How The Gig Economy Is Helping People To Get Ahead
The world is seeing a rise in membership in what is being called The Gig Economy. Also known as The Sharing Economy, The On-Demand Economy, The Peer Economy, and more, these terms describe the change brought about by digital technologies that allow customers, companies and workers to connect faster and more easily.
For example, just a few years ago a customer looking for a ride would either have to call a car company, or stand on the side of the road to hail a cab. Now they can open up an app on their phone, and a car will be there in minutes to pick them up, driven by someone working as an independent contractor. This is just one example of many of the new opportunities that have risen to create The Gig Economy.
Why Is It Called The Gig Economy?
A gig is a type of job that usually lasts for a specified amount of time. This could be the time it takes for you to design someone’s website, drive a client to their destination, or complete a performance. These jobs typically allow the workers to choose their own hours, making them perfect for people who want to earn extra money outside their primary job. However, many people earn a living solely through these jobs, and they are not restricted to only being on the side. There are now so many people performing these types of jobs either on the side or full-time, that a separate term was needed to describe the phenomenon – thus “The Gig Economy” was born.
The Gig Economy encompasses 3 main aspects – the companies, the customers, and the people performing the jobs. In today’s economy, more companies are using gigs as a part of their business plan, and more people are relying on gigs to earn a living. But how did we get here?
The Emergence Of The Gig Economy
Technological advancements played a large role in the emergence of The Gig Economy, with the Internet and smartphones making it easier to connect and find work. But it isn’t just the availability of technology that has allowed The Gig Economy to grow – it’s also some very real underlying problems in our economy. To understand why more and more people are turning to gigs as a major source of income, we need to look at the factors that led to gigs being necessary
The Rising Cost of A College Education
First up, we have the cost of going to college. The cost to attend a 4 year college has been on the rise for the past few decades. As you can see in the image below from College Board, the cost of a college education has practically tripled over the past 30 years. Combined with this is the almost necessity of a college education in order to get a well-paying job. To finance their college education, many students are forced to take out loans, which they must start paying back after they graduate. Unfortunately, not every graduate is able to get that well-paying job after graduation. Especially in recent years, finding a job right out of college has proven difficult, meaning graduates need to support themselves, and pay back their loans, on a salary that isn’t high enough.
Enter side jobs. Since working two jobs can make scheduling a nightmare, many have turned to jobs that allow them to pick their own hours. Now they can use their combined salary and money from gigs to pay back their loans, and to support themselves.
Licensing Laws Make It Harder To Get A Job
For those people looking to enter a profession that doesn’t require a college degree, there is another obstacle that they may face – licensing laws. Now, more than ever, many professions require that you get a license in order to work in that field. While this makes sense for jobs like accounting or medicine, the laws are increasingly spreading towards other professions like cosmetology or even landscaping. For instance, in New York, there are now 130 occupations that require a license.
What this means is that if a young person is looking to work right out of high school, their options have become more limited. According to FiveThirtyEight:
“Licensing rules are a particular problem for young workers trying to break into the job market, especially those without a college degree. The unemployment rate for adults ages 18 to 35 with neither a license nor a college degree was 9.9 percent in 2015; for those with a license (but still no degree), it was 5.2 percent.”
What this means is that if you are looking for a job without a college degree, your have limited options. If you are unable or unwilling to get a license, your options become further limited. Not only are jobs that require a degree out of reach, but now those that require a license are as well. This leaves plenty of people who want to work, but don’t have the time or resources available to go through addtional training or schooling.
Wages Are Stagnant
Finally, even for those people who are able to find a steady line of work, the money they earn from it won’t stretch as far as it used to. According to Pew Research “For most U.S. workers, real wages — that is, after inflation is taken into account — have been flat or even falling for decades, regardless of whether the economy has been adding or subtracting jobs.”
Not only have wages remained stagnant at best, but the cost of living has climbed. This article from Investopedia goes into more detail, but they ultimately conclude that “while the average person is still making the same amount of money when accounting for inflation, prices for many of the daily necessities have gone up considerably, which means that each dollar earned does, in fact, buy less than it did 20 years ago.”
People are earning as much as they always have been, but everything costs more now. What this means is that even if you are able to find a well-paying job, it may not be enough to support you.
Enter The Gig Economy
When you combine the difficulty of getting a well-paying job, with the fact that wages don’t go as far they used to, the result is a large section of the population who are struggling to get by, and willing to work odd-jobs. Hence the rise of The Gig Economy, in which side jobs and freelancing work have risen to great prominence.
