Just as there is not one typical independent worker or one typical job, there is not one way to characterize the experience of participating in the gig economy. Diversity of experiences is a central theme of independent work.
Most gig workers report being satisfied by their work arrangements
Across surveys, more than two thirds of independent workers report being satisfied with their work arrangements.123 Many report appreciating the control this work allows them over their time and the flexibility of scheduling.4 In addition, many root their satisfaction in the income their independent work provides. In many cases, gig work smooths unstable earnings from a traditional job.5 In others, people turn to gig work to deal with financial hardships,6 or simply to meet basic needs and pay the bills.7 Others use their gig earnings for traveling or other discretionary expenses.8 Another desirable aspect can be these arrangements’ low barrier to entry. Some forms of independent work are accessible for workers who may otherwise struggle to enter the labor market, including immigrant and formerly incarcerated populations.9
When asked, survey respondents tend to say they pursue independent work out of choice rather than out of necessity.10 Looking at levels of satisfaction and perceived advantages and challenges, though, gives better insight into the experiences of this work than asking about motivations, since people are likely to describe their circumstances as the result of choice regardless of financial or other pressures that influence them.11
- 1. In MBO Partners’ survey, 72 percent of Full-Time Independents reported satisfaction with independent arrangements. MBO Partners, “The State of Independence in America” (Herndon, VA: 2018), https://www.mbopartners.com/state-of-independence. More information about this and subsequent studies can be found in the Research section of the Data Hub.
- 2. On FreshBooks’ survey, 71 percent of respondents reported satisfaction with independent arrangements. FreshBooks, “Second Annual Self-Employment Report” (Toronto, ON: 2018), https://www.freshbooks.com/_themes/freshbooks/brand-assets/2018selfemploymentreport.pdf.
- 3. On Intuit’s survey, 67 percent of respondents reported satisfaction with gig economy work. Emergent Research, “Dispatches From the New Economy: The On-Demand Workforce” (Mountain View, CA: Intuit, 2017), https://www.slideshare.net/IntuitInc/dispatches-from-the-new-economy-the-ondemand-workforce-72248688.
- 4. Prudential, “Gig Workers in America – Profiles, Mindsets, and Financial Wellness” (Newark, NJ: 2017), https://www.prudential.com/media/managed/documents/rp/Gig_Economy_Whitepaper.pdf; Edelman Intelligence, “Freelancing in America: 2017,” (New York: Upwork and Freelancers Union, 2017), https://www.upwork.com/i/freelancing-in-america/2017/; Hyperwallet, “The Future of Gig Work is Female” (San Francisco: 2017), https://www.hyperwallet.com/resources/ecommerce-marketplaces/the-future-of-gig-work-is-female/; Emergent Research, “Dispatches From the New Economy.”
- 5. Farrell, Diana and Fiona Greig, “Paychecks, Paydays, and the Online Platform Economy: Big Data on Income Volatility” (New York: JPMorgan Chase Institute, 2016), https://www.jpmorganchase.com/corporate/institute/document/jpmc-institute-volatility-2-report.pdf; Koustas, Dmitri, "Consumption Insurance and Multiple Jobs: Evidence from Rideshare Drivers," Job Market Paper (Berkeley, CA: University of California, January 2018).
- 6. One in 5 gig workers report turning to gig work in times of financial hardship. Emergent Research, “Dispatches From the New Economy.”
- 7. Smith, Aaron, “Gig Work, Online Selling and Home Sharing” (Washington, DC: Pew Research Center, 2016), http://www.pewinternet.org/2016/11/17/gig-work-online-selling-and-home-sharing/; Prudential, “Gig Workers in America.”
- 8. Edelman Intelligence, “Freelancing in America.” See also Lueck Avery, Miriam, Cindy Baskin, Rod Falcon, Eri Gentry, Alex Goldman, Ben Hamamoto, Sara Skvirsky, and Kathi Vian, "Voices of Workable Futures: People Transforming Work in the Platform Economy" (Palo Alto, CA: Institute for the Future, 2016), http://www.iftf.org/voices/.
- 9. See Dokko, Jane, Megan Mumford, and Diane Whitmore Schanzenbach, "Workers and the online gig economy" (Washington, DC: Hamilton Project at the Brookings Institution, 2015), http://www.hamiltonproject.org/assets/files/workers_and_the_online_gig_economy.pdf.
- 10. Manyika, James, Susan Lund, Jacques Bughin, Kelsey Robinson, Jan Mischke, and Deepa Mahajan, “Independent Work: Choice, Necessity, and the Gig Economy” (Washington, DC: McKinsey Global Institute, 2016), http://www.mckinsey.com/global-themes/employment-and-growth/independent-work-choice-necessity-and-the-gig-economy; MBO Partners, “The State of Independence;” Edelman Intelligence, “Freelancing in America.”
- 11. See, for example, social theorist Pierre Bourdieu’s discussion of making a choice of necessity. Bourdieu, Pierre, "Distinction: A Social Critique of the Judgment of Taste" (Cambridge, MA: Harvard University Press, 1984).
