What is the gig economy and why is everyone talking about it? Gig work has been around since the beginning of time, but as far as the modern era goes it hasn’t been quite as standard in the employment landscape until very recently.
“Gig” is a term that was coined by Jazz musicians around the turn of the last century that referred to their performances. It was around that time that organized labor was also pushing for more regular work schedules, and by the postwar era, one-income households with 40 hours a week jobs were considered the norm. By 1995 in the United States, only about 10% of workers were in nontraditional jobs and working arrangements.
During the time of the industrial revolution the economy was changing in very noticeable ways, and workers needed to fight for reasonable work hours and working conditions. Labor and employers agreed upon the 40-hour workweek, which gave people greater predictability in their lives.
But now the economy is changing again and workers need greater flexibility in order to participate to their fullest. The gig economy is taking over, and in just a few years gig workers are expected to outnumber traditional employees.
Worldwide, however, there is a different story. The global gig economy is worth US$4.5 trillion as of last year. The prevalence of smartphones and internet access worldwide are making it much more attractive to people who may lack access to traditional employment.
Apps like Airbnb, which was created to help roommates make rent, can help people rent out extra rooms in their house or extra properties on their land to tourists and business travelers. Lyft and Uber can help people afford vehicles who might otherwise not be able to by putting that vehicle to work. Postmates and Instantcart type services can help people who are lacking in employment options find work delivering food to those in traditional employment who need assistance with day-to-day tasks.
In the United States, gig work is still mostly seen as harmful to the workers, and there are constantly new legal challenges to it, mainly because of issues of liability and workers’ rights. But the system is helping many people in most cases. The average gig worker is someone who works in addition to their regular job, and they can expect to add US$1122 a month to their income because of it. Only 16 per cent of gig workers are working in the gig economy as their only source of income, even though they would prefer traditional employment, and 13 per cent are using gig work to cover all their monthly living expenses. The majority are involved in gig work in order to increase their spending power a little more.
By 2025, the gig economy is expected to add US$2.7 trillion to the global economy while increasing employment worldwide by 72 million full-time equivalent positions. An estimated 10 per cent of the global labor force will be impacted. Learn more about the history and future of the gig economy from the infographic below!
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