Gig Economy Moves Toward Critical Mass

Gig Economy

The gig economy now is a noun, where once to “gig” was a verb, without critical mass — to “gig” in other words, was to supplement income, to make ends meet.

And yet with the latest iteration of the Gig Economy Index, some new data show traction is gaining, and where at the end of last year more than 32 percent of workers surveyed were participants in the gig economy.  That kind of participation rate hints that the side hustle is increasingly being made mainstream, where technology brings those offering project work together with those seeking it, in seconds. The participation rate is significant, and so is the income those participants take home — as much as $1.4 trillion last year.

The rate of workers with specialized skills also mirrored the participation rate, at more than 32 percent during the fourth quarter of 2018, up 12 percent over the previous quarter. The percentage of gig workers with non-specialized skillsets decreased over the same period, to 34 percent, off 9 percent.

The read across here is that using “what you know” to boost the top line has been increasingly on the upswing, and indeed knowledge is (earnings) power. Consider the fact that the percentage of gig workers earning $100,000 now stands at 40 percent, up a jump from the 30 percent seen in the third quarter as gig work becomes a full-time pursuit. Again, that pursuit is aided by high-tech digital marketplaces, which were used by more than 38 percent of non-seasonal workers, up from 35 percent. At the same time, we saw a boost in education levels amid these higher earners who sourced ad hoc work from digital means. Those with college degrees increased to 41.6 percent from 39.1 percent previously, and those with graduate degrees rose from 25.1 percent to 37.6 percent.

As for how they get paid? Well, it’s no secret that speed is a factor, and that getting paid often remains alluring to gig workers. In past reports we’ve spotlighted the finding that 85 percent of gig workers would choose to take on more work if they could be paid faster. Perhaps it’s not a surprise, then, that 41.9 percent of these workers were compensated via PayPal, up from 39.5 percent previously, and as many as 26.8 percent of gig workers who found work through digital means were paid instantly. Incidentally, those who use higher-tech conduits to get paid skew a bit younger: 52.9 percent  of gig workers between the ages of 18 and 24 were compensated via PayPal in Q4 2018.

Drilling down a bit more into payments, direct deposit usage also improved, jumping from third- to second-most popular method of payment, while paper checks were pushed to fourth place, but still significant as so many businesses still make payments through checks. We found that 36.7 percent of gig workers were paid by check in the fourth quarter of 2018, compared to 35.5 percent in the third quarter of the same year.

Critical mass comes as growing populations adapt to and adopt new ways of finding work and even getting paid – hallmarks of what we’re seeing with the gig economy right now. The data points show that gig work, once in the shadows, is increasingly front and center.