The U.S. government doesn’t know how big the gig economy is | Innovation & Feature
It could be anywhere from 4 percent to 40 percent of the workforce.
By some measures, more than half of the American workforce could be participating in the gig economy within the next decade. As more Americans take on employment from the likes of Uber and Airbnb, this type of work is becoming integral to Americans’ livelihoods, and the importance of tracking it increases.
But the size and scope of the gig economy is difficult to measure.
That’s because it can potentially include every worker who doesn’t have simply a steady nine-to-five job. Depending on your definition, that could mean part-time work completed in addition to a full-time job, contract employment or working full-time but through an online intermediary like Uber.
The government’s Bureau of Labor Statistics, which is the standard bearer when it comes to employment data, has largely overlooked the gig economy. Its contingent and alternative employment survey this year actually showed the share of gig workers declining to 10.1 percent of the workforce since the study was last conducted in 2005 — before the advent of the iPhone and Uber. That’s because the study looks at those who do contracting, on-call and temporary work as their primary source of income, which isn’t how the gig economy works. Rather, people use gig economy jobs to supplement their other income, which is often no longer enough to make ends meet for many. (The BLS has additional data specific to work found on mobile apps; a report will be released in September.)
“The idea that a primary job will pay for most expenses and can be relied on is no longer the case for working Americans,” Louis Hyman, director of Cornell’s Future of Work project and a co-director of the Gig Economy Data Hub, a resource that pulls together and clarifies the various studies on the gig economy.
He blames algorithmic scheduling — in which companies use software to dynamically alter schedules to minimize full-time work, and by extension save money — for fluctuations in income that are driving people toward gig work.
Gig workers currently make up anywhere from 4 percent to nearly 40 percent of the U.S. workforce, depending on individual study definitions (more on that below).
A JPMorgan Chase Institute study thatfocuses on people who receive income from 30 distinct online platforms, including Airbnb and Uber, measured the online gig economy as 4.3 percent of the population.
On the other end of the spectrum is an Upwork/Freelancers Union study that has a much broader definition of gig work: Any supplemental, temporary, project- or contract-based work. It found that 36 percent of the workforce have participated in the gig economy in the last year.
Each data source has its own definitions, methodology, plusses and minuses. Here are some quick notes on the different studies:
Upwork / Freelancers Union: This online survey counts the number of workers who engaged in supplemental, temporary, project- or contract-based work at any point in the past 12 months.
Federal Reserve: Defined “gig work” as occasional work activities and side jobs, in the month before the 12,246 respondent survey.
McKinsey Global Institute: Online survey of 1,804 in which researchers identify respondents whose work is characterized by independence regardless of formal arrangement.
MBO Partners: Surveyed 3,584 workers online about independent arrangements, including consultants, freelancers, contractors, temporary and on-call workers.
ZipRecruiter: Asked 9,000 active job seekers on its online platform: Are you a freelance, independent contractor or gig economy worker?
Bureau of Labor Statistics: Asked 60,000 households about their reliance on alternative arrangements for their main job, including temp agency work, on-call work, contracted work and freelancing, in the past week.
JPMorgan Chase Institute: Looked at income streams from 30 distinct online platforms in the past 3.5 years, extracted from anonymized JPMorgan Chase bank accounts. Includes capital markets like Airbnb.
You can find more gig economy datasets at the Gig Economy Data Hub.