Financial volatility and access to benefits are major challenges
Although many independent workers find satisfaction, they also face real challenges. Most pronounced is the lack of consistent, predictable earnings, reported as a major concern among gig workers across surveys.1 The difficulty in predicting earnings results in both economic and psychological stress; gig workers report higher levels of anxiety than traditional workers.2
Another challenge faced by independent workers is their lack of access to benefits, including health insurance and retirement plans. Workers in alternative arrangements are less likely than traditional employees to receive health insurance from their employer, and to have health insurance at all. On the most recent BLS Contingent Worker Supplement, 84 percent of traditional workers were covered, with more than half receiving insurance from their employer. Among temp-agency workers, only 67 percent had coverage, and only 12 percent received insurance from an employer. Among independent contractors, 75 percent had coverage, all of whom had to access that insurance on their own.3
Most of those who are left uninsured by work find coverage through the Affordable Care Act marketplace, meaning this exchange is particularly valuable among this population—independent workers are more than three times more likely than traditional employees to rely on the marketplace, and online platform workers are almost four times more likely.4 Despite increased access to healthcare through ACA, as many as a quarter of independent workers report forgoing medical treatment because of high costs.5
Even fewer are able to access retirement plans. Only 7 percent of temp-agency workers, 30 percent of on-call workers, and 38 percent of contract-company workers can access employer-sponsored retirement, compared with 46 percent of traditional employees.6 Concerns over benefits are most pressing for workers who rely on gig work for their primary earnings, since side gig workers may still access benefits through a traditional job.
Independent workers are not alone, though, in their concerns about work-related benefits. Traditional workers also report this being a major area of concern.7 Over the past thirty years, the provision of employer-sponsored retirement and health insurance has decreased across employers, especially those in the service sector.8 Although the challenge of securing benefits is particularly acute for independent workers, it is not unique to them.
- 1. Prudential, “Gig Workers in America;” Edelman Intelligence, “Freelancing in America;” MBO Partners, “The State of Independence;” Emergent Research, “Dispatches From the New Economy;” Hyperwallet, “The Future of Gig Work is Female.”
- 2. 41.18 percent of gig workers report anxiety, compared with 32.66 percent of full-time workers. Hartman, Mitchell, "What makes gig economy workers anxious?" (Los Angeles: Marketplace, 2018), https://www.marketplace.org/2018/03/08/economy/anxiety-index/gig-workers-and-economically-anxious-lifestyle.
- 3. U.S. Bureau of Labor Statistics, “Contingent and Alternative Employment Arrangements – May 2017” (Washington, DC: U.S. Department of Labor, 2018), https://www.bls.gov/news.release/pdf/conemp.pdf." See also Larrimore et al., "Report on the Economic Well-Being of U.S. Households" (Washington, DC: Board of Governors of the Federal Reserve System, 2018), https://www.federalreserve.gov/publications/files/2017-report-economic-well-being-us-households-201805.pdf; Prudential, “Gig Workers in America."
- 4. Jackson, Emilie, Adam Looney, and Shanthi Ramnath, "The Rise of Alternative Work Arrangements: Evidence and Implications for Tax Filing and Benefit Coverage" (Washington, DC: U.S. Department of Treasury Office of Tax Analysis, 2017), https://www.treasury.gov/resource-center/tax-policy/tax-analysis/Documents/WP-114.pdf.
- 5. 26 percent of surveyed gig workers forewent medical care due to high costs. Emergent Research, “Dispatches From the New Economy.” 37 percent of surveyed, insured gig workers forewent medical care due to high costs. Zulliger, Laura, "Health Coverage in the Gig Economy" (San Francisco: Stride Health, 2016), http://blog.stridehealth.com/post/health-coverage-gig-economy.
- 6. U.S. Bureau of Labor Statistics, “Contingent and Alternative Employment Arrangements – May 2017." See also Larrimore et al., "Report on the Economic Well-Being of U.S. Households."
- 7. Edelman Intelligence, “Freelancing in America.”
- 8. Fligstein, Neil and Taek-Jin Shin. "The Shareholder Value Society: A Review of the Changes in Working Conditions and Inequality in the United States, 1976 to 2000," in Social Inequality, ed. Kathryn Neckerman. (New York: Russell Sage, 2004); Bivens, Josh, Elise Gould, Lawrence Mishel, and Heidi Shierholz, "Raising America’s Pay: Why It’s Our Central Economic Policy Challenge" (Washington, DC: Economic Policy Institute, 2014), https://www.epi.org/publication/raising-americas-pay/.
The experiences of gig workers are polarized
Advantages and challenges of gig work are not evenly distributed. Work that some turn to in order to smooth out or supplement their income is the source of high financial volatility for others. What brings flexibility and freedom for some brings instability and insecurity for others. The experiences of independent workers are polarized, presenting real challenges to some workers while offering great opportunities to others. These differences in experience are inextricable from the way we think about the gig economy. The needs of a supplemental high-skill freelancer are different than the needs of a full-time subcontracted employee, and addressing the challenges faced by independent workers means paying attention to this diversity of experience. Researchers need to further explore the differentiation of experiences of independent workers in order to better understand the range of needs of this population.