When you think of “gig work,” most people envision a contract or freelance job like driving an Uber or working for Instacart. Gig work used to be viewed as a side hustle and not a viable career option. However, according to a recent Forbes article, “During the pandemic, while many industries slowed, the gig economy grew exponentially, due to a massive need for services and a growing pool of newly available workers who needed to generate income.” This increase in demand has led to a change in how people view this unique industry.
Gig work has opened the door for people to make money pursuing their passions by giving them access to an audience willing to pay for their specialized skills. So what does this mean for college students who are just starting out or high school students who are not looking to follow the traditional college path? Is gig work a viable option? Can this line of work become a full-time career? Follow us as we answer these questions, discuss the latest news and controversies surrounding companies hiring gig workers, and speak with expert career coach Carolyn Parelli on the pros and cons behind the new gig economy.
The Good, the Bad & the Controversy
Not interested in the typical four-year college experience or a nine-to-five job? Re-entering the workforce? Switching professions? Gig work does offer unique opportunities for those not looking for traditional career routes. Freelance workers find that their status allows them great flexibility with the ability to operate from a remote office or from home. This versatility is often attractive to individuals working around family schedules. Greater independence is another perk of contract work. With nobody to look over their shoulders and the freedom to work from wherever they can, gig workers can complete a job the way they feel would work best and on their timetable. Projects may also be filled with different assignments instead of similar, monotonous daily tasks. This variety allows workers more creativity and control over projects.
During our interview with Carolyn Parelli, a career development coach passionate about helping people leverage and grow their unique talents, we discussed the pros and cons of joining the gig economy. When asked about the positives of gig work, Parelli offers, “Most of the people that I’ve worked with that are doing this kind of job use it to test drive and explore their passion. And the good thing is that they can do this freelance job, get the experience, and many times they can do all of this and still have a primary source of income.” Pay can also be lucrative – with the right gig. The company Dolly, a delivery service, pays on average $20 per hour. And for skilled workers, some jobs can become steady as well as profitable. For example, HelloTech contractors provide outsourced tech support to people at their homes and businesses, and the estimated pay averages $50 per hour.
The downside to all of these perks? For most gig economy jobs, benefits and security are not part of the package. Some companies may offer benefits to longer-term contractors, but this is rare. Instead, workers need to budget to purchase private health insurance and decide how much to put away for retirement. Similarly, most companies won’t remove taxes from a paycheck. As a result, most gig workers need to plan on covering two types of taxes: income tax and self-employment tax. When asked about other negative aspects of contract work, Parelli reveals, “When you are working from home [as a contract worker], you miss out on the community and social capital you get from working in an office or group setting. Meaning, young professionals do not get to learn directly from veterans in the business.” She also adds, “When a client says they want to enter the gig workforce, I tell them to make sure this is what they want. I tell them to remember that you’re not getting that sick leave. You’re not going to get that development. You’re not getting that mentoring that comes with a traditional office environment or traditional onboarding process.”
Companies Profiting From Gig Workers: A Controversial & Grey Area
“Gig work may be a benefit for those looking for extra money on the side or with unpredictable schedules. Still, there is a middle class that relies heavily on gig work, cannot afford instability, and are not getting fairly paid for the amount of work they are doing,” states a recent Forbes article. For example, Google’s contractors, also called their “shadow workforce,” outnumber its full-time employees. However, according to a New York Times article, their pay is less, and the benefits are not as good – even though many contractors do the same amount of work as full-time staff. Why is this happening? States and the federal government are trying to define the distinction between contractors and employees more clearly to address this issue in the workplace. The difference usually depends on how much control the company exercises over the worker. This distinction is based on specific criteria, such as whether the company can hire or fire the employee or control work schedules. As a result, companies keep contract workers at arm’s length. According to NYT, “In response to the issues with its temp workforce, Google is both trying to improve their treatment and distancing itself from their management.”
Another NYT article reports that companies like Uber and Lyft view their drivers as independent contractors, allowing them to avoid health insurance, unemployment insurance, sick leave, and other employment benefits. To support their position, these companies poured more than $200 million into a ballot measure, known as Proposition 22, that would allow drivers to remain independent contractors. However, that plan was recently upended by a California judge who ruled that the ballot initiative backed by these gig economy companies violated the state’s Constitution. This ruling is seen as a setback for the companies and a victory for labor organizers and drivers who argue they are being mistreated. However, California’s attorney general can file an appeal to overturn the judge’s decision – which could take several months. So what does the future hold? As of now, gig economy companies may be required to begin paying into workers’ compensation funds. However, the businesses argue that nothing will change until the appeal is resolved.
Gig work may not be for everyone, and better protections for this group need to be addressed, but for those looking to blaze their own career trail, the gig economy may be the right path leading to a bright future. Moneywise imparts some sage advice before beginning this journey:
- Hone your brand.
- Manage your time well.
- Stack up gigs, so you’ll have different sources of revenue.
- Go above and beyond what your client needs.
- Never stop learning – learning new skills will help you to up your game and score more gigs.
