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The History and Future of the Gig Economy

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Did you think the term gig economy was a modern concept? You’d be wrong. Yes, it refers to the growing number of freelancers and contract workers making up the workforce. But its origins stretch back much further.



What is the Gig Economy?

Spawned by jazz club musicians in the early 1900s, the notion of a “gig economy”, whereby individuals have greater work flexibility but without the benefits of the employed, such as healthcare, pensions and paid holidays, has been around for more than a century.

With over a third of US workers now in the gig economy, it’s important small businesses are aware of the history and, perhaps more importantly, the future of this rising working trend.

To shed some light on the inescapable prevalence of the gig economy, Gig Worker, providers of insights into how to leverage the gig economy for workers and customers, created an infographic focused on the history and future of the gig economy.

The History

We’re all familiar with the word “gig” to describe a musical concert. The term was coined in the second decade of the 1900s, by jazz musicians who regularly performed in jazz clubs.

Consider the Great Depression of the 1930s. The notion of less secure and less location-based work escalated. Many farmers sold their land because of drought and falling prices. They found themselves unable to find steady work. So they were forced to work as migrants, moving from farm to farm.

In the 1940s, the first temp agency was opened, providing businesses with typists and other clerically trained staff on a temporary basis.

During the 1990s, 10% of the US workforce was employed as contractors, temps and on-call workers, as the demand for more flexible work patterns and non-permanent staff intensified.

Gig Economy Moves Up a Gear in the Digital Era

When the digital era really started to take off in the late 90s and early 90s, so too did the gig economy.

The likes of Craigslist, Upwork and other remote job platforms and crowdsourcing marketplaces began to surface, providing gig workers with a place to find work.

In 2008, Airbnb was launched, enabling anyone with a spare room to generate an additional income by letting it out.

By 2018, Airbnb was worth a staggering $38 billion.

The gig economy was turned up another notch in 2010, when Uber arrived, recruiting contract drivers. By 2015, more than 1 billion rides had been completed with Uber drivers.

Why Is the Gig Economy So Popular Today?

More than a third of the US workforce now opts for a gig economy lifestyle. So what makes this type of work pattern so popular.

According to the infographic, 30% of gig workers choose to work this way because it means they are independent and effectively free agents.

An estimated 40% of the gig workforce use such contract work. They earn a supplementary income. And 16% use gig jobs to make the most of their money.

An estimated 14% of gig workers admit to using this type of work reluctantly. They do it as a means of making ends meet.

The Future

You may love it or loathe it. But the gig economy shows no sign of diminishing. On the contrary, by 2027, 60% independent professionals will make up 60% of the workforce.

More workers would opt for this working lifestyle if they could. The infographic reveals a whopping 94% of employees would consider this non-traditional employment. And 64% of employees say they prefer gig work to traditional employment.

Ensuring Gig Economy Employers Adhere to Tighter Regulations

But set aside for a moment its prolific rise. The gig economy attracts its share of criticism. For example, in 2014, New York City threatened to ban Airbnb and fine hosts. Subsequently, a law passed in many cities banned short-term rentals unless a host is present.

Similar laws have been passed and even more are likely to be in the pipeline, that protects both gig workers’ rights and the rights of consumers using gig economy services like Airbnb and Uber.

What Can Small Businesses Learn from the Rising Gig Economy

Small businesses should consider the rising demand from workers for flexible contracts and remote work. This provides them with greater freedom, flexibility and better work/life balance.

However, small businesses should also think about of the potential pitfalls of the gig economy. They must ensure they comply with the latest legislation involving gig work. They must protect workers and customers. And they must protect their own credibility and reputation.

what is the gig economy

Image: Depositphotos.com/Infographic: Gigworker via NowSourcing
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Labor Groups, San Francisco Push Bogus Taxpayer-Funded Survey to Support Anti-Gig Law

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A liberal advocacy group’s own researchers raised red flags about a taxpayer-funded study used to justify a union campaign against the California gig economy.

The San Francisco Local Agency Formation Commission helped fund a survey conducted by Jobs with Justice, a left-wing advocacy group largely funded by labor powerhouse Service Employees International Union (SEIU). The survey reported that 71 percent of gig workers in the San Francisco area work more than 30 hours a week and receive “poverty level” wages. According to the group’s website, Jobs with Justice planned to use the survey to “make policy recommendations and support organizing” among gig workers. The survey’s summary page emphasizes the need to enforce anti-gig labor laws.

Left-wing labor group Gig Workers Rising has used the survey to rally in support of California Assembly Bill 5, a controversial law limiting companies’ ability to classify workers as independent contractors. The group called the study “the most comprehensive survey of actual work done” in the gig economy. Internal communications obtained by the Washington Free Beacon, however, reveal that the survey was pitched to potential financial backers as “not representative,” and an academic researcher involved in the study voiced concerns regarding Jobs with Justice’s recruitment tactics.

While the study initially called for 1,200 survey respondents, Jobs with Justice narrowed the scope following the spread of coronavirus, pivoting to an online survey focusing on the pandemic that aimed to reach just 500 respondents.

