The phrase "gig economy" isn’t just a buzzword; it’s a reality that’s changing the very nature of work. It broadly refers to an array of short-term work arrangements held by independent contractors and contract firm workers, as well as temp and on-call workers, among others. The recent uptick in "gig" opportunities is due, in part, to how relatively easy the internet makes it to find remote opportunities. Online platforms like Uber, Postmates and Airbnb are fueled by gig workers, and in other corporate or creative industries, this trend is becoming more popular, too.
Today, up to one-third of the U.S. workforce participates in the gig economy. To better understand this growing cohort of employees, freelance marketplace Fiverr commissioned market research firm Rockbridge Associates to analyze more than 20 million tax returns for non-employer entities. The results revealed that in the top 25 markets for gig work, the population grew by 14% over a period of five years, their earnings grew by 19% and as a group, they’ve contributed more than $135 billion to their local economies—that’s between 1 and 2% of GDP, depending on the market.
There’s no denying that gig workers are playing a significant role in our economy today, but what’s being done to empower and protect them? According to Rockbridge’s research, not enough. The study revealed key areas where freelancers need the government to step in and support them—and some states are already taking measures to offer the protection they need.
Better Internet Access
Geographic flexibility is one of the main factors that makes gig work so appealing, since it makes maintaining work-life balance more attainable. With a gig-based position, employees can find ways to fit work into their schedule in a way that makes them happier and more efficient. They can drop off their kids at soccer practice or check in on their elderly parents during the day before returning home to finish up some work. But the key to this flexibility is often affordable and reliable internet access.
Though it may seem like connectivity is a given, the U.S. actually ranks tenth in average connection speed, behind countries like South Korea, Norway and Japan, according to Akamai’s State of the Internet report. Though local initiatives, such as the New NY Broadband Program, the FCC’s Lifeline program and other municipal wireless movements, have made strides to introduce faster and easily accessible internet in certain areas, there’s more work to do on a national level to ensure that the growing class of freelance workers can continue to thrive from wherever they choose to work.
On Time Payment Protection
While full-time employees typically enjoy the benefit of regular, predictable salaries, freelancers’ paychecks are often less stable. And, according to Rockbridge’s research, it’s a big hurdle preventing the gig economy from exploding further. Today, legal protection for skilled gig workers varies widely and depends on different factors, including whether they are freelance contractors or run their own corporations.
But some states are working to give freelancers more control and legal protection when it comes to getting paid. For example, New York City’s "Freelance Isn’t Free" Act of 2017 gave the self-employed important legal protections that make it easier for them to earn a sustainable living. The law established the right of freelance workers to secure a written contract with their employers, ensuring timely and full payment and protection from retaliation if any issues arise.
And, just recently, AB5, a proposition to prevent companies from abusing how they pay independent contractors, moved closer to being passed, despite pushback from Uber, Lyft and other gig economy companies. Though the proposed law is designed to protect low-income workers (not necessarily just gig employees), it may provide payment protection for the self-employed as well. For example, if approved, companies like Uber would have to classify drivers as employees and compensate them accordingly.
As the gig economy continues to expand across industries and age groups, it will become increasingly important to protect this growing class of workers. Identifying the challenges they face and working to eliminate them when possible will not only improve their employees experiences, but likely boost local economies as well.
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