Business

Study: Gig Economy Puts Two Million Americans To Work, Accounts For 30 Percent Of New Jobs

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Guy Bentley Research Associate, Reason Foundation

The gig economy put 2.1 million people to work and accounted for 30 percent of new jobs between 2010 and 2014, according to an American Action Forum report released Tuesday.

The analysis finds that the number of workers in the gig economy soared between 8.8 percent and 14.4 percent from 2002 to 2014. Over the same time period, overall employment rose by 7.2 percent.

This dramatic rise has had a significant impact on the makeup of the labor force. Authors of the report Will Rinehart and Ben Gitis, found that “independent contractors (Gig 1) made up 14 percent of the workforce in 2014, they represent 16.9 percent of all new jobs added during the previous 12 years.

“Our broadest measure of gig workers (Gig 3) indicates that they accounted for up to 38.2 percent of job growth,” they added. The AAF defines the gig economy as “businesses and workers that are marked by alternative jobs that are usually temporary and influenced by technology.”

The estimates were based on numbers from the Government Accountability Office. The use of independent contractors in areas such as transportation has soared in recent years and is attracting the attention of lawmakers and regulators. In June, the California labor commission ruled that a San Francisco-based Uber driver is an employee, not a contractor. (RELATED: California Uber Ruling Is A Huge Win For Unions)

On July 13, Hillary Clinton expressed her skepticism over the gig economy, telling an audience in New York City, “I’ll crack down on bosses who exploit employees by misclassifying them as contractors or even steal their wages.”

Uber, which is one of many companies that make up the so-called “sharing economy,” is a related but distinct part of the gig landscape. The sharing economy involves citizens profiting from “under-utilized assets via online marketplaces.” This could be people’s cars via a ride-sharing service or a spare bedroom marketed on Airbnb.

These types of services have so far had a strong record of value creation. According to AAF, “the ride-sharing industry alone helped bring in an additional $519 million in economic activity from 2010 to 2013 for independent workers, while injecting 22,000 jobs into the sector.” In total, there could be as many at 30 million people working in the gig economy amounting to 20 percent of the entire labor force.

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