Gig economy?

Reader question:

Please explain the term “gig economy”.

My comments:

Gig economy refers collectively to productivity generated by businesses involving people doing part-time jobs instead of full time.

Freelance writers, on-demand taxi service drivers, weekend babysitters, fast-food restaurant jobs that pay by the hour, self-employed stand-up comedians performing from theater to theater, etc. All of these, I think, fall into the gig-economy category.

Gig economy or “gig” economy.

Gig, you see, originally refers to the traveling musician giving a performance here and there, in this theater today, that theater tomorrow or three days later, depending on whether he or she can find the opportunity, or engagement to work and get paid.

So long as there is work, the gigging artist will be fed and, hopefully, be happy.

One crucial characteristic of the artist making a living doing gigs is, you see, that such performing opportunities come and go. Now you have a job, now you don’t. And so people doing gigs don’t live on a monthly or weekly basis, as most people who draw regular salaries do. Instead, they live from a day to day basis. When job openings are few and far between, they’ll have lunch without knowing where money for dinner is going to come from.

Yes, that happens, when bad comes to worse and worse comes to worst, so to speak.

On the bright side, the good thing about gigging is that you get a lot of freedom in contrast to the full-time employee. As a freelancer, so long as you can afford it, you get to be your own boss, sort of. Whereas the full-time employee generally have to do what they’re told to do any time they’re told to do it, the freelancer gets to do jobs more or less on his or her own terms. They get to decide which jobs to take and when to take them. If they don’t feel like it, they can refuse to work.

Like a coin, there’re two sides to it.

Anyways, that’s the gig economy. In China, data is incomplete (to say the least) as regards to the size of the gig economy. We have no idea, for example, how many people make a living freelancing or doing one part time job or holding two or more at the same time. I have no idea at all. I don’t even have a ballpark figure or rough estimate.

In Britain or America, though, the picture is less muddled. In America, for instance, one survey showed that more people than ever are choosing to freelance – 55 million in 2016, or 35% of the total U.S. workforce (Freelancing in America 2016, Upwork.com, October 6, 2016).

That’s a lot, isn’t it?

I guess aside from people who have to gig because they cannot find full-time or long-term employment, more and more skilled people who relatively well-off are moving into the gig or sharing or on-demand economy – for the freedom or flexibility that’s in it.

Well, no more ado, let’s read a few recent media examples for find out more about the “gig economy”, a relatively new terminology reflecting on the new on-demand free-lancing job trends:

1. The Uber life isn’t an easy ride for all in the “gig” economy.

Most of the estimated 68 million gig workers choose the freelance lifestyle for better work-life balance. But nearly 20 million of them do it out of necessity because they can’t find better work or pay, according to a report by McKinsey Global Institute, a consulting firm.

A sharper narrative is rising this fall on gig workers, who have largely flown under the radar of most economic metrics. It’s a booming sector that Hillary Clinton warns “raises hard questions about workplace protections and what a good job will look like in the future.”

On Friday, U.S. officials report economic growth numbers. America’s growth has been painfully slow and officials admit they haven’t accounted for gig workers as the freelance economy has boomed. The Labor Department says it will start counting gig workers in its jobs figures by next May.

No doubt, the independent workforce -- led by companies like Uber, TaskRabbit and Etsy -- is growing fast. And for the workers who do it by choice, they report being happier than workers in the traditional 9 to 5 economy, McKinsey found.

“People value the autonomy, the independence, being your own boss,” says Susan Lund, research director at McKinsey.

Still for many, the gig economy is potholed with problems, such as lost wages, not enough hours, lack of insurance and overpaying on taxes.

Nearly 30% of gig workers who work part-time would prefer a full-time job, according to a survey by Stride Health, which provides gig workers with access to health coverage.

That’s concerning. Involuntary part-time work has plagued millions of Americans since the Great Recession.

About 75% of these part-timers either in poverty or are low-income individuals, according to a University of New Hampshire study.

Experts say income is very volatile for freelancers, which makes paying ordinary bills a challenge.

