If you've heard rumblings about the gig economy, you may be wondering exactly what that means – both for those who take part in it and for those who continue to work full-time jobs.
What is the Gig Economy?
The term "gig economy" generally refers to working outside the stereotypical 9-to-5 routine of a typical job. This arrangement may seem unusual, but it is increasingly becoming normal for many workers. In fact, surveys estimate that more than one-third of all workers is a freelancer, consultant, or worker without regular hours or benefits. At least in theory, stringing together multiple short-term positions instead of a full-time job can offer more flexibility and freedom than a regular job.
Gig economy jobs all share common traits – they tend to lack benefits like health insurance or retirement contribution matching, social security and other taxes are not withheld from paychecks, and employers send a Form 1099 rather than W2 at the end of the year. As a result, gig workers need to be organized enough to keep careful track of their income, make quarterly tax payments, and find alternative arrangements for missing benefits like health insurance and retirement savings.
Gig workers may also be responsible for marketing their services and finding new jobs. While some gigs may fall into an aspiring freelancer's lap, in most cases, you'll need to seek out this work and maintain relationships with clients or the businesses and organizations that hire you. This can be a shift for those accustomed to leaving the workplace behind at the end of the day.
Why is the Gig Economy Expanding?
Although there has always been a segment of the working population that has entered into short-term freelancing arrangements rather than entrepreneurship or traditional jobs, the gig economy really began to gain ground during and after the Great Recession of 2008. With jobs hard to come by and the cost of living continuing to rise, many workers began picking up what short-term positions they could, from pizza delivery driver to seasonal retail worker, to make ends meet.
Now, the job market is far more robust than it was a decade ago, but many who entered the gig economy then shown no sign of returning to a 9-to-5 working schedule. Others use the gig economy as a way to ease into retirement, spend part of their time as a stay-at-home parent, or even to supplement wages from a traditional job.
