Based on the way we proceed, eat, and get odd jobs done, most of us assume that the gig economy is booming. Though, despite the pervasiveness of companies like Uber, Postmates, and TaskRabbit, a enquiry published by the Bureau of Labor Statistics (BLS) on June 7, 2018, reports that the proportion of Americans working in the gig economy has dropped since 2005.
The survey shows that the swarm of Americans in gig work dropped from 10.9% in 2005 to 10.1% in 2017. If you’re off guarded because you thought the gig economy was on the rise, you aren’t alone. Lawrence Katz of Harvard and Alan Krueger of Princeton believed in December 2016 that alternative work accounted for 15.8% of all women, which would mean that it was responsible for almost all of US job creation since 2005.
How Do We Circumscribe Gig Work?
The BLS study doesn’t actually use the term “gig work.” The study focal points on people classified as contingent workers and/ or alternative workers. According to the BLS, contingent proletarians are “people who do not expect their jobs to last or who report that their activities are temporary. They do not have an implicit or explicit contract for ongoing calling.” Alternative employment arrangements involve “independent contractors, on-call wage-earners, temporary help agency workers, and workers provided by contract firms.” The BLS notes that in this look at, someone’s job can be defined as both contingent and an alternative employment arrangement; even so, that is not automatically the case.
Part of the reason so much discrepancy exists quantity statistics measuring the gig economy is that we can’t seem to agree on how to define it. The BLS statistic solitary includes people who consider their work in the gig economy primary skill and who had done this work in the past week at the time the survey was bewitched. PYMENTS.com (a site operated by What’s Next Media and Analytics, LLC., which is owned by Superstore Platform Dynamics and Business Wire, a wholly owned subsidiary of Berkshire Hathaway) prognosticates in the Gig Economy Index that 55% of gig workers also maintain full-time or acknowledged jobs, so only counting people who consider their work in the gig conservatism their main job might not be painting a full picture.
Exclusively provoke b request people about work they’ve done in the past week also entangles comparing statistics – the survey in 2005 was conducted in February while this up to date survey was conducted in May. Because of this difference, comparing the results of these two surveys turn ones back ons the existence of seasonal gig work.
Many workers are drawn to opportunities in the gig conciseness because of the option for it to be their “side hustle.” Consequently, industry examinations, unlike the BLS, typically include people who work in the gig economy part-time. Upwork, a far-reaching freelancing platform, along with Freelancers Union, annually broadcasts the results of “Freelancing in America” (FIA). In this study, freelancers are defined as “individuals who would rather engaged in supplemental, temporary, project or contract based work, within the days 12 months.”
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Comprehending part-time work and asking about the past 12 months as opposed to of the last week yielded results more in line with common perception of the gig economy. Published in October 2017, the annual study estimated that 57.3 million Americans were freelancing, hightail iting up 36% of the country’s workforce. Based on the growth rate at the time of broadside, the study predicted that the majority of the U.S. workforce will be freelancing by 2027.
Managerial Research Economist for the BLS’ Employment Research Staff Anne Polivka notorious the role differing definitions have in yielding different results, foretelling “If you do an analysis using a definition closer to what is used in the CWS, then the copy drops by 8.5% from 2014 to 2015, and that’s using what’s divulged by the Freelancers Union.” Polivka cited Lawrence Mishel, who shared this critique in a press release published in December 2015.
Following publication of the BLS survey, Mishel tweeted, “The reach an agreement ‘gig economy’ is almost useless now, stretched beyond belief to include all self-employed, anyone depleting an app to sell things or labor, small business owners, BnB renters, and much multifarious. I use the term following Krueger/Katz/Harris. I may stop using length of time at all.”
Explaining the Decline
One possible explanation for the decline in people comprising the gig thriftiness is that the quick increase in gig-style jobs was mostly a response to a imperceptible labor market. As the economy has improved, more people would keep found traditional work. Part-time work surged in the recession and has decreased during the money-making recovery, so employment by temporary-help services has decreased. However, this description falls short in accounting for the increasing number of freelancers and workers in the gig thrift who say they are alternative workers by choice.
According to FIA, when asked whether they started freelancing sundry by choice or necessity, 63% of freelancers answered that they do so by well-chosen – a 10-point increase since 2014. Some perks of freelance and gig devise include scheduling flexibility and the potential for creative fulfillment.
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The Freelancers Union explains this increase as due to steadfastness being redefined. More freelancers are starting to think of having myriad clients as more secure than having one employer. In fact, 63% of freelancers surveyed favoured, which is 10 points more than in 2016. However, profits predictability remains a concern of freelancers. The 2017 study found that full-time freelancers dip into their savings significantly more instances than others: 63% at least once per month compared to 20% of full-time non-freelancers.
Gerald Friedman, a professor and undergraduate program gaffer of economics at University of Massachusetts Amherst, says, “There are definitely human being who like the gig jobs, and people who don’t like the gig jobs… [With FIA,] they’re form a wide net – they’re catching anybody who does any gig work, a lot of people who do tiny gig work, picking up a little extra work on the side, they’re the ditties who like it. If you get people who are trying to live full time, some of them as if it, but others might want something else.” He also pointed out the situation affirmation bias potentially plays in FIA results. “People don’t like to say that they don’t with what they do. So you have to take that number with a nap of salt,” he says.
