The Gig Economy: Pros, Cons, and Opportunities


by: Sarah Eller and Sana Johnson, 2017-2018 Work First Fellows


On July 18, 2017, the New York City Employment & Training Coalition hosted a Coalition Café in collaboration with the Samaschool, a non-profit organization that trains people in San Francisco and New York in navigating the gig-oriented economy that dominates the 21st Century American workforce.  The event was led by Jen Curry, New York City Director of the Samaschool, and focused on the pros, cons, and opportunities of the gig economy.


According to Harvard and Princeton economists Lawrence Katz and Alan Krueger, respectively, nearly all net job growth between 2005 and 2015 was in independent, or “gig” work. Over that same period, participation in this kind of work ballooned by 236 percent in New York City alone. The demand for nontraditional contract labor has exploded over the last decade and is projected to grow another 20 percent between now and 2020.


Why has participation in the gig economy increased so dramatically in recent years?


Many point to shifts in technology and increased internet accessibility as the main catalysts for this change. According to the Pew Research Center, a record 77 percent of Americans today own smartphones. These smartphones are equipped with the ability to connect users to a seemingly never-ending and always-growing sea of apps designed to match freelancers looking for gigs with employers looking to hire short-term. Apps like Uber allow average, everyday people with no commercial driving experience (except in NYC) to make money on the side without committing to a fixed schedule. Similar sites like connect babysitters, nannies, house cleaners, and senior care aides with local opportunities in an instant.


The economy has also played a major role in the observed increases in independent work. The Great Recession in 2008 and the years of slow progress that followed forced many who lost their full-time positions to seek out nontraditional employment opportunities. Working freelancing or gig jobs allowed many impacted by the economic recession to keep their heads above water.


The shift away from traditional nine-to-five work has been a welcome change for many. Nontraditional work provides instant gratification for tech-savvy smartphone users and flexibility in scheduling for those who need it. It also is a great source of supplemental income for even those people who have been able to hang on to their full-time jobs. And for people who work in seasonal job sectors, like retail and agriculture, gigs are great at filling in the gaps between steady work.


There are consequences of an economy dominated by gig work. For those working independently, income is never guaranteed, and for many, there can be long periods of time between payments. Where full-time work guarantees consistency and stability, gig work almost never does.


And unlike traditional, full-time workers, a very small portion of independent workers receive any form of work-related benefits. Take domestic workers, for example. A tiny fraction of all domestic workers, under 2 percent nationally, receive employment benefits. Only 4 percent receive employer-provided health insurance, and fewer than 9 percent work for employers who pay into Social Security. Around 65 percent do not have health insurance.


Workers engaging in the gig economy also expose themselves to high risk of discrimination. The worker protections embedded in Title VII of the Civil Rights Act do not apply to independent work, leaving these laborers less protected than traditional, full-time workers. Additionally, gig workers must develop a keen eye for spotting scams or misleading job posts.


There are also significant barriers to participation in the gig economy. Older people who lack technological literacy might have a harder time marketing themselves on digital platforms and accessing gig jobs. For those living in poverty, technology also presents a challenge. Things most of us now take for granted—smartphones, wi-fi, computers—are, of course, utilized only by those who can afford to pay for them. This population might also struggle with the financial structure of short-term work. The online platforms that support the gig economy use direct deposit as the main form of payment, excluding those without checking accounts.


Recent advances in workforce development have begun to mitigate some of these downsides and accessibility issues. Some innovative companies, such as the New York-based Managed by Q, have worked to stabilize the incomes of independent workers and provide benefits by employing these workers directly. In New York City, the “Freelance Isn’t Free” Act, FIFA for short, enhances freelance worker protections to include: the right to a written contract for work worth $800 or more, timely payment, and freedom from retaliation. Some states, including New York, California, and Washington, have also made legislative progress regarding portable benefits and worker protections.


To increase accessibility to gig work, new workforce development programs have adapted to account for the specific skill needs of independent workers. For example, The Chinese American Planning Council partnered with the Samaschool of New York to offer its clients training. Clients in this program can expect to take classes on leveraging gig platforms, customer service, financial management, trust and safety, and more.


Agencies that work with people on public assistance are now faced with the challenge of finding ways to integrate clients into this new economy. Some of the requirements to receive benefits might limit this population’s access to gig work. For example, if clients are spending upwards of 35 hours per week in an employment program, they are less able to commit time to gigs. Additionally, in order to work without losing their benefits, public assistance recipients must provide specific forms of employment verification that might not come with freelance work. Many of the long-term effects of the gig economy remain unknown, but all at the Coalition Cafe agreed that those working in workforce development must remain flexible to adapt to this growing sector.