As We Race Toward 2020, it’s Time to Ask – Are Gigs the New Jobs? | DCR Workforce Blog

As We Race Toward 2020, it’s Time to Ask – Are Gigs the New Jobs?

In a recent post, we’ve discussed research by Ivy League professors who crunched numbers to show that all the job growth in the U.S. can be explained by the growth in gigs and not jobs! So at first glance, it does look like the answer to the question “Are gigs the new jobs?” must be a resounding “Yes!” But when you deconstruct it and look at all the factors, is that too simplistic a deduction?

The 2020 prediction

It’s been predicted and reiterated numerous times, our blog included, that gigs will make up nearly half the workforce by the year 2020.

If we look at current trends in 2016, we see that businesses are still hiring permanent employees. Some workers are walking away from their current jobs to find new ones, some are being laid off and others are turning entrepreneurial to start their own businesses or become independent contractors. At the same time, some workers are retiring and new-to-the-market workers are joining in.

In all this activity, it’s truly difficult to determine the exact state of affairs. But let’s give it a try to see why alternative work arrangements may make up most of the new “jobs.”

Alternative work arrangements – Facts and stats

Alternative work arrangements may involve temporary help agency workers, on-call workers, contract workers and independent contractors or freelancers. Here’s a quick look at some stats:

  • Their number rose from 10.1% in February 2005 to 15.8% in late 2015.
  • The percentage of workers hired out through contract companies showed the sharpest rise increasing from 0.6% in 2005 to 3.1% in 2015.
  • Workers providing services through online intermediaries, such as Uber or Task Rabbit, accounted for 0.5% of all workers in 2015.
  • The online gig workforce is relatively small compared to other forms of alternative work arrangements, although it’s growing rapidly.
  • Workers selling goods or services directly to customers reported finding more customers through offline intermediaries than through online intermediaries.
  • A substantial number of the alternative work arrangements for U.S. workers from 2005 to 2015, happened through contract staffing firms.
  • All four categories of nonstandard work increased from 2005 to 2015. Independent contractors continue to hold distinction as the largest group (8.9% in 2015).
  • Share of workers in the other categories more than doubled from 3.2% in 2005 to 7.3% in 2015.
  • The fastest growing category of nonstandard work involves contracted workers.
  • The number of workers who are self-employed independent contractor/consultant or a freelance worker went from 6.9% in 2005 to 8.4% in 2015. Among the general pool of freelancers, 47% reported making more money on their own than in a traditional job. The average gross income of full-time independent workers jumped to $64,450 per year, up 30% since 2011.
  • There was a rise in self-employed non-employers (individuals with more than $1,000 in Schedule C income but not employees) as a percent of employment from 12% in 2000 to 16% in 2013.
  • Workers in alternative work arrangements who also report themselves as self-employed had a declining share from 58% to 59% in 1995 and 2005 to under half (48%) in 2015, thanks to the workers who found work through contract firms or temporary help firms.
  • The rise in alternative work arrangements has been sharpest for older workers (those 55-75 years old) and strong for prime age workers (those 25-54 years old). But there was no change in the percentage of workers aged 16-24 who were employed in alternative work arrangements from 2005 to 2015, despite more than 50% growth in incidence across all workers.
  • There has been a notable rise in the share of women workers in alternative work arrangements. Additionally, other workers showing an increase in gig-type work include college graduates, multiple job holders and Hispanics.
  • Alternative work is more common among older workers and more highly educated workers, and the workforce has become older and more educated over time.
  • Construction as well as professional and business services were the two most prevalent industries.
  • Workers in alternative work arrangements are spread throughout several occupations.

Looks can be deceiving

The on-demand economy and alternate work arrangements represent a new type of labor model and a new business model. Millions of workers in this new economy make money form online platforms that classify workers as independent contractors legitimately. However, forcing workers to take up contract jobs just to keep costs down is a lose-lose situation where the workers do not have job security and employers risk misclassification.

Those who are found guilty of misclassifying their workers may find themselves paying ruinous penalties that could potentially threaten to shut their operations down. Companies that take workers on as W-2 employees may find their labor costs being higher than their rivals’ – but they get the benefit of having them work consistent schedules and train them how they want.

So as you can see, it’s still too early to tell. And there is still the fudge factor, where a few employers, knowingly or not, are misclassifying their workers.

What do you think? Do you think gigs will be the new jobs in 2020?

Create your own time capsule

Make your prediction in the comments below, mark your calendar and come back in 2020 to see the results!


Disclaimer:
The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.

One Response to “As We Race Toward 2020, it’s Time to Ask – Are Gigs the New Jobs?”

  1. Shelley Luzaich says:

    I think that it’s going to be pretty close that gigs will be on par with jobs on or near the year 2020 as more and more individuals, and especially younger generations, design their work around their lives instead of the other way around.

Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.