In this era of digitalization, we are no longer looking at ads in the newspaper to find work. 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 are going to 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 2018, the independent workforce contributed $1.3 trillion to the US economy.
- 72% of independent workers are such by choice.
- 1 out of 6 traditional workers would like to become independent workers.
- 57 million Americans freelanced in 2019.
- On average, freelancers earn more per hour than non-freelancers.
- 45% of freelancers are skilled workers.
- The average hourly rate for a designer is $195.
What Is Gig Economy?
Before we go on with the gig economy stats and facts, we are going to define 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 or sick days 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. A lot of freelancers or gig workers are hired by word of mouth. Or they promote their services in a different way.
Gig Worker Examples
While a lot of 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 is 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 platforms let clients post a review after the work is done. As only clients that hired the freelancer through the platform are able to leave a review, you will know that the reviews are genuine.
That’s all there’s to it. A consumer needs someone for a specific task, they hire a professional and pay them for the gig. If they are happy with the service, they leave a review. If the client didn’t use a platform, they can recommend the worker to their friends and family.
There are other good examples of on-demand labor. 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 is 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, no one had a regular job anymore. People either lost their jobs, had their hours reduced, or had their 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. 36% of working Americans participate in the gig economy.
It is hard to get a definite number of people who have gig arrangements because unlike traditional employment, this work arrangement isn’t clearly defined.
To start off, there are workers that 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 that would prefer traditional employment but were hired for a limited amount of time.
According to the Gallup poll gig economy participants are 36% of the American workforce.
The report states that 29% of working Americans have a gig work or an alternative work arrangement as their primary job. Including the number of Americans that have an alternative work arrangement besides their primary job, which makes 36% of all workers.
The report included:
- independent contractors,
- temporary workers
- online platform workers and
- on-call workers.
2. In 2018, the independent workforce contributed $1.3 trillion to the US economy.
(Source: MBO Partners)
If anyone ever tried to tell you that what you are doing isn’t a real job, you can quote this stat.
In all seriousness though, MBO Partners did a report on the State of Independence in America.
The gig economy trends they researched show that the independent workforce in the USA contributed $1.3 trillion to the US economy. To put the number in perspective, Spain’s total GDP that year was $1.4 trillion.
3. Millennials represent 38% of the full-time independent workforce.
(Source: MBO Partners)
MiLleNniAls aRe rUiNinG tRaDiTiOnAl jObS!
When will they stop ruining everything?
According to gig economy statistics 2019:
- Millennials represent 38% of the full-time independent workforce.
- Baby boomers represent 33% of the full-time independent workforce.
Compared to 2018, the share of millennials that are part of the full-time independent workforce has increased by 1%. The share of baby boomers that are part of the full-time independent workforce has decreased by 2%. This could be attributed to the fact that some boomers are leaving the workforce due to age.
While we are here, we should also define which workers are considered full-time independent workers by MBO.
- Full-time independent worker – someone working more than15 hours a week and choosing this type of arrangement.
- Part-time independent worker – someone working less than 15 per week and doing it to supplement their income.
- Occasional independent worker – someone who works independently at least once per month.
4. 72% of independent workers are such by choice.
McKinsey’s gig economy research has found that most gig workers enjoy their work arrangement.
The reports groups workers into four categories:
- Free agents – those that are full-time independent workers by choice.
- Casual earners – those that are part-time freelancing in order to supplement their income, by choice.
- Reluctants – those that prefer a more traditional work arrangement, but get their primary income from independent work.
- Financially strapped – those that have to do side jobs in order to supplement their income.
5. 1 out of 6 traditional workers would like to become independent.
As stated in the report, for every independent worker who isn’t doing it by choice, there are more than two traditional workers that prefer to work independently. The grass is always greener.
(Image Source: Zety)
6. Gig workers by choice are more satisfied with their work life than traditional workers.
This is something that is reported in most freelance statistics – independent workers, gig workers or freelancers, are satisfied with the working arrangement because they can be more independent. The location and hours are more flexible.
According to the McKinsey report, independent workers by choice stated that they were happy with many aspects of their arrangement.
On the other hand, those that were doing it out of necessity weren’t satisfied with their income level and security.
7. 15% of independent workers have used a digital platform to find work.
Companies such as Uber and Lyft are considered some of the top gig economy companies. But in reality, most gig workers are using e-commerce marketplaces such as eBay and Etsy.
The report states that:
- 15% of gig workers have used a digital platform to find work.
- 36% of gig workers that lease assets use a digital platform such as Airbnb, Boatbound, Getaround, and BlaBlaCar.
- 63% of gig workers that sell goods use a digital platform such as Etsy and eBay.
- 6% of gig workers that provide labor use a digital platform such as Freelance Physician, Deliveroo, TaskRabbit, Uber and Upwork.
8. 3.8% of workers held contingent jobs in the USA in 2017.
(Source: Bureau of Labor Statistics)
The Bureau of Labor Statistics gig economy workers or contingent workers definition includes workers who state that their arrangement is temporary and who don’t expect their jobs to last.
As such, they have listed people hired to work during the holiday season for a company’s shipping department. Other good examples include those hired to replace a teacher on maternity leave.
According to their survey, 5.9 million people in the USA held contingent jobs in 2017.
9. Gig work is the primary source of income for 44% of gig workers.
(Source: Edison Research)
Freelance workforce statistics need to distinguish between workers whose gig work is their primary source of income and those who are doing it just to supplement their income.
