The Gig Economy: More Than A Fad

By Daniel Galal

The gig economy has undoubtedly exploded in popularity over recent years. And in cities like New York, there is no shortage of evidence. At any time– and in any part of the city –part-time delivery workers zoom by on electric motorbikes, brandishing the names of their employers. But as ubiquitous as this trend seems, most people fail to appreciate the nuances and downsides of this new sector. Before we look into how the gig economy is helping, and hurting, those who work in it, we need to outline the history of this growing sector.

While a new concept in the mainstream, some form of the gig economy has existed in the US for at least a century. The term ‘gig economy’ actually stems from the jazz musicians who played clubs in the early 1920s– not employed by the clubs themselves, musicians took jobs as one-time ‘gigs’. As the music and practice of gigging became part of mainstream consciousness, the term ‘gig’ quickly became synonymous with freelance, short-term work. Temp agencies, who provided temporary workers for their clients, opened amidst the Great Depression and Second World War, where labor was desperately needed. While never becoming a major sector of the labor market, gig workers held an important and unique role within the American economy. 

The rise of digital technology spurred huge growth in the gig economy space. Early adopters like Craigslist gave freelancers the chance to easily find odd-jobs on a temporary basis, instead of relying on a temp agency. But Silicon Valley truly elevated the gig economy to one of the major sectors of the American economy. Uber– a company now synonymous with the term ‘gig economy’ –created their rideshare company out of the startup culture of Silicon Valley. Though they were not the first, Uber cemented the idea of the gig economy into mainstream culture. The pandemic only accelerated this trend, where companies like GrubHub and Doordash revolutionized the food-delivery industry by catering to gig workers. Though not the sole factor, the rise of these gig-first companies led to a decrease in traditional wage work; 16% of Americans, and 30% of Americans aged 18-29, worked a gig job at some point in their careers. 

While the rise of gig work gave thousands of people access to accessible work, the nature of temporary work has created problems within the space. Gig work, aside from lacking job security, has become a symbol of modern labor exploitation. Those who work for the biggest companies “do not get baseline benefits and protections”, since these laborers are classified as independent contractors. And though the federal government has drafted legislation to mitigate this exploitation, gig workers still lack the benefits and security that come with more traditional employment. Beyond being an economic issue, exploitation in the gig economy has a disproportionate effect on people of color: “Black and Latinx workers make up less than 29% of the nation’s total workforce, but they comprise almost 42% of workers for app-based companies”. Gig work is still an attractive option for people struggling to find work, especially during a pandemic when more traditional jobs were put on hold. Because of this, it has taken a while for the biggest gig-sector companies to face serious regulation. But even if the industry still runs in a regulatory gray-area, large cities like New York are making a point to introduce basic regulation protecting wages and working conditions; for the largest players, this may be a sign that their business practices are due for an overhaul. 
Despite its relatively new position in the mainstream, the gig economy is more than a passing fad. A report by Ernst & Young found that organizations sought to increase their use of temporary laborers by 40% in a five year window. And the gig economy stretches beyond the service industry; white-collar gig workers are often brought in when a company needs specialized tasks completed on a one-time basis. In doing so, firms are reducing their costs while retaining a competent workforce. But once again, this growing reliance on temporary workers can lead to an overall lack of job stability and career trajectory if not kept in check. This all means that if the gig economy is here to stay, the industry needs to overhaul its views on labor and the nature of work. And if not, the gig economy might falter faster than it rose.