People no longer place as much value on the relative security of a job that they enter as young adults and don’t leave until they are handed their requisite gold watch upon retirement. Freedom, autonomy and the ability to decide when you’ll work and what you’ll work on have taken the place of job security and earning a basic paycheck.
More and more workers are trading in their cubicles and corporate offices for a laptop at the beach or working in their living room while the family watches a movie. They are willing to do individual contract work for many different clients to make up the total income they formerly received from their 9-to-5 job.
Freelancing is well on the way to supplanting traditional full-time work. This new gig economy is supported by platforms that connect freelancers with clients who are looking for people to perform specific blocks of work, or gigs. Hence the label “gig economy,” came into being.
Even traditional employers are turning to the gig economy to accomplish specific jobs or projects, rather than hiring full time workers and paying their salaries, investing in their benefits packages, and funding their retirements.
Technological advances make the gig economy possible by enabling independent contractors to work from any location in the world where internet service is available. Collaborative teamwork is easy to arrange with various conferencing programs.
The Gig Economy: Big and Getting Bigger
- In 2015 the total number of U.S. freelancers had only increased 1.3% over the previous year, whereas there was a 4.2% increase in 2017, according to Wonolo.
- Freelance workers spent one billion hours a week freelancing in 2018, as compared to 72 million hours per week in 2015, as reported in a recent freelance industry report by Upwork.
- According to Forbes, the gig economy is growing at a rate that is three times faster than the entire U.S. workforce, combined.
- Gig work is a substantial source of income for around 40% of US workers, who are earning up to 40% of their income within the gig economy, according to PYMNTS.
- A study by MBO Partners revealed that full-time U.S. freelancers contributed $1.28 trillion to the U.S. economy during 2018.
- Based on figures provided by Wonolo, more than 50% of U.S. workers will participate in the gig economy by 2027.
Are Gig Economy Jobs Satisfying and Secure?
- According to a 2019 study conducted by MBO Partners, at least 50% of those freelancers working in the gig economy full-time feel more secure, financially, than those working traditional jobs.
- The number one reason, cited by 81% of full-time freelancers and 61% of part-time freelancers, for their decision to freelance was the ability to be their own boss, according to Statista.
- As reported by Upwork in its study on Freelancing in America, 51% of freelancers are so satisfied with their freelancing jobs that they would be unwilling to return to a traditional workplace for any amount of money.
- According to Upwork, 84% of freelancers are living the lives they want to live. Only 54% of those working for traditional employers feel this way.
- McKinsey reports that 78% of freelancers admit to being happier, while 68% feel healthier, than those working 9-to-5 jobs.
- Further, McKinsey reported that one in six traditional workers would like to join the gig economy themselves.
- McKinsey found that of all the categories of workers surveyed, those who had deliberately decided to join the gig economy were the most satisfied workers when it came to their working arrangements.
- Rowe Price Group reports that 26% of Millennials view freelancing as more financially secure than traditional employment.
- According to statistics gathered by Small Biz Labs, 64% of freelancers would choose to remain freelancers, with only 11% wanting to retreat into corporate America.
- According to Upwork, in 2014, 53% of freelancers deliberately chose to freelance. In 2018, that number had risen to 61%.
How Technology Supports the Gig Economy
Smartphone technology is used by 53% of young adults between the ages of 18 and 29 to find jobs, according to research conducted by the Federal Reserve Bank of St. Louis.
More than 75% of freelancers believe that gig platforms, such as Upwork, make it much easier for them to find their gigs.
In 2018, more than 50% of US freelancers used Facebook to promote themselves and their services, which increased from 38% in 2015, according to Payoneer.
The Gig Economy Goes Global
- Globally, freelancer pay rates average $19 per hour, according to a 2018 Payoneer income survey. Freelancer pay rates ranged from $11 to $28 per hour.
- There are 162 million workers across the U.S. and EU-15 countries that are working as freelancers, representing 20-30% of the workforce in these countries, per McKinsey.
- The UK freelancer population consists of 4.7 million workers. According to The Guardian, the UK’s gig economy has doubled in the years between 2016 and 2019.
The Future of the Gig Economy
Per Upwork, 42% of workers aged 18 through 34 are engaging in freelancing.
More than 80% of larger traditional employers in the U.S. will increase their use of freelancers in the future, according to Intuit.
By the year 2025, Millennials will comprise 75% of the global workforce, per Forbes.
Is the Gig Economy Here to Stay?
As all these statistics demonstrate, the gig economy is already having a significant impact on the U.S. economy. If the gig economy is meeting the needs of freelancers, and capable of providing cost benefits to traditional employers at the same time, it may come to pass that the gig economy will, one day, surpass the traditional job economy, and probably sooner rather than later.