How the Pandemic Transformed the Gig Economy

The global pandemic decimated many parts of the economy.  Formal unemployment figures reached their highest point since the Great Depression.  Uncertain about the future, many businesses refused to hire new workers in a traditional capacity.  With millions out of work and savings insufficient, 2 million Americans turned to gig work for the first time in 2020.

Gig work differs from traditional employment in that hours are determined mainly by the worker themselves.  Instead of obligatory labor on a fixed wage or salary, gigs are rewarded based on project completion.  While the pandemic did not invent gig work, it did accelerate the trend towards a freelance-oriented economy.  Gig work grew 33% in 2020, over 8 times faster than the US economy as a whole did.  And while some workers only turned to gig work for temporary relief, others are there to stay.  Over a billion gig workers operate worldwide, and 55 million of them live in the US.

Nowhere is the effect of the pandemic on gig work more apparent than the delivery service industry.  Lockdowns and restrictions led to increased use of apps like DoorDash and Instacart, both of whom rely on gig workers to fill orders.  Drivers take jobs as they are available, setting a work schedule based on market conditions and individual preference.  With few barriers to entry and the ability to make almost $50,000 a year working full time, many drivers survived the pandemic by bringing groceries to folks in quarantine.  Even with the pandemic receding, delivery is one of the fastest growing gig verticals.  The industry is expected to reach a total value of $200 billion by 2025.

Of course, delivery service is only one type of gig job.  Other gig workers take jobs in construction, babysitting, phone repair, photography, and pet sitting.  As more in person events happen, freelance hairstyling and bartending will take off once again.  People with wide ranges of talents can enter the gig economy, and many jobs lack restrictions based on degree completion.  This means high school grads can earn income comparable to their college-educated peers.  

Other benefits include flexible scheduling and fewer hours at work.  58% of gig workers work less than 30 hours a week while still earning a living wage.  Some freelancers would even argue they have better job security than the traditionally employed.  Their logic is as follows: losing one client reduces total income, but losing one full time job leaves a traditionally employed person stranded.  65% of gig workers believe a diverse clientele is the key to job security.

How do gig workers cultivate their business?  70% of gig workers rely on digital platforms to find work.  Online job boards that specialize in gigs can be found easily on app stores.  People who want to break into the gig economy need to build their profile with an open mind.  Take a wide range of gigs before specializing.  This allows the new worker to develop experience and collect good reviews before they’re established in the community.

Source: WageDev.com