According to Edison Research, almost half of gig workers get their primary income by participating in the gig economy.
10. Gig work is the primary source of income for 53% of gig workers aged 18-34.
(Source: Edison Research)
Let’s check out some freelance statistics regarding the demographics of workers.
Gig economy is the primary source of income for:
- 53% of gig workers aged 18-34.
- 39% of gig workers aged 35-54.
- 27% of gig workers aged 55+.
11. Gig work is the secondary source of income for 70% of gig workers aged 55+.
(Source: Edison Research)
Most freelancer statistics show the same trend: older gig workers are part of the gig economy in order to supplement their income or retirement fund and younger gig workers are part of the gig economy because it is usually their primary and only source of income.
- Gig economy is the secondary source of income for 43% of gig workers aged 18-34.
- Gig economy is the secondary source of income for 57% of gig workers aged 35-54.
- Gig economy is the secondary source of income for 70% of gig workers aged 55+.
12. Gig economy workers have a higher Anxiety Index score.
(Source: Edison Research)
The flexibility and independence associated with the freelance economy come at a high cost, it seems.
The Marketplace-Edison Research Poll measured the amount of stress and anxiety among workers regarding their financial situation.
Gig economy workers had higher scores than traditional workers, and this was mostly attributed to the lack of job security and benefits.
- 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.
13. An unexpected expense of $1,000 would be difficult to pay for 80% of gig workers who derive their primary income that way.
(Source: Edison Research)
Being anxious about an unexpected medical bill is not something unique for the freelancer economy. Both traditional and gig workers stated that they were fearful about being able to afford healthcare.
However, when asked about whether they would be able to afford an unexpected expense of $1,000, the share of those working in the gig economy that could not be larger.
A $1,000 unexpected expense would be difficult to pay for:
- 80% of gig workers who derive their primary income from the gig economy.
- 62% of gig workers who derive their secondary income from the gig economy.
- 53% of traditional workers.
14. 57 million Americans freelanced in 2019.
What better source for freelance facts, than the global freelance platform Upwork?
According to Upwork statistics, 57 million Americans freelanced in 2019! That is 4 million more when compared to 2014. Back then 53 million Americans freelanced.
(Image Source: Upwork)
15. 53% of Gen Z workers freelanced in 2019.
As stated in the Freelancing in America 2019 report by Upwork, Gen Z workers represent the highest share of freelancers of any age bracket since 2014.
Here are the 2019 results:
- 53% of Gen Z workers freelanced,
- 40% of millennial workers freelanced,
- 31% of Gen X workers freelanced,
- 29% of baby boomers freelanced.
16. On average, freelancers earn more per hour than non-freelancers.
Median freelance hourly rates are a bit higher than the overall median hourly US rate.
Freelancers in the US make $20 an hour compared to $18 an hour, which is the median rate for the US overall.
Freelance rates for skilled workers are even higher – the media rate is $28 an hour.
17. 71% of freelancers agree that it allows them to work from anywhere they choose.
The main reason why people prefer freelancing is the flexibility it offers. Not every employer allows telecommuting.
According to the report, 46% of freelancers aren’t able to work for a traditional employer. For most of them – 43% – it is because they have health issues.
18. 7 out of 10 freelancers are interested in moving somewhere other than a large city.
It is the era of digital nomads! There are a lot of options for people who don’t want to settle down in one place, such as gig economy jobs from home.
19. 45% of freelancers are skilled workers.
Most remote freelancers or gig workers are actually highly skilled professionals. In fact, 45% of freelancers are skilled in programming, marketing, IT and business consulting.
Unskilled services such as dog walking, ridesharing or other tasks represent 30% of freelance gigs. Selling goods on eBay, for example, represents 26% of freelance gigs. And 29% of the gigs are other activities.
20. The Freelancers Union has more than 490,000 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.
21. 77% of freelancers have a better work-life balance.
According to the 2018 freelance industry report Upwork did on freelancing in the USA, all workers prioritize achieving the lifestyle they want, whether they are freelancing or not.
Yet, freelancers are most likely to achieve this: 84% of full-time freelancers have stated that they got the preferred lifestyle compared to 64% of non-freelancers.
What’s more, 51% of freelancers have stated that they wouldn’t switch to having a traditional job no matter the amount of money offered.
And although 63% of full-time freelancers are anxious about all they have to manage, the majority of them have a better work-life balance.
(Image Source: Upwork)
22. The average hourly rate for a designer is $195.
(Source: Generation Nomads)
What wannabe remote gig workers want to know is:
What is the average income for freelancers?
As with any industry, the answer is… it depends.
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.
And speaking of Uber and money, you can check out the latest Uber revenue statistics here.
Certain professionals in the freelance industry though get an hourly rate. Like web designers or graphic designers. These are among the highest-paying jobs for freelancers
Now let’s sum up the most important gig economy facts:
Almost 60 million Americans freelanced in 2019. This number wouldn’t mean anything to you if you don’t know the total size of the US workforce which is more than 160 million.
Those that are part of the gig economy by choice are happier than those that need to supplement their income or have no other option.
There are gig workers from all ages and backgrounds – but younger people are more likely to be full-time gig workers, whereas older people do it to supplement their income.
Skilled gig workers have higher incomes than gig workers that provide labor.
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!