As you DoorDash your midnight snack, you have the gig economy to thank for the driver behind the wheel. The gig economy refers to those in free-lance or side hustle work. More specifically in today's day and age, the gig economy often refers to jobs that are enabled by technology. In the United States, the gig economy generated $204 billion (USD) and was projected to amass $455 billion by 2023. Today, nearly one-third of the American population has participated in the gig economy or another independent work arrangement in some way. 

For many workers, the gig economy is especially unique because it provides workers more independence and freedom. Instead of working the conventional nine-to-five, workers can “make their own hours.” For many gig economy workers, this enabled them to feel that they led “richer lives than their corporate counterparts.” Additionally, the gig economy is greatly beneficial to those who are unemployed or between jobs. A 2020 study from MIT discovered that those who were unemployed and had access to gig economy apps such as Uber or Lyft were less likely to rely on unemployment benefits or borrow money.

However, the informal nature of the gig economy makes it difficult for the government to collect accurate data regarding employment numbers. This inhibits the Federal Reserve from obtaining a sufficient understanding of the American workforce and thus implementing adequate monetary policy.  

Overall, the gig economy is one of the most unique and relevant sectors of the American economy today. Its flexibility and consistency make it an attractive job for many today, however, the government must develop better measures to account for these workers. Have you ever participated in the gig economy?


References:

Petriglieri, Gianpiero, et al. “Thriving in the Gig Economy.” Harvard Business Review, 1 Mar. 2018, https://hbr.org/2018/03/thriving-in-the-gig-economy.

Delouya, Samantha. “The Rise of Gig Workers Is Changing the Face of the US Economy.” CNN, 24 July 2023, https://www.cnn.com/2023/07/24/economy/gig-workers-economy-impact-explained/index.html.

Harris, Jonathan. “The Future of Work: The Rise of the Gig Economy.” National Association of Counties, 27 Nov. 2017, https://www.naco.org/featured-resources/future-work-rise-gig-economy.

“The Gig Economy: Shaping the Future of Work and Business.” Park University, 31 July 2024, https://www.park.edu/blog/the-gig-economy-shaping-the-future-of-work-and-business/.