And the average freelancer is stiffed by employers on $6,000 a year, according to the Freelancers Union, which represents 300,000 independent workers across America.

“We don’t have any protections for freelance workers in America,” says Sara Horowitz, founder of the Freelancers Union who is pushing for a bill in New York City to improve worker protections. “For people who are feeling forced into this it can be difficult for them.”

- Millions in gig economy can’t find better jobs or pay, CNN.com, October 27, 2016.

2. A team of four experts is preparing to tour the UK to explore how the “gig” economy is affecting workers’ rights.

Mathew Taylor, chief executive of the Royal Society for the Arts, was appointed last month to lead the review into the impact of “disruptive” businesses such as Uber and Deliveroo.

New technology combined with new business models has led to a rise in workers doing short-term, casual work.

Many are not eligible for the minimum wage, sickness or maternity pay.

The review will address questions of job-security, pension, holiday and parental leave rights. It will also look at “employer freedoms and obligations”.

Mr Taylor will be joined by the entrepreneur, Greg Marsh, who founded onefinestay, a company which helps upmarket home-owners let their properties to visitors, Paul Broadbent chief executive of the Gangmasters Licensing Authority and employment lawyer, Diane Nicol.

The team will be talking to businesses and workers across the UK, including in Maidstone, Coventry and Glasgow. It will look into practices in manufacturing and rural economies as well as the “gig” economy.

“The most important part of our process is getting out and about to talk to businesses and workers across Britain about their experiences of modern work,” said Mr Taylor, who was formerly the head of the Number 10 policy unit under Labour leader, Tony Blair. His current role at the RSA think-tank is politically neutral. “As well as making specific recommendations I hope the Review will promote a national conversation and explore how we can all contribute to work that provides opportunity, fairness and dignity,” he said in a statement.

Typically workers in the “gig” economy use mobile phone apps to identify customers requiring delivery services or small practical jobs. The Department for Business says 15% of those working in the UK’s labour market are now self-employed.

- Government starts review of ‘gig’ economy, BBC.co.uk, November 30, 2016.

3. How many people are in the gig economy?

We’re very interested in this question at Nation1099, and, as it happens, it isn’t an easy question to find answers to, especially since the gig economy is growing and changing very fast and people mean many different things by the term.

Employment in general is undergoing dramatic changes, often summarized as “the future of work” or Workforce 2.0. Anyone following workforce trends will have seen eye-popping numbers about the gig economy along the lines of “one third of all workers are freelancers” or “half of us will be in the gig economy by 2020.”

But these statistics, which we will review in detail below, use broad definitions of the gig economy. They often lump together strategy consultants, freelance designers, musicians, drivers for ride-sharing apps, day laborers and people who work for temp agencies.

And the headlines about these studies on the gig economy usually conflate full-time freelancers, part-timers and people who had only one gig in the last year. All of these are part of the picture, of course. But if you’re trying to understand how many people work in the gig economy instead of in a traditional job, you need to rule out people who freelance as a side hustle or who are only dipping their toes in.

At Nation1099, our focus is on the knowledge work part of the gig economy — people selling professional or creative skills on a freelance basis. And, as we want to help professionals get better at managing and growing their freelance businesses, we’re interested to understand how many people are full-time in the gig economy.

So, in this ultimate guide to gig economy data, I’m going to round up and summarize all the reports, surveys and studies we can find. But I also have a secondary purpose of trying to answer the questions that interest us most: How many people are actually “making it” as freelancers? How many are freelance instead of in a traditional full-time job?

...

For now, here’s our conclusion: Based on this synthesis of all the high-quality studies we can find, we estimate that approximately 11 percent of the working adult population in the U.S. are working primarily as full-time independent contractors in the gig economy.

- Ultimate Guide to Gig Economy Data: A Summary of Every Freelance Study We Can Find, Nation1099.com, by Robert McGuire, July 17, 2017.

About the author:

Zhang Xin is Trainer at chinadaily.com.cn. He has been with China Daily since 1988, when he graduated from Beijing Foreign Studies University. Write him at: zhangxin@chinadaily.com.cn, or raise a question for potential use in a future column.