the means to go to college. 

 

COVID-19 may have accelerated the trend towards gig work in the modern economy, but it did not start it.  Conversely, the return to a post-pandemic normal will not end the presence gig work has established for itself in the US economy.  “A lot of really great people are increasingly looking for flexibility in their work, and a lot of them are finding it via the gig economy,” says Brandon Beneschott, co-founder and COO of Toptal.

 

CEO of Penske Media Group. Experienced Content Editor with a demonstrated history of working in the newspaper industry. Spoken on stages around the globe - NYU, US Embassy, P&G Toronto, and much more.

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