“Gig” Work Not Supplying the Income Americans Need

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Is “gig” work the next wave for American workers? Some experts say no.

The Opportunity

Many websites and apps now offer American workers the opportunity to earn an income outside of normal employment. It might be giving someone a ride through Uber or Lyft. It might be moving furniture or doing light home repair through TaskRabbit. Other skilled workers make house calls through YourMechanic. And when you don’t want to leave your house, you can sign up with Upwork or Freelancer to perform writing, coding, graphic design, and virtual assistant work.

Some sites determine how much you can charge clients. Others, such as freelancing on Upwork, allow you to negotiate with potential clients. The facilitating site then takes a percentage of how much they pay you.

The Catch

These jobs sound like a great way to earn extra income or even transition into a full-time career. Many, however, find that these opportunities don’t provide the money they need.

The Trend

JPMorgan Chase recently released a report on the gig economy. The financial institution found that the average amount gig workers earned dropped over the last two years. The decline in income led many to go back to traditional employers. Of those who work on a gig basis, the majority only does so for a few months out of the year.

The Conclusion

What led to the rise of the gig economy? When Uber, for instance, began in 2009, many Americans were still recovering from the 2008 economic recession. They were out of work and found Uber to be an opportunity. The rise in people turning to nontraditional jobs led to predictions that most Americans would be working on such a basis in the near future.

Upwork and the Freelancers Union recently published a report claiming that the majority of the American workforce would be freelancing by 2027.

The study by JPMorgan Chase found that Uber and Lyft drivers spend an average of three months per year working for the service. It’s reasonable to conclude that many Americans do and will supplement their income with gig work, but that it won’t replace the traditional economy.

Fiona Grieg is the director of consumer research for JPMorgan Chase. She said, “People aren’t relying on platforms for their primary source of income.”