What is the Gig Economy? Pros/Cons.

The term was borrowed from the music world, where performers booked "gigs" that were single or short-term engagements at various venues.

The gig economy is in its infancy, none of the companies like Uber, Lyft, Doordash, Instacart even existed a decade ago. It is a two sided marketplace where apps bring gig workers and the consumers to the table. By a few clicks, we are able to order and get pretty much everything delivered to our doorstep. These last mile goods and services are offered with great ease and convenience to millions of consumers and also provide a side hustling income to millions of gig workers around the globe. 

The evolution of cell phone technology has played a major role in the gig economy's explosion. One in six Americans are involved in the gig economy, mostly on a part time basis. To the individuals working in the gig economy, it is worth it. Studies show that 79% of individuals who work in the gig economy are more satisfied than when they were working traditional W2 jobs. Barriers to entry are very low and most gig workers earn much needed cash to pay bills as well as lay the foundation towards their plan B. Gig economy is a labor market that relies heavily on temporary and part-time positions filled by independent contractors and freelancers rather than full-time permanent employees.

A wide variety of positions fall into the category of a gig. The work can range from driving for people around or delivering food to writing code or freelance articles. Adjunct and part-time professors, for example, are contracted employees as opposed to tenure-track or tenured professors. Colleges and universities can cut costs and match professors to their academic needs by hiring more adjunct and part-time professors.

Pros

Flexibility & Freedom:Many freelance workers in the gig economy find that their status allows them great flexibility. From working the hours they desire, to working where they want, there are many options for gig economy workers. 

Greater independence:Many contract or gig economy workers find that they are given independence to complete their work. Not being in an office may aid this independence. With nobody to look over their shoulders, gig economy workers may find they are given a task and then mostly left alone to complete it. 

A variety of jobs:Gig economy workers may find they have a wide variety of jobs to complete. Instead of similar, monotonous tasks to be done each day, each project or gig may be filled with different elements that make the work interesting.

Cons

No benefits:Unfortunately, for most gig economy jobs, benefits aren’t part of the package. Because you’re not a full-time employee of the organization, the laws regarding the benefits the company needs to give you are different. Gig economy workers should plan on budgeting for purchasing private insurance. They also need to plan retirement and budget how much of a paycheck to put towards that each month.

Quarterly taxes & Expenses:Similarly, most companies won’t remove taxes from your weekly earnings. That means paying taxes is something you’ll have to plan for. The IRS allows you to make quarterly tax payments based on what you’ve earned. Gig economy workers are also  responsible for all personal expenses associated with working, most importantly for their vehicle expenses. While these can be written off for taxes, it’s important to be careful with what you deduct and treat gig work as an individual small business.

More stress:Gig economy workers have to regularly be working to find their next gig, or be prepared for changes in their current one. This can lead to stress, as most people appreciate feeling secure and steady in their employment. Gig economy workers sometimes face unexpected changes in their jobs, from deactivation, to a change in the app algorithms. 

Sergio Avedian

Editor in Chief