Last Updated: August 31, 2021
In this era of digitalization, we are no longer looking at ads in the newspaper to find work. Instead, we are using online platforms, such as gig economy apps. After all, most gig economy statistics state that this is the future of work.
The Internet revolution, right?
Truth be told, guys, the gig economy has been around for a long time.
Nonetheless, we will take a look at some stats to get an idea of why this work arrangement is so popular.
Who knows? Maybe by the time you finish reading this, you will have quit your 9-to-5 job.
Gig Economy Statistics (Editor’s Pick):
- In 2020, the independent workforce contributed $1.21 trillion to the US economy.
- 59% of independent workers are such by choice.
- 9 out of 10 traditional workers consider becoming independent workers.
- 38.2 million Americans freelanced in 2020.
- On average, freelancers earn more per hour than non-freelancers.
- 50% of freelancers are skilled professionals.
- The average hourly rate for legal services experts is $255.
What Is the Gig Economy?
Before we go on with the gig economy stats and facts, we will define the gig economy.
A gig worker is the opposite of a salaried worker. Salaried employees are paid for the hours worked. They can have a full-time or a part-time job, and they have regular shifts. Depending on the employer, they may also have some benefits, such as health insurance.
On the other hand, gig economy workers get paid for the job done. They don’t need to clock in or out. They don’t have lunch breaks, sick leaves, or vacation days.
The client hires a gig worker or a freelancer because they need someone with specific skills or expertise to complete a task.
Gig Economy Participants
These are the main participants in the gig economy:
- The client or consumer – the person or the company requesting the goods or services.
- Gig economy platforms – the platform which connects the consumer with the worker.
- The gig worker – the person providing the goods or services.
The use of a platform for finding work is optional. For example, many freelancers or gig workers find work through word of mouth. Or they promote their services in a different way.
Gig Worker Examples
While many people can get a ‘gig,’ here are some examples that will give you a better idea of how this type of nontraditional employment works.
- Graphic designer
- Uber or Lyft driver
- Home tutor
- In-home nurse
How Does the Gig Economy Work?
Let’s say you are planning to open a restaurant. You will need someone who will design the menu, but you don’t need to hire a graphic designer full time. There is no need for it – it’s a one-time gig.
You can start by going to some gig economy websites and searching for a freelance graphic designer. Some may have posted a portfolio on their profile that will help you decide which freelancer you want to work with. In general, gig economy platforms let clients post a review after the work is done. As only clients who hired the freelancer through the platform can leave a review, you will know that the reviews are genuine.
That’s all there’s to it. If a consumer needs someone for a specific task, they hire a professional and pay them for the gig. Then, if they are happy with the service, they leave a review. If the client didn’t use a platform, they could recommend the worker to their friends and family.
There are other good examples of on demand jobs and gigs. For example, hiring a babysitter or a dogsitter, a housekeeper, a mover… The list goes on and on.
When Was the Term Gig Economy Coined?
This type of arrangement has been around for a long time. It’s nothing new.
What is new is the term – gig economy.
It was coined by journalist Lisa Brown in an article describing the effects of the 2008 recession.
As Brown pointed out, the financial crisis had an immense effect on the labor market. As a result, many either lost their jobs or had their hours or/and salaries reduced. This forced a lot of people to become gig workers or freelancers for supplemental income.
Gig Economy Statistics
Now that we have covered the basics let’s move on with the numbers and the facts!
1. Almost 25% of working Americans participated in the gig economy in 2020.
(Source: MBO Partners)
How big is the gig economy?
It’s hard to get an exact number because, unlike traditional employment, this work arrangement isn’t clearly defined.
To start off, some workers are full-time freelancing by choice. We also have workers that have traditional jobs but need gigs to supplement their income. Then there are temporary workers who would prefer traditional employment but were hired for a limited time.
What percentage of today’s U.S. workers are self-employed?
According to figures released by the US Bureau of Labor Statistics (BLS), 9.548 million Americans were self-employed as of January 2021. But this is just a fraction of the gig market.
A study by MBO Partners shows that 38.2 million US adults participate in the gig economy in some capacity. The number represents nearly a quarter of the nation’s total workforce.
Yet, a separate study by daVinci Payments claims that the gig economy size grew 33% in 2020 to represent 93 million US adults.
This is a whopping figure! Isn’t it?
See, estimates vary widely. But the general consensus is significantly more modest. Forecasts also suggest the gig economy will only reach this size in the next seven years or so.
To be precise…
2. The number of freelancers in the US is expected to reach 90.1 million by 2028.
As per gig economy statistics, as many as 86.5 million Americans will freelance in 2027. This equals 50.9% of the total US workforce. By 2028, the figure is projected to exceed 90 million.
The gig economy has been on the rise for the last decade. Fueled by the ongoing technological development, work flexibility is becoming more of a norm.
The consequences of the Covid-19 pandemic on the work market may only accelerate this trend, as both employers and traditional workers have made use of the gig economy opportunities for remote work. In fact, 58% of non-freelancers who are new to remote work due to the pandemic are now considering freelancing in the future.
