The nature of work arrangements is in flux. Although we lack large-scale, consistent data on independent work arrangements, over the past two decades, the number of people engaged in independent work in some capacity has increased across most measures.1
Continued technological advancement holds the potential to facilitate increases in independent work. Online platform technology has made new forms of independent work possible, and as this and related technologies develop, they are likely to continue to shape the workforce and contribute to the changes to the gig economy.
Perhaps most significantly, the advent of gig work is not an isolated trend, but one related to broad shifts in the economy. Globalization and technological advances put pressure on companies to react quickly to market changes. Securing labor through independent arrangements facilitates these quick responses, allowing firms to quickly adapt the size of their workforce. Some have noted that this can allow companies to increase their short-term shareholder profits.2 Seen in this light, independent work is a fundamental component of today’s economy, and so is unlikely to dissipate soon.
However, there are also reasons to be cautious in making forecasts. If recent changes have told us anything with certainty, it’s that predicting the future is risky business. The recently released Contingent Worker Supplement shows that the number of people relying on alternative work arrangements for their main job has remained stable over the past twenty years. Gig work, especially online platform work, has high turnover. By some measures, rates of growth in platform work have started to slow, potentially approaching a point of saturation in which there are fewer new entrants.3 In fact, current growth rates are unsustainable; if the observed growth of Uber drivers continued unabated, every American worker would be an Uber driver in five years.4
- 1. Edelman Intelligence, “Freelancing in America: 2017,” (New York: Upwork and Freelancers Union, 2017), https://www.upwork.com/i/freelancing-in-america/2017/; MBO Partners, “The State of Independence in America” (Herndon, VA: 2017), https://www.mbopartners.com/state-of-independence. More information about each of these studies in the Research section of the Data Hub.
- 2. For a more thorough discussion of these trends, see Weil, David, The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It (Cambridge, MA: Harvard University Press, 2014); Fligstein, Neil, and Taekjin Shin, "Shareholder Value and the Transformation of the U.S. Economy, 1984–2000," in Sociological Forum (New York: Russell Sage, October 2007); Kalleberg, Arne, Good Jobs, Bad Jobs: The Rise of Polarized and Precarious Employment Systems in the United States 1970s to 2000s (Washington, DC: American Sociological Association, 2011).
- 3. Farrell, Diana and Fiona Greig, “The Online Platform Economy: Has Growth Peaked?” (New York: JPMorgan Chase Institute, 2016), https://www.jpmorganchase.com/corporate/institute/document/jpmc-institute-online-platform-econ-brief.pdf.
- 4. Hall, Jonathan, and Alan Krueger, "An Analysis of the Labor Market for Uber's Driver-Partners in the United States," Working Paper 22843 (Cambridge, MA: National Bureau of Economic Research, November 2016), http://www.nber.org/papers/w22843.
We need new and better data to think about the future of work
The independent workforce is central to today’s economy. Regardless of discrepancies between measures and predictions for the future, the gig economy represents a fundamental shift in the way work is being performed and the relationship between workers and companies. Workers are increasingly being asked to take on responsibility for their economic security, as companies strive to react quickly to market conditions and pressures.
The most important tool that we need to better forecast future trends in independent work will be continued and expanded data collection and analysis. As work arrangements change, concepts we rely on—jobs, employers, wages—will take on new meanings. As the labor market and the world change, we need ongoing, thoughtful data collection and analysis to better understand today’s workers and their needs.