Today, the gig economy is all the rage, with more millennials opting for short-term “gigs” rather than long-term permanent work contracts. Also sometimes referred to as the freelance economy, the gig economy can be summarised as “an economy in which temporary, flexible jobs are commonplace, and companies tend toward hiring independent contractors and freelancers instead of full-time employees.” Freelancers, independent contractors, and people who take up a variety of small jobs are all part of the gig economy.
With experts predicting that remote employees will constitute 50 percent of the workforce by 2020, the socioeconomic repercussions of this non-traditional work lifestyle need to be considered. From a numbers standpoint, the gig economy seems to be thriving. Popular freelance pioneers like Uber that provide effective on-demand services enjoy valuations of $40 billion or more, and Airbnb’s business model has won the praise of many, thereby validating an emerging freelance ideology. Especially with more millennials entering the workforce, it’s reasonable to assume a near future in which freelancers will outweigh permanent contract workers in terms of numbers.
Unfortunately, today’s political and economic climate doesn’t seem poised for the needs of the gig economy. Most freelancers, for example, lack traditional employee benefits. Thus, they are forced to arrange benefits like health insurance independently. While the Affordable Care Act can help with this, the turmoil surrounding the healthcare issues in the Trump-era threaten the sanctity of affordable and independently sourced healthcare.
Given the unforgiving realities of today’s economic environment, those in the freelance economy often struggle to get by. From small issues such as filing freelancer taxes to larger concerns like income inequality, there is a lot the gig economy continues to grapple with. A growing gig economy means a constant state of unstable income, adding more uncertainty to the economy. Economic inequality in the United States already is extremely high, with the elite 2 percent owning almost 80 percent of everything. In fact, a POLITICO poll showed that more than 64 percent of people felt that
The country was “out of control” and only 36 percent thought the US was in a “good position to meet its economic and national security challenges.” Fluctuating and stilted flows of income as a result of freelance gigs could serve to fuel this inequality even further and worsen these statistics.
Another social factor that sadly still plagues society today is discrimination based on race, gender, or religion. The freelance economy might not have a solution to this, considering the loose guidelines and flexibility that are essential to the idea of itself. For example, Uber is disrupting taxi industries largely populated by drivers of color: 32 percent of taxi drivers are Black, but less than 20 percent of Uber drivers are the same, compared to more than 40 percent who are white.
While this isn’t directly indicative of discrimination while hiring, it does highlight the fact that companies that rely on independent contractors or freelancers as their mode of operation do have the ability (and sometimes more incentive) to neglect workers rights, especially in comparison to companies that hire for more permanent positions. Minority communities are thus put to disadvantage, with only vague workers protection within this sort of freelance economy. In bigger organizations with more permanent roles, workers seem to have more protection from discrimination on an administrative level.
While the gig economy seems appealing in terms of the flexibility and freedom it provides, its broader potential consequences should be considered. Doing so allows regulations to be put into place that will prevent any unwanted backlash.
Akshata Mehta has a passion for traveling and exploring the world. She in very interested in entrepreneurship and sustainability in everyday life. Being a foodie, she spends a good amount of time cooking up concoctions in her kitchen, recording her recipes and travel adventures on her blog, With Love From Akshata.