- Nearly 100 million Americans could be working in the gig economy by 2027.
- While it offers a flexible way to make money, experts say relying on it can be dangerous.
- Inconsistent pay and unpredictable algorithms can leave some workers disappointed.
Americans are flocking to gig economy You need extra cash, but it doesn’t work for everyone.
It is unclear how many people are working delivery driverbabysitter, reseller, freelance writeror one of many other gig jobs, experts told Business Insider that number is growing and there are no signs of the number slowing down.
These workers are likely happy to have extra income in their bank accounts, but the gig economy may not be the solution to people’s finances as some think. .Because it may involve gig work unpredictable salary It’s at the mercy of customer demand, labor supply, and secretive company algorithms.
The gig economy is an approximately $1 trillion industry in the United States. According to research This book was written by Robert Peterson, John T. Stewart III Centennial Professor of Business Administration at the University of Texas at Austin, and John Fleming, author of The Ultimate Gig: Flexibility, Freedom, and Pay. Published earlier this year. According to their research, economic growth is expected to be between 16% and 17% annually, four times faster than traditional economies. The study predicts that by 2027, nearly 100 million Americans, or about 40% of the population, will be affected. adult population — Participate in the gig economy full-time or part-time.
“The economy has changed a lot. People used to drive nine hours for Uber just to get $100 to go to a bar with friends this weekend.” said Charles Rosenblatt, president of supporting fintech company PayQuicker. To gig workers. he told Business Insider. “My electricity bill is going up and I don’t have the money to pay anymore, so I need to supplement my income in other ways, so I’m going to get into the car.”
Business Insider spoke to experts about the current state of the U.S. gig economy, where it’s headed, and what people need to know before jumping in.
Advantages of gig work
Gig workers from all walks of life looking to have Increased flexibility, diversify your sources of income, meet new people and explore your interests in your free time. However, many who have replaced their office jobs with various gig jobs still do not understand how to make it work. Many people start gig work thinking they can make a living with one or two gigs, but struggle to earn enough to pay their bills and plan for the future. Masu.
According to research, 60% of gig workers work multiple gigs, 23% work three or more gigs, and spend about 4 to 8 hours a week on the job. Furthermore, less than 10% of gig workers earn more than $2,000 per month.
“Most people are thinking about how they can do better. make use of your time” Fleming told BI, referring to gig workers.
“Home always wins”
Alexandria Ravenel, an assistant professor of sociology at the University of North Carolina, told Business Insider that some gig workers don’t realize how little they earn. Calculating true profits can be difficult for gig workers, especially ride-hailing and delivery drivers.
When Ravenel talks to students who work as gig drivers, they typically don’t realize how little money they take home when you add up expenses like gas, depreciation, maintenance, and insurance. , he said. Vehicle costs Gig drivers previously told Business Insider that wages can range from $4 to $8 an hour. hourly wage The lowest is $9-12 per hour and the highest is $23-28 per hour.
“I end up pointing out that, frankly, they would be better off working at McDonald’s,” Ravenel said.
In addition to wage uncertainty, gig workers may face fluctuations in customer demand, competition, and even adjustments to platform algorithms that could change the rules of the game. That’s why gig workers should be careful not to become too dependent on a single platform, experts told Business Insider.
“When it comes to the gig economy, the house always wins,” Ravenel said. “You might think you’re making a lot of money, but at some point you’re going to run into trouble. You’re going to get deactivated from that platform, you’re going to be moved to the back of the queue, you’re facing repercussions. This is due to a change in the algorithm. ”
About 43% of gig workers surveyed by Peterson and Fleming said less than 10% of their annual household income came from gig work.
Workers also more strategic Rather than being satisfied with one or two jobs, Rosenblatt talked about looking for opportunities, especially those that offer the possibility of advancement or better pay or bonuses. This may involve taking on gig work at traditional companies. Fleming estimates that more than 50% of traditional businesses employ gig workers.
Peterson told BI that as the gig economy grows, it’s becoming increasingly unclear who will train these workers. For example, many companies aren’t willing to invest time and resources into training workers who work only eight hours a week, and universities often don’t teach students how best to navigate gig work, Fleming said. Ta.
Instead of training and tracking external employees, Peterson expects more companies to deploy in-house talent platforms to let employees bid on work and earn extra income. said. This could reduce the number of gig employees working in more traditional fields.
Still, such changes in the gig economy could further push workers to build their own brands and products, Rosenblatt said.
Where is gig work heading?
Experts Business Insider spoke to said they expect more people to have three to five jobs that touch their passions. For example, he doesn’t have to work 40 hours a week at a ride-hailing company. He can devote 10 hours to that and his remaining 30 hours to writing, photography, and real estate.
“Part of it is income, but part of it is basically people taking control of their own lives,” Rosenblatt said. “It’s much easier for someone to work an extra 10 hours driving for Uber or DoorDash or selling Tupperware than it is to go to their boss and ask for a 20% raise to support their family.”
Additionally, people are increasingly seeking gig work for immediate pay, Rosenblatt said. Some 83% of gig workers surveyed said it was important to them to be compensated immediately for their performance when looking for a new job, the report found.
Mr. Rosenblatt is looking forward to affiliate sales, etc. influencerThe number of jobs that can be done from home will increase in the coming years, coupled with a shift away from one-off jobs such as delivery driving, which require additional costs such as vehicle maintenance. He also expects direct sales to increase, whether it’s coffee or CBD.
“I don’t think gig work is going away,” Ravanel says. “I see it continuing to grow, and I see it continuing to grow, and I think it’s going to be very important to society in terms of ensuring that workers have financial security and access to benefits if they’re only earning income from 1099 jobs.” I think we need to seriously reconsider our strategy.”
Are you struggling to navigate the gig economy? Or are you successfully navigating it? To contact these reporters, contact: nsheid lower@businessinsider.com and jzikula@businessinsider.com.
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