Just how big is the "gig economy"?
A growing number of Americans are participating in the so-called gig economy, working for companies such as Airbnb, TaskRabbit and Uber that harness the power of the Internet to offer ride-sharing, food delivery, lodging rental and many other services.
What's less clear is just how quickly that sector is growing. The question is critical because the rapid emergence of such work arrangements, most of which aren't covered by traditional wage and labor laws, point to important changes in the U.S. job market. And the answer is proving hard to come by, with estimates by experts, and even official government tallies, all over the map.
"It has become clear to me that the federal government's definitions, data collection and policies are still based on 20th century perceptions about work and income," Sen. Mark Warner, D-Virginia, said in a recent letter questioning the U.S. Labor Department's ability to measure the gig economy. "In a 21st century economy, we need new and better information so we can understand the potential policy ramifications when more people, whether by personal choice or economic necessity, are making a living with no connection to a single employer, or without access to the safety net benefits and worker protections typically provided through traditional full-time employment."
One survey out this week suggests that some 45 million people, or more than 1 in 5 adults, participate in the gig economy, also known as the sharing or on-demand economy. According to the poll by Time magazine, public relations firm Burson-Marsteller and the Aspen Institute think tank, 14.4 million people derive a majority of their income from the gig economy, defined as "contingent work that is transacted on a digital marketplace."
The attributes of these positions, which include flexible hours, low or no training costs, and typically an ability to start work quickly, appeal to many workers, The Brookings Institution said in an online posting. "These features have enabled gig-economy workers, including those with other jobs, to generate new income or to supplement their primary incomes during difficult times in a strained job market."
But to suggest that 10 of millions of workers rely on such work seems far-fetched. In its own study, Brookings found that a much smaller number -- 600,000 workers, or 0.4 percent of the total labor force -- now work in the online gig economy. Two-thirds of them drive for Uber alone, the paper found.
Why the disparity? For one, debate over the size of the gig economy reflects a broader uncertainty over the exact number of temporary, freelance, part-time and others known in the trade as "contingent" workers. A 2015 U.S. Government Accountability Office found that the contingent workforce ranges from less than 5 percent to more than a third of the country's overall labor pool, depending on how jobs are defined and the data source.
Relatedly, the uncertainty over the breadth of the gig economy stems from an inability to definitively classify such workers as either as "employee" or "contractor."
In theory, people who work for Uber would be considered by the Bureau of Labor Statistics as "self-employed." But as Moody's Analytics economist Adam Ozimek has noted, the share of workers reporting that they are self-employed is at its lowest point in 70 years, even as the gig economy has grown. The share of people with several jobs is also declining, undermining the narrative of workers increasingly cobbling together a living by holding down multiple gigs.
The BLS used to conduct a survey of workers involved with so-called alternative arrangements, called the Contingent Work Supplement, but it hasn't done so since 2005 due to budget constraints. From 1995 to 2005 when it conducted the survey, the government found that about 30 percent of workers could be considered contingent.
The lack of a clear definition for gig economy workers has labor advocates calling for a new labor classification to ensure that they have adequate protections on the job. Since many are viewed as freelancers or self-employed, for instance, they aren't covered by laws mandating overtime pay, compensation for workplace injuries and other benefits afforded employees.
It's led to lots of legal wrangling among gig economy workers who feel they're being treated as employees because of demands placed upon them by companies. The numerous lawsuits filed in the nation's courts have the potential to disrupt the gig economy, and possibly even render it obsolete.
Only time will tell if regulation can catch up with industry in developing a new classification of worker, one that squares the legal rules governing work with the new products and services that the marketplace demands.
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