Everything You Need to Know About the Gig Economy

Everything You Need to Know About the Gig Economy

Millions of people in the U.S. work as freelancers. They have traded the corporate lifestyle for a remote workspace. They are their own bosses and strive to serve their client base as best possible. The freelance labor supply in the U.S. is growing. Let’s have a look at why this new gig economy is so attractive.

What is the Gig Economy

The gig economy is the labor market that accepts contract- or part-time work. People working in the gig economy (freelancers) aren’t employed full-time by a single employer. Instead of having a fixed employer, these people have clients. The two parties have an agreement where the freelancer supplies the labor and the client pays for the service or product they received.

Rise of the Gig Economy

We live in a digital age. The world has become one global village. Technology helps to facilitate international communication, business, and trade. These digital technological advancements have created platforms that facilitate the gig economy. Online marketplaces advertise jobs or services required by companies and freelancers apply to fill the need. Take Uber and Lyft for instance. They are two of the largest transportation companies in the world, but they own virtually zero vehicles. Freelance drivers offer their vehicles and services in exchange for payment.

The fact that most things in our modern world is digital also means freelancers can work from remote office spaces for their clients. Their clients may very well be halfway across the world, but they are servicing them just as well as they would if they were sitting at the next desk.

These factors combined with the many advantages of working as a freelancer as caused the gig economy to rapidly grow.

Size and Projects for Growth

It is hard to pinpoint exactly how many people work in the gig economy, but the Bureau of Labor Statistics says about 11% of the U.S. workforce fall in this category. On top of that, there are also many full-time employed people who are involved with the gig economy on a part-time basis. Many people use the opportunities available on these online marketplaces to earn extra income. This is commonly referred to as a “side hustle”.

This new job market is, therefore, not only providing full-time work for freelancers but also helping people grow their financial wealth on a part-time basis. In the same sense, the company offering a contract and needing the product or service also has the opportunity to grow. A company in a third world country, for example, can now get expert help from people all over the world. This helps companies to grow beyond the skills shortages in their immediate environments. Companies who don’t have the resources to employ someone full-time can also still make use of a specialized skill for a specific project or need.

Gig Economy Jobs (and How Much You Can Make)

There are many industries that post different jobs on freelance platforms. So you can expect many types of job listings. Here are a few of the most lucrative type of jobs on the gig economy in need of labor.

Machine Learning and Artificial Intelligence Related Jobs

The use of Artificial Intelligence (AI) is one of the fastest growing trends in the digital world. Industries stretching from the Internet of Things (IoT) to education use AI. Data scientists, software engineers, and machine learning engineers earn on average between $30.72 and $40.25 per hour. Some may even earn as high as $115.06 per hour.

Blockchain Related Jobs

The rise of cryptocurrencies over the past years has caused an increase in the demand for blockchain labor. Blockchain is the technology which cryptocurrencies rely upon. The average hourly rate currently for a blockchain freelancer is $87.05.

Robotics Freelancing

Robots have almost taken over the manufacturing industry. Businesses are looking for faster and more productive ways to solve their problems and robots are the solutions. However, someone still has to design, program, install, and service these robots. Freelancers who provide these types of services earn on average $77.46 per hour.

Gig Economy Pros and Cons

There certainly are a lot of opportunity in the gig economy. But, choosing the gig economy has a trade-off effect. The pros draw many hopefuls to a better life. But, there are still a few negatives to keep in mind. Let’s look at the pros and cons of the gig economy.

Gig Economy Pros

These benefits, pros, or call it what you want are enough to make anyone jealous of freelancers.

Supplemental Income

The gig economy is open to anyone who wants to join (within the confines of the law). You can get a job as long as someone is willing to hire you. Anyone who has the skills and the time can partake in this economy. Great opportunities for supplemental income are available to anyone who is willing to work.

Work from Home

This offers great flexibility to freelancers. You can partake in the gig economy from anywhere you have an internet connection. You just need to make sure you meet your client’s expectations. This allows parents to still earn an income even if they need to be at home to look after their children.

Greater Independence

Freelancers are independent. They decide their work hours and they determine their work environment. Freelancers also enjoy creative freedom to produce what they deem as necessary for the client. They don’t have a manager or a boss telling them what to do. They only have the client to please.

Variety of Jobs

Each gig has its own parameters and its own goals. With every new gig, there is a new adventure awaiting. The wide variety of clients and gigs will keep people from feeling like they are stagnating into one monotonous role. Just make sure you don’t break the law when you take part in the gig economy. Being an Uber driver whilst studying on an F1 visa is against the law, for example.

Gig Economy Cons

Before making the big shift to the gig economy, you have to keep the cons in mind as well. Saying hello to the gig economy is a definite goodbye to a few other things.

No Benefits

The gig economy doesn’t supply any work benefits. There are no medical aid benefits, no retirement annuities, and certainly no paid leave. People employed in the gig economy need to plan wisely. You need to make sure you save for retirement and you need to plan for your leave days as well. In the gig economy, your paycheck goes on leave with you – no work, no pay.

Quarterly Taxes

You are paid according to the contract you have with your client. You are not their employee and they will therefore not deduct any taxes. You need to plan and budget for your tax payments. You can ask the IRS what the best way is to file your taxes, but it generally requires quarterly payments.

Isolation

Some people enjoy being part of a larger group. They find a greater sense of purpose when they are part of a team. Being a freelancer means lots of work hours spent in isolation. That is why many freelancers opt to work in co-working spaces (but that has a monthly membership costs to it).

More Stress

Having work today doesn’t mean you’ll have work tomorrow. People who work gigs are constantly looking for their next gig. This causes some people in the gig economy to live with constant pressure to find their next paycheck. Not having a boss is nice, but this requires you to be your own manager and find new gigs.

Freelancers also need to finance their own efforts such as buying the tools, hardware or software required to do the job. Freelancers often look at credit offerings like loans for Uber drivers to finance their operational expenses. This can obviously put more strain on your budget if you don’t plan wisely.

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Conclusion

The gig economy is a wonderful opportunity for extra income. It offers flexibility in work hours and a wide variety of jobs. But, those who are brave enough to venture into the unknown need to battle the uncertainties that come with it. Either way, the gig economy is still a great opportunity for anyone who needs employment.

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