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Is the Gig Economy Actually Shrinking?

The gig economy has been heavily discussed in the media and in employment circles for several years now. Essentially, it involves the less-formal employment or contractor relationships between workers and companies, with workers typically working temporarily for one or multiple employers at a time with greater flexibility and independence.

gig

Source: Stas_V / iStock / Getty

Key examples include driving for companies like Lyft or Uber; performing services to other individuals, such as dog walking or house-sitting; or working as a freelancer for companies in roles like a content provider, graphic designer, or even as a temporary general laborer.

Are Gig Worker Predictions Overblown?

Some experts have seen the gig economy as the future of the labor market, predicting that more and more employment arrangements will be handled through the gig economy, ushering in a fundamental transformation in our overall economy.

Well, it may be that those predictions were overblown or even flat out wrong. New data from the Department of Labor (DOL) shows that the number of jobs in the gig economy shrank between 2005 and 2017.

“According to the Department of Labor, the overall gig workforce totaled 10.1 percent in May 2017 (the month the survey was conducted, although the data was just released …),” writes Richard Meneghello in an article for Fisher Phillips reporting on the DOL report.

The last time the survey was conducted was in 2005. At that time, the tally of those in the gig economy was 10.7%. According to Meneghello:
“Those who characterized themselves as independent contractors shrunk from 7.4 percent in 2005 to 6.9 percent in 2017.”

Certainly, this is a shift that was unexpected. And, in fact, despite ongoing and widespread reports of a burgeoning gig economy, it’s a particularly curious statistic.

Meneghello says: “[M]ost observers believed that today’s report would present a picture of a robust and blossoming industry of side hustlers and gig workers, the numbers exploding off the page. Instead, this report presents the image of a stagnant and shrinking workforce, demonstrating that the gig economy isn’t quite as important as we all thought it was.”

It may be too early to draw any definite conclusions from this study. As Meneghello writes, many critics have been quick to question the integrity of the data and, consequently, the validity of the study.

It may take additional data and studies to determine whether assumptions of the gig economy representing the wave of the future are accurate, overblown, or just wrong.