Thanks to the internet and technology readily available to anyone with a smartphone, the gig economy has taken off. The gig economy is characterized by the prevalence of short-term contacts or freelance work as opposed to permanent jobs. And in 2017, the gig economy is booming. By 2020, 40 percent of Americans will be independent contractors, according to a study by Intuit. But how did we get here?
The Rise Of The Gig Economy
The success of the gig economy can be attributed to the technology that has digitized most of the tools and services we use on a daily basis. Instead of hailing a cab, we order a Lyft. Instead of going to the store, we Amazon Fresh our groceries. Anything you could ever possibly want as a consumer is available at your fingertips.
Another factor contributing to the success of the gig economy is the entrance of tech-savvy millennial workers who don’t necessarily feel the need to be tied down to one job. Instead, some opt for part-time opportunities, some of which they’re passionate about and some that just pay the bills. The trade-off allows them to live more freely and creatively.
By 2020, 40 percent of Americans will be independent contractors.
Benefits Of Working In The Gig Economy
More people than ever are choosing to freelance these days. In fact, 35 percent of the total workforce identifies as a freelance worker, and 81 percent of traditional workers report that they would be willing to try it. What this tells us is that the gig economy isn’t going to slow down anytime soon.
But why not? Well, there are a number of factors that make the gig economy preferable to regular full-time work. For example, freelancing allows you to create your own schedule, which can mean better work-life balance. For those who get bored easily, working freelance gigs provides more variety in work.
Lastly, working in the gig economy can actually help your career. Babson College professor Diane Mulcahy actually encourages her MBA students to join the gig economy instead of spending time and energy searching for the perfect job:
The best strategy my students can follow is to prepare themselves to be independent workers, not full-time employees.
It’s not just about the fact that full-time jobs are becoming less available than they were in years past. It’s also the fact that you will have a better chance of creating an engaging and satisfying work life by focusing on getting great work instead of getting a good job, according to Mulcahy.
The Downside Of The Gig Economy
Not everyone is as passionate about the gig economy as Mulcahy. An article from The New York Times editorial board paints a more somber picture. The Times sees gig economy workers as overworked, underpaid and exploited. According to a Pew Research Study, gig economy workers tend to be poorer and are more likely to be minorities. If you decide to work as a freelancer, you should keep in mind that as an employee of the gig economy, you are not an employee at all. You’re actually a contractor, and contractors don’t qualify for basic protections like overtime pay and minimum wages, which is reflected clearly in contractor earnings. According to Pew:
Compared with the population as a whole, almost twice as many [gig economy workers] earned under $30,000 a year, and 40 percent were black or Hispanic, compared with 27 percent of all American adults.