The latest gig economy statistics tell us that times aren’t just changing - they’ve already changed. Gone are the days of working from nine to five in a cradle-to-grave job. Nowadays, it’s increasingly common to piece together an income from several different sources and work when you want, not when your boss tells you to.
The proliferation of freelancing and gig work - especially through major gig economy employers such as Uber, Lyft, Turo or Fiverr - shows this. We’re witnessing a massive shift from traditional work and full-time employment to freelancing, working part-time, and independent contracting. This is often referred to as the gig economy.
So, how can we define the gig economy? Broadly speaking, the gig economy is a free-market system in which companies look to work with independent contractors or freelancers as opposed to hiring full-time workers. The ‘gig’ part of the name refers to the dominant model of work in this economy, where workers are employed and paid per job or project.
In this economy, workers have temporary or part-time positions, allowing them to frequently change employers or work for several different businesses at the same time. The rise of this economy is closely connected to advances in technology and the trend of working remotely as so-called digital nomads. This provides even more flexibility for both freelancers and clients.
We’ve compiled some interesting gig economy statistics to paint a better picture of what work looks like nowadays.
So, how big is the gig economy in the US? It’s hard to know for sure, especially when people do freelance work in addition to their main job. The variance in how we define gig work doesn’t help, either.
Statistics provided by the Bureau of Labor show there were 55 million US gig workers in 2017. The most recent and reliable data is from a Gallup poll on the gig economy presented in the company’s Gig Economy and Alternative Arrangements study. This study revealed that more than a third of all US workers - around 57.3 million people in total - were employed as independent workers before the global health crisis struck. At the start of the COVID-19 pandemic, 52% of worldwide gig economy workers lost their jobs due to the economic downturn. Meanwhile, 26% had to settle for reduced working hours.
Data from the latest Gig Economy Index shows that around 40% of US workers generate 40% of their income by freelancing. This shows how much people depend on the gig economy financially, with many forced to do gig work in addition to their regular job to make ends meet. Many earn extra income by driving an Uber or working for one of the other top gig economy companies.
(Wonolo, MBO Partners)
Based on the information published by Wonolo, the total number of freelancers in the US increased by 4.2% in 2017, compared to 1.3% in 2015. However, the MBO Partners’ report revealed the number of full and part-time gig workers with consumers as primary customers decreased by 34% at the start of the global health crisis in 2020.
According to a freelance industry report provided by Upwork and the Freelancers Union, employee monitoring data shows that freelancers spent a total of 1.07 billion hours per week freelancing pre-pandemic.
Upwork statistics show that the number of independent workers is growing three times faster than the total US working population, which indicates a bright future for the gig economy. Moreover, compared to non-freelancers, independent workers are better equipped to weather the coronavirus storm.
The MBO State of Independence report points out that the revenue generated by both full and part-time independent workers during last year equates to about 5.7% of US GDP. This is partly thanks to advances in technology and connectivity, which enable freelancers to tap into markets across the globe.
Freelance workforce statistics published by the Association for Enterprise Opportunity demonstrate just how much freelancer-owned businesses contribute to the US economy. In 2013, micro-businesses owned by freelancers generated $2.4 trillion dollars, which made up 17% of the USA's GDP at the time.
According to gig economy facts provided by Wonolo and Statista, more than half of the country’s workforce will be doing some form of freelance work in the coming years if growth trends persist.
Gig economy statistics from 2020 provided by the MBO’s State of Independence show that more than half of the full-time independent workforce feels more financially secure than they would in traditional jobs. Although financial security is one of the most important factors when it comes to employment, job security and medical coverage are often big concerns for freelancers.
An Upwork study entitled “Freelancing in America” found that more than half of freelance workers are highly optimistic about the future and would not go back to traditional employment, no matter how much money was on offer.
Between 2011 and 2020, the percentage of millennials making up the independent workforce grew from just 12% to a full third. Another 26% of freelancing jobs in the USA are held by Boomers, while Gen X accounts for 25% of the independent workforce. Gen Z only makes up 16% of the total, but as the newest generation to enter the workforce, it’s expected to establish itself as the most entrepreneurial generation ever.
It seems most workers now prioritize lifestyle over earnings. Striking the right balance appears to be much easier for freelancers than it is for those working full-time jobs.
McKinsey gig economy research also reveals that freelancers seem to be happier and feel healthier than their full-time counterparts. As far as income security and benefits go, freelancers are as satisfied as traditional workers.
In its Independent Work study, Mckinsey found that a substantial number of traditional job workers in the US and five other countries would like to become primary independent earners. Meanwhile, according to Upwork’s report, 64% of freelancers say that professionals who are at the top of their industry are increasingly switching to working independently. The data only serves to highlight the growing popularity of freelance work.
McKinsey’s survey examined satisfaction levels among different workforce groups. The main parameters were whether they were traditional or independent workers and whether this was by choice or necessity. Of all the demographics covered, independent workers who switched to the gig economy by choice were the most satisfied with their working arrangements.
Freelance statistics show that the majority of independent workers aim to stay independent. 54% of men and 43% of women earn more money working as freelancers.
This trend was disrupted in 2020 with the start of the COVID-19 pandemic when the percentage of gig economy workers who said they were freelancing by choice fell to 59%. This was the same level recorded in 2016.
