How The Gig Economy is Shaking Up Corporate America

How project based employment and the sharing economy is changing our country’s professional landscape.

For the past few generations, the American Dream could be achieved by following a simple formula: go to college and major in a subject that the job market needs more specialists in, get a full time job in that field, work 9–5 to receive raises, promotions and benefits, put money in a 401K, retire with a comfortable savings. But this formula for success is no longer the only path that people choose after school. With the age of technology, the millennial generation has more opportunity than ever to make a living as entrepreneurs and freelancers.

In the late 20th century more than 50% of Americans were self-employed. Large corporations emerging in the 21st century decreased this number drastically as most middle class Americans began following the formula above to achieve a successful and comfortable lifestyle. With the emergence of sharing economy technology such as Uber or Airbnb, we’re seeing a shift back to entrepreneurship and freelance style professionals for the first time since the rise of large corporations. Services like Uber and Airbnb allow people to monetize on their existing resources. Anyone with an apartment can host guests on Airbnb and anyone with a car and a (relatively) clean driving record can drive for Uber. These types of services are making labor gain power again. Those individuals who provide the service for these apps are able to do contract work steadily. They are supported by the larger companies who have created the platforms that provide a constant demand for service and therefore, a sense of job security.

But the sharing (or gig) economy goes beyond the people who earn money by turning their personal car into a taxi service on the weekends; it has extended out to specialized fields as well. Sites like Fiverr and Scripted are platforms for freelance writers and creatives to get gigs from companies looking for someone to complete a small project. Apps like Pager connect people with doctors in only a few clicks. Health coaches and therapists can find clients via Rise or Ginger.io.Technology has made it easier than ever for specialists to tap into the demand for their services and make a living as personal contractors.

The digital age has also separated location from work. Most work can be done remotely so independent contractors have access to short term projects all over the world without having to be present in a specific location. This flexibility makes it easier to make a living working on short term projects when the opportunities expand beyond an individual’s immediate location. And this benefit goes two ways; it’s become increasingly simple for companies to find the best person for a job when you can hire beyond your region. One of the biggest catalysts in this shift is surely the fragile state of the job market for the past several years. With a decreasing number of jobs and an increasing number of qualified candidates, good jobs are harder to come by and are often lower paying than they should be. The benefits of working at a corporation become less appealing when the salary is so low. Because of this, many people have found more success as self-employed personal contractors. Additionally, workers are now able to select jobs that they’re interested in rather than settling for a position in a desperate attempt to gain employment in a competitive job market.

Of course with any economic and workplace changes, there are positive and negative effects. One of the most obvious positives is that people have a stronger sense of ownership of their work. Workers are also no longer tied to a larger system that devalues them as an individual. And thirdly, they have flexibility in their schedule which makes raising a family and pursuing personal interests much easier, resulting in a happier, more fulfilling lifestyle. When people pick up gigs in the field they have chosen to be in, we start to see higher quality specialists who are dedicated to their work, rather than a drone that clocks in from 9:00–5:00 just to get a paycheck. One of the largest negatives that government officials have begun speaking about is that fewer people receive the benefits that working for a large company can offer. Health insurance, a retirement plan and paid leave are much more expensive and difficult to attain when self-employed. Hillary Clintonstated that “the gig economy creates exciting opportunities but also raises questions about workplace protection”. Professionals whose primary employment is based on the gig economy have a lost sense of job security. Being an entrepreneur or freelancer requires a constant state of hustling for work and when things slow down, there is no severance package waiting for you. Fortunately technology like TaskRabbit, Etsy and all the others aforementioned provide platforms with a steady demand for service. But with so many others competing to get gigs on these platforms, competition can be fierce and steady work can be hard to achieve.

So is the gig economy a good or a bad thing for the economy and for the individuals in the workforce? Like any major changes, there are benefits as well as drawbacks. For those shifting from corporate life to self-employment, there are many lifestyle benefits that may outweigh the job security a larger system can offer. But is that day to day freedom worth losing the benefits gained from being part of a system? It’s still unclear how the gig economy will affect the government and our country’s economic stability long term, but we will see how it changes the working world as it continues to evolve.