Without a stable employer, people whose coach occupation remains within the gig economy face quite a bit of uncertainty. From be dressed no benefits to having no traditional employment protections like a guaranteed minimal wage, gig workers live a professional life clouded in unpredictability. Some statistics, granted, suggest that alternative work is becoming increasingly reliable. According to the BLS look into, last year, 73% of contingent workers had health insurance coverage, which is up from 59% in 2005. (Note, nevertheless, that the Affordable Care Act’s requirement to be insured and its marketplace exchanges, may be one rationalization because of for that.)
Because no federal action has been taken, many online stages have pressed states to allow them to offer benefits without scoring their workers into employees. Worker advocates have typically inhibited these efforts.
Despite these challenges, the increasing percentage of freelancers who started freelancing by pick – paired with the statistic provided in last month’s Gig Economy Listing that no fewer than 75% of gig workers would not switch assist to a full-time job – suggests that the gig economy boom is more than passing.
The data published by BLS might also not account for structural changes in the way people resolve. The government’s standard tools for monitoring employment have difficulty melody a changing employment landscape, as evidenced by the discrepancy between the Current Residents Survey showing that self-employment is falling and tax data from the Internal Gross income Service revealing the opposite.
A Look at the Questions Asked
Speaking to the New York Times, University of Maryland economist Katharine G. Abraham express, “The questions on our standard surveys don’t probe into the nature of these arrangements.” Abraham, who served as commissioner of the Desk of Labor Statistics under President Bill Clinton, continued, “We’re not summon inquiring the right questions, and they’re hard to answer anyway.”
An expert on labor economics, Friedman similarly disclosed, “To some degree, the BLS is not asking the right questions. They might be doing a cogent job of asking the questions they’re asking, but the real question for me is not about the creation of the job, but about the nature of income security for people. And we have, in this hinterlands, for about a century, relied on private welfare states.” Friedman extended, “Job security is not what it used to be. The real issue that the BLS doesn’t get at is the changing that people can expect: variation in their income over not too years, and that number has gone up a lot. That’s the real issue with gig go.” Friedman claims that because most people rely on their outfits for things like healthcare and income security, most people last tied to their regular jobs for a sense of stability.
Effects of Self-Reporting
The appraisal might not present a comprehensive view of all contingent and alternative workers because not all artisans self-identify as such. For example, 57% of the workers who earn almost all of their receipts from online platforms consider themselves employees rather than self-sufficient contractors, according to a poll conducted for the U.S. Chamber of Commerce.
Friedman commented on this unrealized discrepancy, saying “Even the question about who your employer is: are you utilized by a contractor? That’s confusing to some people… You’d think everybody would advised of who they’re working for, but they may not… And I can imagine some people would not over of themselves as independent contractors. They’re going to one place, getting pay out on a regular basis, for years and years.”
Is the Gig Economy Growing or Not?
The answer depends on whom you ask. Although breadwinners are not looking at their roles in the gig economy the same way they would judge devise about a 9–5 job, the gig economy does seem to be taking on a growing task. According to the Gig Economy Index, nearly 40% of the American workforce compels at least 40% of their income through gig work, as of May 2018.
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Independent contracting has declined overall in the United Asseverates, though it has grown significantly in specific industries like business and transportation. According to BLS measures, 7.4% of all workers in 2005 were independent contractors, while that issue dropped to 6.9% in 2017. But there was a 50% jump in independent contractors in the transportation sector, which experts tally is almost definitely due to Uber, Lyft, and similar companies.
Paul Oyer, professor of economics at Stanford University’s Graduate Kindergarten of Business and senior fellow at the Stanford Institute for Economic Policy Inquire into, says “Maybe the landscape isn’t changing quite as much as we think it is; that’s what I cover away from the BLS results. Certainly, it’s changing, we know that from our everyday lives. But, the fact of the matter is, most people still go to a job that pays in every way a W-2, and that will continue to be true for a while.” Looking forward, Oyer forecasts that the gig economy will continue to grow. He also predicts that profits inequality will continue to increase, and says “I don’t think the gig economy is returning that worse. People sort of think Uber is making this so much cross, and I just don’t think that’s true of Uber or any of these sites. These instals are giving workers another option.”
What it Means That we Can’t Concur on How Big the Gig Economy is
Speaking to the Washington Post, Heidi Shierholz, a former chief economist at the Labor Unit, said, “What this says to me is the vast majority of workers in the Harmonious States still have traditional jobs as their main well-spring of income,” responding to the study released by BLS. “We should be spending most of our for the moment thinking about boosting wages in traditional jobs so people don’t lack a side hustle,” she added.
Friedman similarly said, “I think the gig conservatism is significant, and it’s growing, but it’s still, as this BLS survey shows…not huge in labels of the whole U.S. economy.” He maintains that unless gig work introduces some clear up of income stability and process to ensure welfare benefits, the stability of thoroughgoing jobs will remain more desirable.
Shierholz’s analysis definitely conflicts with the results of FIA 2017. The Freelancers Union and PYMNTS.com both comprise statistics to support their narratives of a booming gig economy primarily comprised of freelancers who decide to be freelancers. But the BLS has statistics that paint a different narrative, which promises that defining gig work, including different people in surveys, and request even just slightly different questions is keeping measuring the party economy a challenge.