“The goal behind an online survey of 500 workers, while not representative, would be to turn around data quickly … in order to inform current policy discussions,” an internal description of the updated survey obtained by the Free Beacon said. It went on to reach just 219 respondents.

Pacific Research Institute senior fellow Wayne Winegarden criticized the study’s methodology, calling the survey’s results “meaningless.”

“The survey is not representative of the intended population with the original goal of 500 responses,” Winegarden told the Free Beacon. “The study did not reach this amount, having only 219 responses. So, in no uncertain terms do these results represent the view of gig workers.”

The study also downplayed Jobs with Justice’s involvement in an attempt to bolster its academic appeal. While the published survey lists UC Santa Cruz professor Chris Benner as the project’s lead, Jobs with Justice executive director Kung Feng is described as “leading” the project in internal emails obtained by the Free Beacon. The emails also show that the online survey was written by the group’s research director, Erin Johansson. Benner merely “edited the wording in a few questions,” according to the internal communications.

Benner, who did not return request for comment, also raised concerns regarding Jobs with Justice’s incentive plan to provide a gift card to all survey respondents.

“One, I’m not sure where the budget for that comes from, and two, with an online survey, it leaves open lots of opportunities for people to game it,” Benner wrote in a March 17 email to Johansson.

Following the academic’s objection, Gig Workers Rising continued to advertise the survey in an April tweet by saying respondents would “get a $10 gift card.” A Jobs with Justice invoice for the study listed $45,181 in “survey costs,” including “incentives and app payments.” While the published study lists the gig economy companies each of the survey’s 219 respondents work for, internal data obtained by the Free Beacon shows that 91 of the respondents did not report their company, suggesting some may have been non-gig workers who completed the survey for the incentive.

The invoice was sent to San Francisco Local Agency Formation Commission executive officer Bryan Goebel, who solicited funding for the study on Jobs with Justice’s behalf, internal emails show. Reached for comment, Goebel said the coronavirus-related study “was never intended to be” representative and that $50,000 in taxpayer funds were used only for the “initial pilot survey” launched prior to coronavirus. The final study combined the results of both the pilot survey and coronavirus-related survey, a methodological red flag, according to Winegarden.

“In the midst of the survey being in the field, they stopped the survey, reworked it to account for the coronavirus, and then continued with the survey,” Winegarden told the Free Beacon. “These results from before and after cannot be compared to one another.”

Goebel also told the Free Beacon that Benner “was indeed the overall lead” on the study, adding that Jobs with Justice simply “led the outreach.” He did not address the fact that the coronavirus-related survey was drafted by Jobs with Justice.

Charlyce Bozzello, a spokeswoman for labor watchdog the Center for Union Facts, said activist front groups often misuse research to advance their ideological goals.

“For years, unions have used flawed ‘research’ to support their organizing campaigns, so it’s no surprise to see Jobs with Justice involved in this project,” she told the Free Beacon. “What is surprising is that the city of San Francisco and UC Santa Cruz would lend their names to this charade.”

Other gig economy studies dispute Jobs with Justice’s findings. A Cornell University study published Monday found that 96 percent of Uber and Lyft drivers in Seattle drove less than 40 hours a week. It further found that 92 percent made more than Seattle’s minimum wage of $16.39, with the media driver earning $23.25 per hour after deducting expenses.

Jobs with Justice and Gig Workers Rising did not respond to requests for comment.

Collin AndersonCollin Anderson is a staff writer for the Washington Free Beacon. He graduated from the University of Missouri, where he studied politics. He is originally from St. Louis and now lives in Arlington, VA. His email address is anderson@freebeacon.com.



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Why the Uber driver case has the potential to alter Canada’s gig economy forever

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Heller was a driver for UberEats who argued that he was an employee, not an independent contractor. That meant Uber owed him overtime, vacation, holiday pay, as well as other entitlements.

The Supreme Court didn’t answer the question of whether Heller and other Uber drivers were employees or not, so in that respect the real issue lies ahead. But it did remove an important roadblock, paving the way for a potentially $400 million lawsuit.

Tucked away in the contractor agreement that every Uber driver must sign before they can start working is an arbitration clause.

The clause required drivers to bring any problems to arbitration in Amsterdam, the Netherlands, and not to an Ontario court. The arbitration in Amsterdam would cost around $14,000 in administrative fees up front, as well as the cost of transport and legal representation in the Netherlands. Something no Uber driver could even possibly afford. Take Heller himself, who earns around $400 to $600 a week for 40 or more hours of work.

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Gig Economy Ballot Measure Fails Workers, Labor Groups Say (1)

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Daily Labor Report®

July 7, 2020, 8:45 PM

A California ballot measure supported by ride-hailing and delivery companies would lower workers’ wages and limit the power of legislators to institute new labor protections, according to a new report from two labor advocacy groups.

Proposition 22, known as the “Protect App-Based Drivers and Services Act,” will appear before California voters in November and is backed by $110 million from Uber, Lyft, Postmates, Instacart and Doordash. The companies say their workers want to preserve their status as independent contractors, while the National Employment Law Project and the Partnership for Working Families counter that the proposition would roll back existing protections under a state law giving certain gig workers…

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