Key Job Facts About the Gig Economy

Millennials at wifi cafe
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The workplace has transformed from one in聽which many workers had the same employer for most of their working lives, to one of much more frequent聽job changes, where many workers choose聽聽over "permanent"(long-term) employment.

Being a聽聽without the restrictions of having聽a boss has traditionally been an aspiration for many American workers. What鈥檚 better than being able to set your own hours, and to work where, when聽and聽how you want?

For every person that has聽chosen to聽work in the gig economy聽though, there are others who have聽ended up there by聽default. Some workers have been thrust into self-employment as employers have relied on聽聽to avoid fielding聽the costs of healthcare and other responsibilities聽and聽benefits associated with taking聽on full-time employees. Also, many older workers were displaced during the sub-prime聽banking crisis and have opted for self-employment as a last resort, since they were unable to regain traditional employment.聽

The result has been the emergence of a聽gig economy聽where workers are tapped by employers to work on a per-project basis without the status (or聽) of being聽a聽. Individuals like actors, musicians, film production workers, and seasonal farm hands have always migrated from gig to gig, but now the trend has expanded into many other areas, especially within service industries.聽

Overall Trends in Self-Employment

An analysis of the聽聽by the Bureau of Labor Statistics (BLS) indicates an upward trend in self-employment. In 2013, 14,555,000 workers were categorized as self-employed with either an incorporated or unincorporated status. By December 2019, that group of workers had increased by about 10% to 16 million. This increase was particularly notable given the decrease in family-run farms during the same period. Furthermore, the聽聽for self-employed workers from 2016-2026.

The聽y commissioned by Upwork and the Freelancers Union indicates that 57 million Americans participated in some form of freelance work during the past year (either part-time or full-time). That figure represents an increase of 4 million freelancers since the findings of the same report in 2014.

Common Occupations for Freelance Employment

According to聽, a leading online network linking freelancers to employers,聽: designer and creative; web, mobile and software developer; administrative support specialist; writer; translator; accounting/finance/consulting professional; IT and networking professional; sales/marketing/customer service professional; lawyer/paralegal; engineer; architect; and data science/analytics specialist.

Here are some of the聽highest-paying gigs.

Where the Jobs Are - and Aren鈥檛

, 21 states had higher rates of self-employment than the national average of 10.1% in 2015. The states with the highest rates included:

  • Montana 16.1%
  • Maine 15.4%
  • Vermont 14.4%
  • South Dakota 14.2%

Twenty-nine state states had lower rates of self-employment. The lowest included:

  • District of Columbia 7.1%
  • Delaware 7.2%
  • Alabama 7.5%

Self-Employment By Age

聽in 2016 individuals of聽65 years and older had the highest level of self-employment (24.1%); followed by those aged 55 to 64 (14.7%); 45-to-54-year-olds at 11.8%; 35-to-44-year-olds at 10.1%; 25-to-34-year-olds at 5.7%, and 16-to-24-year-olds at 2.2%.

聽uncovered a different trend by generation: the younger the worker, the more likely they were to have聽been聽a聽freelance in the past year. Generation Z was the most likely to have聽worked聽freelance, with 53% participating in some freelance activity, followed by millennials at 40%, Generation X at 31%, and baby boomers at 29%.

Self-Employment By Gender

At 12.3%,聽men were much more likely to have聽been self-employed聽in聽2016, while only 7.5% of women were self-employed.

Self-Employment By Educational Level

According to the BLS,聽levels of self-employment varied somewhat, but not dramatically, by聽. Those workers who possessed professional or doctoral degrees were an exception and experienced much higher levels of self-employment:

  • 21.3% of individuals with a professional degree, such as doctors, lawyers, and architects who maintain private practices, were self-employed.
  • 16.6% of those with a doctoral degree worked independently.聽
  • Workers with a high school degree and those with a bachelor's degree had a self-employment rate of 11.2%.
  • Those with a master's degree came in at 9.3%.

Self-Employment By Country of Origin and Race

Foreign-born workers were somewhat more likely to be self-employed than their U.S.-born counterparts. The self-employment rate for foreign-born individuals was 11.2%,聽but only 9.8% for native-born workers.

White workers (10.9%) were more likely to be self-employed than Black/African Americans (5.2%), Asians (9.6%), or Latinos (8.3%).

Self-Employment: By Choice or Forced?

The聽聽indicated that 70% of self-employed workers had freely chosen that status either as a primary or supplemental source of income. The remaining 30% of self-employed individuals were in that situation either as "reluctants" who would prefer traditional jobs or as聽"financially strapped" individuals who were forced to聽聽through independent work.

According to The聽y, with a stronger labor market 60% of freelancers reported that they had聽started freelancing by choice, up from 53% in 2014.

Gig Economy Legal Issues

In some locations like California, for example,聽聽have been passed that make it harder to classify freelancers as contract workers. In these locations many workers doing project work may be reclassified as employees unless they pass strict classification tests.

This may reduce the number of employers willing to engage freelancers, since employers will be required to pay payroll taxes and abide by minimum wage laws and other protections for employees. Contact your聽聽for any developments in your area.