Gauging the Gig Economy

Gauging the Gig Economy

Gauging the size of the “gig economy” has proven an exceptionally difficult task, with different surveys producing widely discrepant results. Time recently commissioned yet another survey to this end, suggesting that the gig economy is quite large:

TIME’s poll of 3,000 people, conducted by Penn Schoen Berland in late November, found that 22% of American adults, or 45 million people, have already offered some kind of good or service in this economy. … The vast majority of these 45 million people who have so far offered goods or services have other sources of income and describe their experiences in this new economy as positive, according to the poll. About one-third, whom we might call motivated offerers rather than casual ones, aren’t just earning extra bucks; they either make more than 40% of their income in this economy, describe it as their primary source of income or say they can’t get work in a more traditional job.

But other economists who have attempted to study this poorly-understood market are already casting doubt on these numbers. International Business Times reporter Cole Stangler covers the controversy:

“I think this Time survey is kind of ridiculous,” said Larry Mishel, an economist and president of the Economic Policy Institute (EPI), a left-leaning think tank.

Both Mishel and [Princeton economist Alan] Krueger were baffled by the finding that 14.4 million people derive significant income from the on-demand economy, a number that is 24 times greater than Krueger’s recent estimate of gig economy workers. The Time survey … also found that 10 percent of the U.S. adult population has “offered” a ride-sharing service at some point. At around 20.6 million people, that’s roughly 50 times the number of drivers Uber itself says it has.

Stangler goes on to explore why the employment data the government collects doesn’t properly account for this new class of worker:

People working full-time for Uber and Instacart should, in theory, be classified as “self-employed,” according to Bureau of Labor Statistics criteria. And yet the number of self-employed workers in the United States has held steady over the last two decades, at around 15 million, according to the BLS. Meanwhile, the number of the unincorporated self-employed workers has dropped over that stretch, reaching 9.5 million last November.

Those categories are far from ideal, though. People who make extra money on the side from an app — say, those who deliver groceries 10 hours a week forInstacart in addition to working 25 hours a week at a restaurant — are unlikely to describe themselves as self-employed.