Payoneer’s 2020 Income Survey shows that hourly rates for freelancers fall between $10 and $28 in the most popular fields, with the average income for freelancers being $21. In all cases, this average is significantly higher than the national average in the respondents’ home countries. These freelance rates go some way to explaining why people begin to freelance or switch completely to the gig economy.
Some of the key reasons for freelancing include the ability to work remotely, schedule flexibility, extra money, and independence. Many freelancers also like being their own boss. This is the case with 66% of full-time freelancers who are part of the gig economy as well as 61% of those engaged in part-time freelancing.
The internet has played a huge role in freelancing and the growth of the gig industry. Payoneer’s Freelance Income Report shows that more than 70% of all freelancers find projects through gig websites. Some of the biggest websites that provide gig work are Upwork - which has over 15 million users - as well as Fiverr and Toptal.
Most freelancers believe that technology, mainly through gig economy platforms such as Upwork, makes finding work much easier.
(Federal Reserve Bank St. Louis)
Research by the Federal Reserve Bank of St. Louis shows that people aged between 18 and 29 are 53% more likely to use a smartphone to find a job. For US adults as a whole, that figure is 28%.
Drawing from Payoneer’s gig economy statistics, we can see that more than a third of freelancers in the US use Facebook to promote their work. These numbers are similar to the ones reported in 2018. It seems that freelancers enjoy being their own bosses and doing their own PR work.
That’s up to 162 million working-age people across the US and the EU-15 who are involved in some sort of independent work.
The UK seems to be following in the footsteps of the US in terms of gig economy growth, with Britain’s freelancer economy experiencing a significant expansion in recent years. Millions of workers - or one in 10 working-age adults - were part of the gig economy prior to the pandemic. The most recent disruptions in the labor market are only increasing people’s reliance on freelance work.
According to the Association of Independent Professionals and the Self Employed, the number of independent workers in the European Union rose by 24% between 2008 and 2015, jumping from 7.7 million to 9.6 million.
Global economic uncertainty has had a direct impact on the real estate market. Gig economy facts reveal that one in four freelancers who said they are not planning to buy a home in the next five years decided to wait because of concerns over the COVID-19 health crisis.
These workers were typically working in industries most impacted by social distancing rules and didn’t have an opportunity to work remotely. About 41% said they were freelancing less than once a month.
There’s no doubt that the gig economy is here to stay. Although gig workers in certain fields had to pause, others were presented with an opportunity to work independently as a result of the global health crisis. Technology and automation professionals, digital customer experience, and virtual assistants are in high demand. The most frequently stated reasons that these workers give for starting freelance jobs include financial stability during the recession (75%) and necessity (54%).
Independent workers have reported a lower negative impact from COVID-19 on their lifestyle, mental health, financial situation, and overall well-being. Still, given the greater emphasis on remote work and outsourcing, many freelancers had to adjust their business development and networking strategies.
Despite having an already established remote lifestyle, 30% of US freelancers said that the opportunity to get financial support during the pandemic was very useful for their business.
According to Upwork’s comprehensive Freelancing in America survey, 86% of all independent workers in the US believe the gig economy will only improve as time goes by. That sentiment is shared by 90% of new freelancers.
Upwork’s research on gig economy trends shows that those with a postgraduate degree are best represented among freelancers, with 41% of them engaged in independent work.
In the coming years, millennials will account for much of the world’s workforce. When we consider that young people freelance more than any other generation, this may signal another boost for the gig economy as a whole.
According to the Intuit 2020 report on the future of gig work, more than 80% of large corporations plan to change their recruitment strategies and use more non-traditional workers in the coming years.
Is freelancing on the rise? The stats say yes. There are more people doing gig work, both in the US and elsewhere. Companies are increasingly working with freelancers, the gig economy pumps a significant amount of revenue into the US economy, and most freelancers seem happy with the state of the market. As our gig economy statistics show, the coronavirus pandemic has only accelerated the growth of the freelance market. If current trends persist, the gig economy will continue to expand rapidly. Soon, it could even overtake the traditional job market.
The Bureau of Labor statistics on the gig economy show that there were 55 million workers in this market in 2017. According to the latest and most reliable stats, there are now 57 million gig workers in the US economy, accounting for 36% of all US workers.
There are several reasons the gig economy continues to grow. On one hand, workers, especially younger ones, seem to prefer freelancing over full-time employment because of the flexibility and independence it provides. Non-traditional employment, especially through leading gig economy websites, allows them to choose where, when, and for whom they work. At the same time, companies can benefit from having a flexible workforce; they spend less money on training or recruitment, usually don’t pay for any medical coverage, and can more easily replace their workforce if needed.
Workers, both young and old, seem to prefer the benefits of being independent. After all, those who work in the gig economy can determine their own working hours, choose which jobs to take, and decide which clients to work for. Companies, too, can enjoy the advantages of this agile labor market. Those that hire independent contractors can change their staff more easily and greatly reduce their recruitment and training costs.
Damjan won’t tell you how to run your business, but he will try to advise you on how to save your money and avoid financial ruin. As a staff writer at SmallBizGenius, he focuses on finding the most consumer-friendly services available and provides advice to both established and fledgling businesses out there.
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