3. The Freelancers Union has more than 500,000 members.
(Source: Freelancers Union)
Founded by Sara Horowitz in 1995, this is probably one of the largest freelance organizations advocating for policy changes and benefits.
The Freelance Union represents graphic designers, consultants, temporary workers, contingent employees, independent contractors, and other types of self-employed workers.
4. In 2020, the independent workforce contributed $1.21 trillion to the US economy.
(Source: MBO Partners)
If anyone ever tried to tell you that what you’re doing isn’t a real job, you can quote this stat.
US gig workers contributed $1.21 trillion to the US economy in 2020. This is equal to about 5.7% of the national GDP.
To further put the number in perspective, Spain’s total GDP in 2020 was just over $1.3 trillion.
5. 10% of the US workforce paused freelancing during the pandemic.
Speaking of the Covid-19 impact on the gig economy, Upwork estimates that some 10% of its participants ceased work during the pandemic. The slim majority of them had other sources of income, 28% were on leave/furloughed or unemployed, and 17% were students, homemakers, or retirees. Also, 41% of those who continued freelancing did so infrequently.
As evident in the other labor market statistics for the gig economy, however, these are just some minor hiccups in the general trend.
Let’s see why!
6. 12% of the US workforce started freelancing during the pandemic.
While some paused, others seized the opportunity of flexible, remote working conditions and joined the gig economy during the pandemic.
For the majority of freshers (54%), the decision was driven by necessity. Just a few months into their freelance experience, almost all (96%) reported positive financial results.
Separate findings by GigSmart, a gig matching platform, show that the number of gigs completed per day increased by 25% since the coronavirus outbreak in March 2020.
7. 92% of traditional workers consider joining the gig economy.
Gig jobs prove to be appealing to traditional workers. But how many workers in the US recognize the current economic backdrop as a good time to switch gears? 92%!
- 57% said they would take some kind of gig job while they’re in-between jobs
- 52% said they would like a long-term contract with flexible hours
- 39% would want a short-term contract or temporary work.
8. 70% of executives intend to hire freelances or temporary on-site workers.
On-site contract arrangements are quickly becoming the new in-house. The continuing rise in remote work prompted by the Covid-19 pandemic further accelerates this trend.
Executives in the food services and accommodation sectors report the highest intention rate to provide jobs for independent workers in the future. The healthcare and social assistance fields are also set to migrate to a model with greater reliance on on-site contractors.
One of the reasons behind these plans may be the opportunity to make labor a variable cost through contracting on demand. But gig economy statistics reveal another major factor…
9. Gig economy IT projects are 30% more efficient.
(Source: Constellation Research)
A recent study by Constellation Research shows that gig economy-staffed IT projects were 30% more productive. In addition, they resulted in reduced customer complaints and were rated highest in satisfaction for gig workers themselves.
While there’s no available data to confirm this, we can speculate that other industries recognize similar advantages of hiring contractors. That would explain the increasing number of employers opening new gig positions.
10. IT analysis is the hottest industry in the white-collar gig economy.
ProUnlimited looked at the hottest industries for contingent hiring in 2020. According to its findings, the demand for IT analysts increased the most (43%), followed by data engineers (31%), IT/tech project managers (23%), marketing managers (18%), clinical pharmacists (18%), and designers (9%).
At the other extreme, industrial, manufacturing, and administrative jobs for independent workers declined in the observed period.
11. 42% of independent workers are female.
(Source: MBO Partners)
Historically, the male/female proportion of gig workers has been relatively even. Women were exactly half of the total in 2019, but fell to 42% in 2020.
The reason behind this drop may be that a significant number of female freelancers work in fields and roles that have been highly impacted by social distancing. In addition, Covid-induced caretaking is another cause for women pausing or cutting back on work.
12. Flexibility is the top reason women choose gig work.
(Source: MBO Partners)
In terms of male/female attitudinal differences, women are much more likely than men to site flexibility as their reason to choose gig work — 74% compared to 59%.
On the other hand, independent male workers said they loved being their own boss (69% vs 55%). The financial motivation was also stronger among men, with 54% stating they make more money working on their own. For 43% of women, earnings were higher at gig than at traditional jobs.
13. Millennials and Gen Zers represent over half of the independent workforce.
(Source: MBO Partners)
Expectedly, Millenials and Gen Zers make for the largest cohort. Digital natives, those aged 18-38 represent 56% of all gig workers in the US.
Gen Xers and Baby Boomers make for 28% and 16%, respectively.
14. 59% of independent workers are such by choice.
(Source: MBO Partners)
The 2020 figure is down from the previous year’s estimate of 67%.
As a result of the pandemic, many lost their secure employment and were forced to seek alternatives. Namely, 14% of the survey respondents said their independent contractor status was due to a job loss or inability to find a job.
15. 36% of freelancers have advanced degrees.
Gig workers are more highly educated than the general public. According to FlexJobs, 36% of freelancers have advanced degrees, compared to 29% of the overall working population.
This is somehow consistent with a separate 2020 study. According to Upwork’s findings, most remote freelancers or gig workers are highly skilled professionals. In fact, 50% of freelancers are skilled in programming, marketing, IT, and business consulting. This is up from 45% in 2019.
