The last decade has brought a huge revolution in the field of freelancing and independent work. People from all sorts of industries are moving towards independent work and are earning a decent amount of money. A freelance work or a side hustle which provides someone with an amount of money comes under Gig Economy. Gig Economy is a highly beneficial concept for people who are less interested in a time-bound 9 to 5 work. People who want to have flexibility in their work and want to have a work-life balance can use it.
The US has experienced a rapid surge in the number of workers who want to work independently. According to McKinsey's American Opportunity Survey, around 35% of employed workers in the USA identify themselves as independent workers. If you also have some interest in freelancing or a side hustle then this article is for you. This article can be extremely helpful for people who want to have complete knowledge about the gig economy, what are its challenges and how it benefits workers. All these points will be discussed in detail in this article and will provide you with all the information related to the gig economy.
What is the Gig Economy?
The word ‘gig’ refers to the task or project you will be doing in order to earn money. Due to this reason, the term gig economy came into existence. Gig economy is composed of three major components which are the independent workers who are going to be paid for the work they have done, the consumer who needs work to be done and the company that acts as a point of connection between the consumer and the worker. Companies can help consumers to connect directly with service providers through an application, a website or some other means. These applications and websites are the mediums through which both the parties can connect to each other and get their work done and get paid. Independent work (Gig) arrangement and traditional work arrangement are quite different from each other. In traditional work arrangement, employees have a permanent job and are paid a predefined amount while in case of a gig, the workers have a temporary job and are paid on the basis of the work they have done.
Reason for the Rise of the Gig Economy in the USA
A wide range of factors are responsible for the rise of the gig economy in the USA. These factors combined have resulted in an increase in the number of independent workers in the USA in the last decade. The factors that have contributed towards this rise include modernization, technological advancements, increased use of the internet, and many others. In this growing world of digitalization and technological advancements, a huge number of companies and individuals are adopting these technologies to simplify their work and get their job done at a low price. The increased use of the internet has been a great supporter in these advancements and has allowed both consumers and workers to fulfill their motives. It forms a bridge between the customers and the workers. It provides customers with the opportunity to get their project completed at low cost and given opportunities to the workers to earn a reasonable amount of money.
Challenges for Freelance Workers
As freelance workers don't have a permanent source of earning, they might face a multitude of challenges. Some of the major challenges faced by independent workers include healthcare, transportation, housing, and childcare. Healthcare is quite convenient for permanent workers in the USA because under the ACA, it is the responsibility of the employer to provide healthcare insurance to 95% of its full-time employees. But, it is not the same for freelance employees. Therefore, they have to bear their healthcare costs by themselves. Moreover, the transportation and housing in the USA is not so cheap. This makes it difficult for independent workers to afford a decent house and transportation services in the USA. However, if they work consistently and build a trusted image in the market, they can overcome these challenges very easily. The independent workers who have a credible image in the market can earn a fair sum of money and bear all the costs they want.
Benefits of the Gig Economy
Gig economy is beneficial for independent workers and small businesses in several ways. Where independent workers can get a job and earn money, small businesses can get the puny tasks of the business at low costs. The benefits of the gig economy are discussed below in detail.
1. Flexibility
Flexibility plays a vital role in the life of workers and businesses. Gig economy can provide them with this flexibility as businesses can hire a freelance worker for a small time period while the worker has the option to work with the company or not. This means that there is no pressure on the workers to work with a company if they are not interested in it. Similarly, there is no pressure on the company to have an employee in the company who isn't adding anything to the business. Moreover, workers can work according to their will as there is no daily time boundation on the workers.
2. Cost Savings
Another important benefit of the gig economy is that it helps businesses to save a lot of money which they use in other operations of the business. It is costly to hire full time employees and buy equipment and a workplace. Outsourcing the work to a freelancer can save businesses from these costs.
3. Efficiency
The gig economy can be highly efficient for businesses because there is no need to hire full-time employees. Businesses can hire gig workers in very less time to complete the tasks. In this way, businesses can start their operations very easily and gain a competitive edge in the market.
Wrapping Up
Gig economy has been on a rapid rise in the past few years in the USA. The number of gig workers in the USA is constantly increasing. As it is more efficient for businesses to hire independent workers rather than full-time workers, a lot of people are preferring to become gig workers. The factors that have led to this revolution are technology and increased use of the internet. But it comes with a price because independent workers might need to go through a challenging phase before reaching stable ground. The challenges for gig workers include healthcare burder, costly housing, less affordability for transportation and some others. However, gig economy also provides businesses and workers with some benefits such as flexibility, scalability, reduced costs, speed, efficiency and many more.