We’ve been talking about the gig economy in the United States, which, by the end of 2022, had 70 million gig workers—the most in the world—and how this mode of working might tie in with inclusive capitalism. The choice to work freelance comes with pluses, as we found, and some minuses too. Most of the deficits take the form of the loss of financial security nets. Despite some isolated efforts on the part of U.S. lawmakers to give gig workers some of the same rights as employees, it’s the European Union that appears to be taking the lead on codifying labor rules that will give millions of gig workers there the right to pensions, paid leave and accident insurance, according to the World Economic Forum. Even lacking that promise of a safety net, the gig economy remains attractive to many Americans.
We found that across income brackets and types of work, most gig work is taken on by choice, not out of necessity. Through our recent research on the U.S. Gig Economy, we ascertained that 82 percent of gig workers chose to work in this model—a figure that far outstrips the 13 percent of those for whom gig work was the next best option when they couldn’t secure a traditional job. Our third report looked into the reasons why, as well as top ‘best and worst’ factors of gig work and how these inform workers’ lifestyle choices, sense of security, and financial stability. Here’s an overview.
The reasons individuals chose to take the gig route were plentiful. Many felt that either morally or aesthetically, working for a corporation was not for them, whether being confined to a cubicle, the corporate environment or otherwise, they felt being an employee was restrictive to their personal sense of freedom. 40 percent of the gig workers we surveyed expressed this reluctance, with 19 percent saying they couldn’t work in a conventional corporate office environment, 11 percent saying they had ethical issues with corporate America, and another 10 percent saying they couldn’t work for a corporation. As some put it, “No boss, no co-workers” and “I get to choose what I accept!”
But another trend also emerged. Participants in the U.S. gig economy are often polymaths, good at making money in many different ways and not restricted to one type of task. One basic choice for many is how they make their living. Perhaps they were able to find something closer to what they were trained to do or want to do, by working freelance. Maybe their ideal job description didn’t mesh with what companies were offering when they were first looking for work, or perhaps the corporate application process was too daunting or opaque. In any case, Americans’ independent spirit, and their sense that they can do anything they set out to do, is likely a driving factor in their choice of gig work. We will look at this in more depth in a future column.
Flexibility Is Key
Overwhelmingly, we heard about the increasingly popular work-lifestyle choice of spending one’s time as one sees fit. Our research showed that gig workers valued their flexible lifestyle above nearly everything else, with 63 percent saying that flexibility is the key reason this mode of work is the right fit for them. Flexibility is sometimes necessitated by family or health commitments: 13 percent moved to gig work because they had a child; 9 percent had health issues or family care commitments that prevented them from working in a traditional work setting and schedule. Among workers with children, flexibility was the main motivator for 69 percent of respondents.
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However, flexibility can bend both ways. Having control over one’s schedule also benefits those gig workers committed to grinding long hours for maximum financial payoff. Those who realized they could make more money working this way accounted for 35 percent of the gig workers we talked to, a figure that increased to 54 percent among those earning $100,000 a year or more. The financial choice of realizing they could make more money this way was valued by 46 percent of the gig workers we talked to. Their comments gave a sense of the financial flexibility they gain from this kind of work: “I make my own schedule and rates” and “I seem to be happier freelancing, and earnings are not much different.”
The Downsides of Gig Work
Asked to rate the five worst things about gig work, 65 percent of our survey respondents cited ‘lack of job security, predictability of income.’ Only ‘not having access to group retirement plans and other benefits’ came in higher, at 67 percent, and 62 percent didn’t like having to pay for their own health insurance. One of our survey respondents said: “The worst thing? No vacation or sick pay, no holiday pay, no retirement, no medical. I use my own vehicle and put about 60,000 miles on my car every year.”
Paperwork is not most people’s favorite thing, but for gig workers that aspect of life can also become quite complicated, and for some a bit overwhelming. Our research showed that, in response to the question, What is the worst thing about gig work?, 60 percent checked off ‘having to figure out and pay my own taxes,’ a proportion that rose to 71 percent among those who’ve been working independently for less than three years.
Easy To Be Out of the Loop on Fast Changing Technology and Work Culture
The study also found that while 16 percent of gig workers claimed they are better able to adapt to a changing culture as a result of working independently, this was more than canceled out by the 20 percent who reported that they feel out of the loop in a fast-changing work culture. The ambivalence of these responses gives us, as employers, some clues about the needs of workers overall—and what might be a compelling reason for them to become employees again.
While the gig workers in our study expressed certain insecurities and anxieties, they are clearly propelled by positive incentives, whether it’s multiplying their opportunities to make money or taking on multiple different assignments across different trades. But above all, they are seeking freedom and flexibility. While the gig economy has its drawbacks, it fits the bill for a broad swath of workers.
One thing is clear: the nature of work and the workplace changed radically due to the pandemic, and it’s inevitable that some of these changes will stick. The preferences expressed by American gig workers reflect the way people want to work now—and this research gives broad hints as to what we should be offering as employers. While working in a corporate setting was not the top choice for many of our survey subjects, there’s much that employers can heed to better design their workplaces around the flexibility and inclusion that many gig workers find so attractive. To open the door to many of these entrepreneurial-style, creative and independent-thinking workers, employers should be thinking how best to evolve their environments to welcome to such individuals.