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How Gig Economy Grew in the Pandemic for Startups

Over the last 6 years, the gig economy has doubled in size. A third of that growth happened in 2020 alone, when the gig economy grew over 8 times faster than the US economy as a whole. With pandemic restrictions and uncertainty crippling traditional employment sectors, the official unemployment rate reached 14%. Unable to survive on savings and government assistance alone, 2 million Americans turned to gig work to supplement their incomes. While some may return to formal employment as the economy recovers, others plan to stay on as freelancers.

Gig Economy Post Pandemic

Freelance work will play an important role in the post-pandemic recovery. 4 in 5 US companies are planning to increase their use of gig workers. Half of all organizations have already done so. When the pandemic caused uncertainty about the future, the idea of hiring workers for years-long contracts became less appealing. Companies want labor to complete their current project. If they like the work someone does on their current project, they may hire them again the next time a similar project arises. Less commitment equals less risk in the firm’s eyes.

This attitude towards employment may benefit workers as well. 65% of gig workers believe a diverse clientele provides more income security than a full time job. While exact income can be variable, losing one client is less devastating to a gig worker than the loss of a full time job would be to a traditionally employed person. Additionally, project based work tends to leave gig workers working fewer hours. 58% report working less than 30 hours a week. Yet because each gig pays more, 70% of gig workers say they earn more than traditionally-employed peers working similar jobs. Another benefit of gig work is its relatively low barriers to entry. High school grads have the potential of earning just as much as degree holders in the gig economy.

Where the Gig Work Jobs Are

What sort of jobs are dominated by gig workers? Perhaps the most ubiquitous is delivery service. Apps like Uber and DoorDash rely on gig workers to bring their services to users. Uber drivers set their own hours based on market conditions and personal preference, not a negotiated schedule. Jobs like these boomed during pandemic lockdowns. The delivery industry as a whole is expected to reach a total value of $200 billion by 2025.

Beyond delivery, other gig jobs include moving, babysitting, phone repair, bartending at events, yard work, and pet sitting. No one type of person is more suited to gig work because gig jobs can require all sorts of skill sets. Manual labor and skilled work are both needed in a gig economy.

The greatest determinant of who can be successful in a gig economy is who can land the most gigs. 70% of freelancers use online platforms to find work. People hoping to break in need to build a profile on job boards. New workers should select a wide range of services they can provide and try their hand at everything. Specialization can come after one develops experience. 

How Gig Economy Grew in the Pandemic for Startups
Source: WageDev.com

The post How Gig Economy Grew in the Pandemic for Startups appeared first on Grit Daily News.

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