Two Cents: How long will the gig economy last?

I, myself, admit to getting excited about the gig economy, and how we could all be working remotely as freelancers and contractors, changing the face of the modern workplace. The gig economy promises to be the bright new future of employment.

But new research and data shows we may have been jumping the gun a little, and that gig workers have declined, and would rather be working in traditional roles anyhow. The risk is that the gig economy may never actually grow any bigger.

New data from the U.S, where the concept of the gig economy first originated, shows that there are relatively few individuals work as independent contractors, especially on electronic platforms like Uber. And those who are classified as independent contractors (gig workers), don’t earn that much from it. In fact, less than half of them earned more than US$2,500 (S$3,455). After all, selling your unwanted stuff on eBay puts you into the gig worker bracket.

There’s not much evidence to support the argument that gig work replaces regular 9-to-5 employment. Instead it seems to be something people do to earn some extra cash alongside their normal job. So if anything, it’s a ‘’side gig’’ economy, not a gig economy. This may come as a disappointment to millions of people who were hoping to ditch their full-time role and join the gig economy. But it won’t stop musicians, photographers, writers and truck drivers for example continuing to ply their trade. It’s just that the gig economy is probably unlikely to become mainstream enough to juts be called ‘’the economy’’.

The gig economy concept started gaining serious traction soon after the global financial crisis of 2008/9. People started freelancing and contracting their services out after they’d lost their jobs. The deep recession that followed meant there were far fewer jobs than before, so gigging was the next best thing while they looked for a full-time role. So it was more of a transitional labour market, not a permanent fixture, that popped up in a time of economic uncertainty.

The debate is whether people don’t actually choose to be part of the gig economy, but just do it until something better comes along (a full-time job). Have we fooled ourselves into believing this was the future of working, and that trendy millennials prefer this flexible way? Some employers may have encouraged gig working as it means lower overheads from having a permanent workforce, and they avoid paying for perks like healthcare and holidays. In other words, moving the risk away from the organisation and onto the worker.

This doesn’t mean the gig economy is going to disappear. There are still lots of platforms linking employers with workers on a causal basis. Only this week, Uber launched Uber Work to do this very thing. It’s just that we need to put things in perspective, a bit like our views on automation and robots replacing our jobs. The gig economy won’t actually replace the traditional labour market, but will exist as an alternative/supplementary labour pool. So this means more choice for employers and workers, which can only be a good thing right?