Headlines from mainstream news outlets are reporting that today’s Labor Department report on Contingent and Alternative Employment Arrangements shows that the gig economy is shrinking. “The gig economy is actually smaller than it used to be,” says Marketwatch. From the Washington Post: “There’s a smaller share of workers in the gig economy today than before Uber existed.” From the Los Angeles Times: “Share of Americans working as independent contractors dips.” And most dramatically from Quartz Media: “Everything we thought we knew about the gig economy is wrong.”
The explosion of freelance work has changed the economy in a number of significant ways. After all, by some accounts, 43 percent of U.S. workers will have some involvement in the gig economy by as early as 2020. Of the major industries being impacted, the mortgage lending business seems ripe for drastic changes to longstanding lending guidelines.
When you last heard from me regarding the state of the gig economy, the discussion at the beginning of 2018 focused on the fact that small businesses were joining large corporations in embracing the on-demand model. Now, let’s shift focus from the “who” to the “where” and the “what.”
How much has the gig economy changed in the last 13 years? We’re (finally) about to find out. According to Tyrone Richardson at Bloomberg Law, the United States Department of Labor’s Bureau of Labor Statistics (BLS) is scheduled to release a report on “contingent and alternative employment arrangements” on June 7, 2018. To put in context how much things have changed since the last time the BLS released such a report—February 2005—that was the same year Destiny’s Child split up and two years before the first iPhone was released. Many of these on-call workers and independent contractors are not included in the BLS’s monthly jobs report despite studies that suggest these types of “alternative” arrangements accounted for 94 percent of net employment growth in the U.S. economy over the last decade.
According to a recently released study by American Express and Institutional Investor, we can expect to see a slight increase in the use of freelancers and contract workers in the year ahead.
The gig economy continues to be a popular topic of discussion—for policymakers, politicians, lawyers, the media, and others. However, getting a good handle on the scope of the gig economy can be difficult at best. Traditional labor market data has not kept pace with new trends in the economy. As a result, getting good, hard demographic data can be challenging.
The federal government has not meaningfully measured the contingent workforce since 2005. However, two economists, Lawrence Katz (Harvard) and Alan Krueger (Princeton), conducted a 2015 survey that is currently acknowledged as the best available measurement of the contingent workforce to date. And when Monique Morrissey, an Economist with the Economic Policy Institute, testified before the U.S. Senate Health, Education, Labor & Pensions Subcommittee early last month, she cited some data from this study.
The Aspen Institute’s Future of Work Initiative has partnered with Cornell University’s School of Industrial and Labor Relations (ILR) to introduce the “Gig Economy Data Hub.” Set to launch this spring, the database aims to serve as a comprehensive source of the knowns and unknowns of the gig economy.
According to a report in today’s Washington Examiner, we may be on the verge of getting some hard data that would show just exactly how big the gig economy really is. Reporter Sean Higgins says that the Bureau of Labor Statistics will publish the latest edition of its Contingent Worker Survey this spring that will offer new data on workers doing short-term, non-salaried gigs. An anonymous source in the Labor Department said the study probably will be published in April, according to Higgins.
Last week was a big week when it comes to shining the spotlight on sexual harassment in the gig economy arena. On Thursday, Nathan Heller wrote a piece for the New Yorker that garnered a lot of attention entitled, “The Gig Economy Is Especially Susceptible to Sexual Harassment.” The premise of the article is that freelance workers of all stripes outside the sphere of protection that typically covers W-2 employees, noting that human resources departments, collective bargaining, and federal and state laws cannot offer coverage over most independent contractors. Because of that, Heller writes, “freelance workers are highly vulnerable [to sexual harassment]. They have little institutional support and few, if any, supervisors. They are transient and easily replaceable as well. Those who gig with algorithmic ratings systems must stay on the good side of capricious clients. Others, who depend on word-of-mouth referrals, are obliged to embrace any gift horses that come.”