Is The Gig Economy Even A Thing?
America’s Part-Time Workers Are Either Exploding In Number Or Staying About The Same. Here’s Why Nobody Really Knows.
The gig economy may be terrible for generating full-time jobs, but it certainly is good at generating headlines.
And depending on which one you read, the gig economy itself is either a menacing force that will dictate the economic realities of young Americans for their entire lives—or it’s not really a thing at all.
How exactly does that compute when it feels like you’ve been navigating an informal system of patched-together part-time jobs and contract stints your entire adult life? Feel free to ask economists Alan Krueger of Princeton University and Lawrence Katz of Harvard, whose oft-quoted 2016 study pretty much coined the phrase “gig economy.”
Detailing how apps like TaskRabbit and its delivery-providing ilk were changing the face of the American economy by creating a new generation of part-time or gig-based workers, it found that these “alternative” work arrangements had risen sharply in the previous decade—from employing 10.7% of workers in 2005 to 15.8% in 2015, according to the study.
But now—after some reflection and an acknowledgment that they were working with incomplete numbers—Katz and Krueger say they, well, overspoke.
“Larry Katz and I now conclude that there was a modest rise in the share of the workforce in nontraditional jobs over the last decade—probably on the order of one or two percentage points, instead of the five percentage-point rise we originally reported,” Krueger told the Wall Street Journal.
Part of the problem is that the initial Katz and Krueger study relied on statistics from a 2005 report from the U.S. Bureau of Labor—which didn’t have matching data a decade later, since the agency didn’t have the funds to conduct a sequel to the study.
Instead, Katz and Krueger attempted to replicate the study with data from the RAND Corporation. According to CNN, the survey by RAND was done online and was much more modest in scope than the initial BLS survey, which was conducted over the phone and allowed answers from family members, who might not have really known the full extent of their relatives’ side work.
While the differences seem small, the effect on the study was sizeable, Katz and Krueger now acknowledge.
In describing their epic walk-back, a Fortune article cites a study from the Bureau of Labor Statistics that claims nothing fundamentally changed in the makeup of the American workforce between 2005 and 2017, and that only 10% of it was made up of people who relied on the gig economy—down from 11% in 2005, according to the New York Times.
According to a study by the JP Morgan Chase Institute, the number of people who relied on the gig economy for work actually dropped over the past two years—and most people engaged in it only gig for a few months a year or less to pad their bank accounts. Narrowing it down to those working for driving and delivery services, the study found that only 58% worked for a handful of months before finding work elsewhere, alongside those who made their extra dough through home improvement-based apps like TaskRabbit.
Also of interest? The study found that one in six people finding work through online platforms are newbies, with more than half leaving the gig economy just a year later.
So does this mean the gig economy never really happened? Not at all—but its size and the actual definition of its membership will likely continue to be a subject of debate for years.
“The gig economy is here to stay, and it’s only growing,” author Diane Mulcahy told Vox. “People want to work differently. But as long as we have a labor market which penalizes you if you are not a full-time employee, I think it’s unlikely that the gig economy will be the predominant way of working.”