The Rise of the Gig Economy & Its 44 Million Workers
A new staffing industry report details 2015 work performed on a short-term basis, showing a rise of the Gig Economy.
Diane Mulcahy, author of The Gig Economy and academic lecturer, said that since the number of private-sector jobs in America has dropped sharply since 2000 and reached historic lows by 2015, the 'gig economy' is only going to grow.
"Where there once were jobs, in the gig economy there is now just work," wrote Mulcahy in the Harvard Business Review in October 2016.
Some 20 to 30 percent of the working population does some form of independent work, according to a McKinsey Global Institute survey of 8,000 people she cited. The gig economy specifically relates to labor and is different from the Sharing Economy, which includes non-labor related online services like booking private travel accommodations.
More recently, a report by the firm Staffing Industry Analysts (SIA), found that total spending on contract gig work in 2015 alone was about $792 billion. The report provides information on:
- Gig economy workers -- who they are and how they get their work
- Worker preferences -- what kinds of opportunities they seek
The 44 Million & Their Challenges
According to SIA, about 29 percent of the U.S. workforce gigs -- that means about 44 million people rely on contingent work for their income or part of their income. They are:
- Independent Contractors/Self-Employed
- Human Cloud Workers
- Temporary Workers via Staffing Agencies
- Temporary Workers, Sourced Directly
- Consultants Employed Through Consulting Firms
The sole proprietors comprise the largest concentration of contingent workers in the United States, about 23.5 million people.
A rising category is the human cloud workforce. About 9.7 million complete work through Web or app-based platforms.
While it is the category with the second highest amount of workers, the segment received the lowest annual spend of the gig economy's $792 billion in 2015 at $11.5 billion. However, about 69 percent of human cloud workers are moonlighters -- workers that perform more than one type of work at a given time. They are looking to pick up additional work with specific end dates to supplement their incomes.
According to a similar report, the 2016 Freedom Economy report, reviewed by the online publication Small Business Trends, millennials make up the largest portion of all workers in the gig economy. More than one third of all millennials are independent workers.
While technology has drawn pathways to enter the gig economy, the style of work is not without its challenges for the workers. The 2016 report indicated that about 57 percent of independent workers surveyed experience cash flow issues from time to time.