The number of U.S. workers engaged in the ‘gig’ economy continues to rise. In fact, a study by LinkedIn predicts that by the year 2020, 43% of the U.S. labor market will be made up of freelance and contract workers. And these freelancers do not just fall among the younger generation.
The gig economy has become attractive to older workers for a variety of reasons as well. Of course, technology plays a huge role in supporting this movement, but when we look to the other factors driving this shift, we can’t help but wonder if the gig economy is truly the future of work.
According to their studies, there are four driving factors making the gig economy so attractive:
Unemployment
The average duration has expanded from just 8.5 weeks in 1980 to 25.1 weeks in 2017.
Pensions
There’s been a dramatic decrease (from 60% in 1982 to 14% in 2017) in the number of U.S. workers enrolled in pension plans, leaving workers with far less retirement savings to fall back on.
Automation
It seems that machine learning, and technology in general, are putting many traditional jobs at risk. Some reports showing up to 47% of jobs in the U.S. could be eliminated by 2040.
Cost of living
Median income has fallen and the average price of rent has gone up.
These factors equate to growing uncertainty and economic insecurity among the U.S. workforce. So it makes sense that many are turning to freelance and contract work to either supplement their full time or part-time jobs or to branch out on their own and create more financial independence than a traditional job can offer. Though it should not be overlooked that some workers are simply striving for a better work-life balance than a 9-to-5 job would allow. And some seek greater autonomy over their schedules or the type of work they’re doing.
Regardless of the motivation behind each individual worker, it’s clear that the gig economy as a whole is here to stay. With more and more on-demand platforms emerging to support freelancers in finding work and many of those on-demand professionals report being highly satisfied, it’s easy to see why. The combination of all of these factors is reshaping the U.S. workforce and we believe we can expect this shift to continue, and strengthen, into the future.