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What is the gig economy and why is it so controversial?



  A poster with the phrase
Artur Szczbylo / Shutterstock

The "Gig Economy" is a buzzword in the news and in everyday conversation. It refers to the increase in commissioned work ̵

1; or "gigs" – that are not traditional jobs. Carpooling, food delivery, dog walkers and writers are part of this economy.

An economy of contractual or independent labor

The "gig economy" is a phenomenon defined by an increase in independent or contractual work. According to a survey conducted by Marist, one-fifth of American jobs are currently contracted, and half of the US workforce could be contracted or self-employed for the next ten years.

But what is an independent contractor? Think of construction, web design, freelance writing or driving over. Workers in these areas are not legally defined as "employees". Instead, they work under contracts or operate their own business as self-employed workers.

For some people, the increase in contract work is no surprise. We spent the last decade recovering from a recession. So our workforce is bigger than a decade ago. And of course there is the internet. The Internet has made it very easy to find commissions (especially short-time working), and the rise in Internet content, such as YouTube videos (or the one you are reading) has a demand for authors, creatives, web designers, and programmers.

But the effects of the Internet have made it possible to go beyond the craft, such as writing or repairing at home. It covers jobs with a traditionally low income and a low barrier to entry such as delivery or taxi driving.

And that's what the gig economy is all about: the rise of companies like Uber, Lyft, BiteSquad and Instacart, who use contractors to drive people, delivery food and groceries around. These companies have revolutionized low-income jobs, which is why people talk so much about them. They also give us an insight into how the gig-economy could affect jobs in the future, provided that other sectors could switch to contractual employment.

The Gig Economy is a lifeline for some families

  A few food delivery workers in Italy. They work for the Italian equivalents of companies like BiteSquad.
MikeDotta / Shutterstock

Contract work has its advantages. You can literally be "your own boss," follow your schedule, or build a business based on your trading experience. You can even use the contracted work as a side job in difficult times or when you are attending school.

Some (but not all) of these benefits will be transferred to the contracted work of Uber or Instacart, which has helped to increase American workforce and provide economic security for some American families.

Performances such as Driving for Uber are great for people who do not find traditional full-time employment because of inexperience, lack of education or disability. They are also great for people who need a flexible part-time job or a limited full-time job because they can work as much or as little as they want.

This is the main reason why people talk about the gig economy so much. Temporary work with a low barrier to entry is helpful for low-income families and helps to expand the workforce in a way that traditional jobs do not provide.

Of course the Gig Economy is not perfect

  A car with the Uber sticker on the back of the window.
Jeramey Lende / Shutterstock

The gig economy is helpful to some families but has put a lot of pressure on them because of their shortcomings.

Again, the biggest strength of Uber, Lyft, and Instacart is that they are flexible, low-income jobs with a low entry barrier. But that can also be seen as a blemish. Independent contractors do not have the rights of fully-fledged employees, which means that the 15.8 million Americans who work full-time do not guarantee either a minimum wage or an employer-provided health insurance. You also have to pay all the social security and Medicare wage tax costs. Laws designed to protect low-income workers apply only to jobs, not to gigs where you technically "work for yourself," even if you drive only for Uber.

It's Not A Big Deal When You Work In a job like building or freelance writing, the skills you develop can lead to better opportunities and financial security. But it's a big deal to work full time on a low-income gig like Uber, which has no career opportunities. Understandably, some people get stuck in these jobs and feel exploited over time.

This is not the only issue that people have with the gig economy, but it's a common complaint that persists expressing the words "gig economy" in the news. And of course there is no easy solution. Modern taxi and delivery services depend on temporary work for their success, and some like to work in the system as it is.


All in all, the term "gig economy" refers to a general increase in temporary work with a particular focus on new low-income jobs such as driving for uber or shopping for instacart. These new jobs (and the gig economy as a whole) are often praised as a financial lifeline, but they are also routinely criticized as exploitative.


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