16. 54% of gig workers report a great work-life balance.
This is reported in most freelance statistics – independent workers are satisfied with the flexibility, autonomy, and control provided by the gig working arrangement.
According to the FlexJobs survey, more than half of independent workers stated that their work-life balance is either great or very good. This compares to only 29% of respondents without flexible work options who reported the same thing.
17. Gig economy workers have a higher Anxiety Index score.
(Source: Edison Research)
The flexibility and independence associated with the freelance economy come at a cost, it seems.
A poll conducted by Edison Research, a reputable survey site, measured the amount of stress and anxiety among workers regarding their financial situation.
- 24% of traditional workers had an Anxiety Index score higher than 50.
- 38% of workers where the gig economy was their secondary source of income had an Anxiety Index score higher than 50.
- 45% of workers where the gig economy was their primary source of income had an Anxiety Index score higher than 50.
Gig economy workers had higher scores than traditional workers, which was mostly attributed to the lack of job security and benefits.
Indeed, According to a 2017 PayPal report, a staggering 50% of freelancers have experienced not getting paid. The top reason cited by the survey respondents was that employers didn’t take them seriously.
18. 13% of independent workers used a digital platform to find work in 2020.
(Source: MBO Partners)
This was a significant increase from 2012 when just 1% of independent workers reported using online marketplaces as their primary source of clients and gig market projects.
Unsurprisingly, younger people are more likely to use gig economy companies. While 44% of Gen Z and 40% of Millennials use online platforms, only 20% of Gen X and 14% of Baby Boomers do so.
A separate study by Fiverr states that word-of-mouth remains the most popular mean for finding gig job opportunities, with 67% of respondents relying on references. Some 23% said they use social media for networking, while 18% reported tapping into online marketplaces — fairly in line with MBO Partners’ estimate.
19. 85% of side-gig workers make less than $500 per month.
Don’t jump to the conclusion that gig economy participants work at below-market rates. Let’s clarify that the statistics concern people who use gig economy platforms to earn extra cash and not as a main source of income.
Looking at the platforms specifically, 98.3% of Getaround workers make less than $500 a month. Fiverr and Etsy also have a high proportion of low-earners — 96.3% and 95%, respectively.
On the other end of the spectrum, nearly half of Airbnb hosts make more than $500 a month. Another interesting Earnest finding is that Lyft and Uber drivers earn approximately the same average per month, though drivers who work on both earn more on Uber. Also, TaskRabbit workers earn triple as much as Fiverr workers.
20. On average, freelancers earn more per hour than non-freelancers.
Gig workers can actually earn more than traditional ones.
Freelancers make $20 an hour compared to $11.31 an hour, which is the median rate for the US overall. Freelance rates for skilled workers are even higher — the median rate is $25 an hour.
A separate study by MBO Partners reveals that in 2020, 56% of workers felt more financially secure working independently. This compares to just 32% in 2011.
21. 75% of gig workers earn the same or more than when they had a traditional employer.
As we’re comparing the wages of gig and traditional workers, let’s consider this: 10% of the people who quit their job to start freelancing reported earning the same. Yet, some 65% said they make more money than when they had a traditional employer. Of them, 57% began earning more in under six months into freelancing.
But what if the gig economy income statistics weren’t so buoyant?
Well, according to Statista findings, for more than half of US freelancers, no amount of money would convince them to return to a traditional job.
22. The average hourly rate for a legal services expert is $255.
(Source: Generation Nomads)
What wannabe remote gig workers want to know is:
How much can I make as a freelancer?
As with any industry, the answer is… it depends. We’ve already covered the average income for gig workers. Now let’s look at several particular examples:
Workers with jobs like Uber and Postmates depend on tips, the number of orders they had, etc. This means that they aren’t getting a fixed hourly rate.
Certain professionals in the freelance industry, though, get an hourly rate. Among the highest-paying jobs for independent workers are:
- software developers — $220
- accounting/bookkeeping advisor — $215
- web/graphic designers — $195
- Applied Behavioral Analysis specialist — $195
- asset manager — $175
- IT strategist — $165.
On the other end of the spectrum, cleaners receive just over $11 an hour on average, Statista’s gig economy job statistics show.
Now let’s sum up the most important gig economy facts:
Around 38.2 million US adults participated in the gig economy in 2020. Of course, this number wouldn’t mean anything to you if you don’t know the total American workforce size, which is 146.6 million.
Those who are part of the gig economy by choice are happier than those who need to supplement their income or have no other option.
There are gig workers of all ages and backgrounds – but younger people are more likely to work independently.
Gig workers are better educated than the general public and have a higher earning potential.
Gig workers by choice enjoy the flexibility offered, whereas others are anxious about their financial security.
And there you have it!
Before you decide to quit your job and become a gig worker, check out a gig economy jobs list so as not to regret your spur-of-the-moment decision.
We hope that these gig economy statistics gave you that push you needed to consider an alternative work arrangement.
Good luck with your gig job search!
See you around SpendMeNot, guys!