Take a look at the following charts from Google Trends. They show a pretty clear increase in the number of searches for “the gig economy”, “side hustles” and “work from home jobs” over the past 13 years.
The increase likely comes both out of necessity, and because of the benefits that gigs can provide. For starters, if you are unable to find a job – whether it be because you don’t have a degree or the right license, not enough experience, or simply can’t find one – some side hustles require essentially no training or experience, allowing almost anyone to quickly get a job. For people who are struggling to find steady work, working gigs can be a great benefit to help keep you on your feet.
Some people already have jobs though, but are finding that they aren’t enough. For these people, a side gig is great because you typically can choose your own hours. For instance, if you work as a driver for Lyft, you can go to your day job, and work a few hours at night or on the weekends to earn a little extra money. A typical part-time job would dictate the hours you need to be in, and this is hard to do if you have another job, or family commitments.
Finally, performing gigs allows you to be your own boss. If you spend all day answering to someone else, you might not want to go to another job where you have to do the same thing. Or perhaps you spent years under a bad boss, and don’t want to deal with it again. There is a certain level of freedom that comes with working gigs, and is a major attraction for many people entering into The Gig Economy.
If you’re interested in some more reasons to consider adding a side hustle or working gigs, you can check out this article from AOL.
The Gig Economy Isn’t For Everyone
All that being said, The Gig Economy may not be right for you. There are some drawbacks to be aware of before you quit your job, or decide your future lies in performing gigs. The most obvious drawback is that the work can be uncertain. Since you are not being hired by a company long-term, you never know when you will be able to find work. This adds a level of uncertainty to your financial situation, making it hard to rely on gigs for the long-term.
You also don’t get many benefits when you work gigs. Working for a major company can provide you with things like health insurance, and retirement funds, neither of which you’ll find when working gigs. You need to fund these things yourself, which is an added cost to consider when you start performing gigs.
Finally, we said you have more freedom when you’re working gigs, but you also have more responsibility. You have to handle all of your own finances, including paying taxes on your earnings, and in some instances learn to do things like how to market yourself. If you get sick and are unable to work, you don’t get paid. If you’re a ride-share driver and your car breaks down, you don’t get paid. There is less protection for you when you rely solely on gigs, so think carefully before diving in. It’s for this reason that many people choose to perform gigs on the side – reaping the benefits of a steady income from their full-time job, but improving their financial situation with extra cash on the side.
How To Start Performing Gigs
If you read all of this, and decided that entering The Gig Economy is the best move for you, there are a few ways to start. First, you should figure out what your skills are, and what resources you have available to you. Do you like to drive? Are you a good writer? How do you feel about manual labor? Do you have access to a computer that you could do work on? Before looking for gigs, it’s a good idea to know what kind of work you’d like to do.
After that, there’s no one set way to join in The Gig Economy. For instance, people who want to make money driving could sign up for a company like Lyft or Uber, and begin making money that way. Other people might prefer to deliver packages rather than people, so they might sign up for Amazon’s Flex Service.
Another way to find gigs is through freelancing websites. For example, you could join a site like Upwork, create a profile that lists your skills, and then begin applying for job postings related to the work you want to do.
Another option is you could start looking through the jobs section of your local newspaper or Craigslist. Often companies are looking for temporary help, and will post their information in the paper or on Craigslist. You can find plenty of gigs this way, just be careful that they company you are going to work with is legit.
Finally, if you have a certain skill that you want to use – for example, web design or carpentry – you could advertise yourself, building a website or placing ads in a local newspaper. Many people have successfully turned their hobbies into steady streams of income on the side or full-time, and there is no reason you can’t be next.
If you’re not sure where to start, Forbes compiled a list of 10 great gig jobs for 2017. Some of the gigs include truck driver, multimedia artist, carpenter, and accountant, showing that there are a wide range of possibilities.
Is The Gig Economy The Way Of The Future?
More and more people are turning to gigs as either supplementary income, or as their primary source of money. If this trend were to continue, it wouldn’t be long before a majority of the workforce is primarily gigs. Whether this is good or bad is up for debate, but the takeaway is that if you want to start performing gigs, there’s no better time than now.
The Internet and mobile applications have made it easier than ever to not only find gigs, but to manage them as well. Lyft wouldn’t exist if it wasn’t for smartphones, and multimedia designers would have a much harder time finding clients if it wasn’t for the Internet. Technology makes The Gig Economy possible, while other outside factors make it necessary.
Even if The Gig Economy isn’t right for you, it has shown to be a great option for many. If you’re in need of work, and desire either flexibility, independence, or simply a job without a lot of requirements, then jumping into the gig economy is worth considering.