By Linda Nazareth* – June 2023
A decade or so ago, the idea of a gig economy was interesting, and maybe enticing as well. After all, the gold-watch-era of work had ended and most workers figured that they would be job hopping over the course of a career. Job hopping over the course of a year was a leap, but it seemed to bring with it some intriguing possibilities, such as the ability to set one’s own hours and working conditions and maybe even to earn more money than would be possible as an employee. Or so went the hope.
As of 2023, some things have changed. For one, the PR around gig work seems to be resolutely negative, with The New York Times recently declaring that gig work is no longer cool. Others have gone further, suggesting that it is a throw-back to the piece-work era and steps ahead of a return to child labour. Whether those things are true might be a matter of opinion, but in the dozen or so years that the term has been floated, a few truths about gig work have emerged:
Defining gig work is hazy, but the broadest definition refers to those who work on short term projects (or ‘gigs’) rather than being hired as employees with all the worker protections that the latter brings. Although the term inevitably conjures up images of Lyft drivers or Door Dash delivery guys on bikes, the term actually covers a much broader swath of workers. Back in 2016, consulting firm McKinsey & Co. came up with four separate categories of gig workers including ‘Free Agents’ (those who get the bulk of their earnings from independent work and want to keep doing it), ‘Casual Earners’ (those who do it for extra income and want to keep on at it), ‘Reluctants’ (those who get most of their income from independent work but would rather be employees) and the ‘Financially Strapped’ (those who use gig work for extra income but wish they didn’t have to). The definitions still hold up well. The headlines and the policy focus, however, continue to be on the category of the Reluctants with a nod to the Financially Strapped.
Despite some changes in recent years, government policies in Canada and in most parts of the world are still designed for employees, not gig workers. Where they have changed, the amendments tend to have been addressed to the ‘Reluctants’ (those who would rather be employees) rather than to any other groups. More nuanced policies, such as making it easier for independent workers to save for retirement or take parental leave, will hopefully be seen in future.
What we may also see is a surge in unionization as gig workers try to find an effective way to make their voices heard. Gig work has been in the spotlight lately in the case of the U.S. writers’ strike as they fight for protections, including the right to guaranteed contracts lasting weeks rather than days. As has been traditional in Hollywood, however, the writers are a unionized group and thus in a position to bargain. Most gig workers are not, which is something that might change.
Over the past decade, gig work winners and losers have emerged. Aside from the organizations that prefer to hire that way, there are groups of workers that have benefitted from it and will continue to. ‘Superstar’ workers, those who are in high demand (McKinsey’s Free Agents), can often do better taking a series of best-deals rather than settling for working with one employers. Travel nurses are a prime example, with reports suggesting that going where they are needed and being paid accordingly has earned many much more than would otherwise have been the case.
Government is generally thought of as a loser when it comes to gig work, given that payroll taxes and the revenue derived from them relate to traditional employees. However, there is also the perhaps controversial reality that the existence of the gig economy functions as something of an alternative social safety net and thus takes the pressure off government. Those who need extra income these days (the ‘Financially Strapped’) can access it more easily than in the past, through platforms such as Upwork, Fiverr or Taskrabbit, and many Millennial and Gen Z workers are taking that path. According to Statistics Canada, as of 2018, 28 per cent of Canadians aged 18 and older were making money through online platforms, including through selling merchandise on boards such as Kijiji or Etsy, posting content online on sites such as YouTube and offering their services through various apps, with the practice most common amongst those aged less than 44.
Between apps, economic change and artificial intelligence, work models are going to continuously be re-thought and the idea of a traditional job may not always be the model favoured by organizations. For younger workers, including Gen Z workers who will enter the workforce over the next few years, having a ‘side hustle’ is something that many will choose to continue at least for extra cash and perhaps with the dream of making it their primary source of income. Organizations, dealing as they will be with disruption of every kind, will also find that gig workers are at least a complement to a core of full-time employees.
To be sure, if we are going to make the gig economy a success, we need to make many changes from helping workers to deal with income fluctuations to providing government savings vehicles that help them save. Perhaps we will also need unions or some kind of craft guilds or organizations that help workers navigate the perhaps precarious future. What we do not need is wishful thinking, or a vain hope that we can turn back to the clock to a past where gold watches eventually end up on everyone’s wrists. Instead, moving forward means embracing a new reality, cool or not, and creating the tools to let all players deal with it.
Economist Linda Nazareth is the Host of the podcast Work and the Future and the author of Working it Out: Getting Ready for the Redefined Future of Work.
Stock Image from Pixabay
We are collecting data to better understand who is looking for work and what kind of opportunities jobseekers are searching for. This data is completely anonymous and non-personally identifiable.