Finding a Way to Thrive in the Gig Economy with Better Data

The gig economy is a vital part of the workforce, providing flexible work opportunities for millions in the United States. However, the lack of consistent and accurate data about gig work poses significant challenges. Understanding the current trends and statistics can help gig workers navigate this dynamic landscape effectively and advocate for necessary changes. Here’s a look at the key insights and how better information could transform the gig work industry.

Aaron Padilla, a 47-year-old Salem resident, exemplifies the diverse nature of the gig economy. Moving from Colorado to Oregon to escape the traditional 8-to-5 grind, Aaron now juggles multiple roles: cidermaker, graphic designer, general laborer, and trivia host. His story highlights the flexibility and variety that gig work can offer.

The gig economy includes a wide range of non-standard work. This can range from jobs obtained through online platforms like Lyft and DoorDash to any short-term, project-based work. The broad definition makes it challenging to measure accurately, leading to widely varying estimates of its size.

Estimates of the gig economy’s size vary widely:

• The Bureau of Labor Statistics (BLS) 2017 survey estimated 3.8% of the workforce as contingent workers (around 6 million) and 10.1% in alternative employment arrangements.

• The Aspen Institute found that one in four workers engaged in gig work in 2023.

• Bank of America reported in April 2024 that 3.8% of customers used debit cards or direct deposit for gig income.

• Pew Research Center in 2021 estimated that 16% of U.S. adults had earned income through an online platform, with 9% in the previous year.

Gig work offers several advantages:

• For businesses, it is cost-effective since they do not have to pay employee benefits. Gig workers are independent contractors, not employees.

• For workers, flexibility is the major advantage. Gig workers can choose when and where they work, providing a better work-life balance.

However, gig workers are not covered by standard labor market regulations such as wage and hour laws, minimum wage, overtime pay, rest periods, workers' compensation, and unemployment insurance benefits. This lack of protection can be significant for those relying on gig work for their livelihood.

Data from the Pew Research Center and other studies reveal that younger workers and people of color are more likely to engage in gig work. Non-standard work is also more prevalent among economically disadvantaged individuals.

The pandemic highlighted the vulnerabilities of gig workers, particularly their lack of eligibility for regular unemployment benefits. The federal CARES Act provided funds for states to pay unemployment benefits to gig workers. Washington state has since passed legislation making unemployment insurance available to ride-share drivers, with other states considering similar measures.

New Jersey successfully sued Uber for $100 million, claiming drivers were employees, not independent contractors. Similar lawsuits are ongoing in New York, Pennsylvania, and Massachusetts. Cities like Chicago, New York, Seattle, and states like Colorado, Connecticut, and Minnesota are considering or have enacted protections for gig workers.

In Salem, the workforce was estimated at 183,100 individuals in March 2024. Using Aspen’s estimate, about 48,000 workers in Salem are engaged in gig work. Aaron Padilla, who enjoys his gig work but worries about financial security, is among them.

Accurate and consistent data is crucial for understanding the gig economy. Better information can help policymakers create fair regulations that protect gig workers while allowing businesses to thrive. The Bureau of Labor Statistics plans to release new data on non-standard work arrangements later this year, which will be vital for these discussions.

The gig economy offers exciting opportunities and significant challenges. By staying informed and proactive, gig workers can navigate this evolving landscape more effectively. Accurate data will play a crucial role in shaping the future of gig work, ensuring that workers are protected and businesses can continue to innovate. Embrace flexibility, pursue high-demand skills, leverage online platforms, and plan for financial stability to thrive in the gig economy.

By understanding the current trends and advocating for better information and protections, gig workers can achieve long-term success in this dynamic and growing industry.