Independent Contractors and the Emerging Gig Economy 

Number of businesses without employeesFrom the American Action Forum, Will Rinehart and Ben Gitis review data from the University of Chicago’s National Opinion Research Center, Government Accountability Office (GAO), and the Bureau of Labor Statistics and conclude that the workers in the gig economy grew significantly from 2002 to 2014 and that independent contractors accounted for 28.8% of all jobs added from 2010 to 2014.  They write:

“The rise of the so-called “gig economy” and the increasing use of independent contractors has captured the attention of policymakers. Nontraditional work arrangements are hardly a new development in the American economy, yet there is the perception that smartphone apps and online marketplaces have led to a sharp increase in nontraditional work and even a new class of jobs. The goal of this short paper is to survey the limited available data to shed light on the magnitude of these labor force developments.

Our analysis covers two aspects of work arrangements: (1) the gig economy – workers with alternative work arrangements, and (2) the online gig economy – workers who utilize new technologies, markets and platforms for alternative work arrangements. In addition we touch on related developments in product markets giving rise to the “sharing economy” – goods and services that employ under-utilized assets via online marketplaces or decentralized networks.

We find that the number of workers in the gig economy grew between 8.8 and 14.4 percent from 2002 to 2014. For comparison, overall employment increased by 7.2 percent over the same period. Independent contractors constitute a significant portion of gig workers, and grew by 2.1 million workers from 2010 to 2014, accounting for 28.8 percent of all jobs added during the recovery. The online gig economy has experienced significant growth as well. Faster growth in taxis and boarding rooms since the arrival of companies like Uber, Lyft, and Airbnb indicates that online gig jobs are transforming the labor force. In particular, the data suggest that the ride sharing industry has helped bring in an additional $519 million in economic activity from 2009 to 2013, and created 22,000 jobs in the sector….”

Read the full story at Independent Contractors and the Emerging Gig Economy 

The authors provide a diagram that illustrates the relationship between the gig economy, the online gig economy, and the sharing economy.  The diagram is a great depiction of the gig economy — showing how different parts overlap shows that they overlap but are different concepts.

gig economy diagram from the American Action Forum

via the American Action Forum

The authors provide an analysis of the gig economy and conclude that the number of independent contractors is increasing.  But as Justin Fox discussed in  Where Are All the Self-Employed Workers?, the challenge is identifying the type of independent contractors — are the number of ranchers declining and the number of hairdressers increasing?  The type of independent contractor or self-employed workers is a key factor that requires additional analysis.

 

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