What are the Pros and Cons of the Gig Economy for Workers?
This week, the blog will be taking a look at the pros and cons of the “gig economy”. This post will examine the upsides and downsides from the workers’ point of view. The next post will do the same but from the viewpoint of an employer. Before we jump into the upsides of working within the gig economy, in case anyone still isn’t clear on the definition, here’s a post from some years back wherein we answered the question, “What is the Gig Economy”? OK? Now, on to the “pros”.
More independence and freedom are some of the most commonly noted advantages of working the gig economy. To be properly classified as an Independent Contractor or “IC”, the IRS mandates that you must not “act” like a wage-earning employee. This means, that ICs generally enjoy broad flexibility regarding when, where and what they’ll work on. Gig work may also provide means to support passion pursuits. Gig work is a good way for artists/creatives to make a living while dedicating time to make their art and build up a career. Gig work also increases one’s ability to seek out the perfect position, helping to provide at least some income while searching for their desired full-time job.
Increased labor force participation is also a “pro” for workers. The ready access to gigs – whether through placement agencies or online gig platforms – can help keep a worker off unemployment. Gig work lowers the risk of job and income loss by enabling a worker to earn with multiple employers. Further, working on numerous projects for a number of different companies can help a worker expand skillsets and may also expose them to more opportunities than they’d encounter working one full-time role.
Specialization leads to satisfaction. As a gig worker, there is greater opportunity to connect with work in specific areas and you can seek gigs that allow you to do the type of work you do best. In this way, a worker can enjoy higher levels of job satisfaction and avoid the drudgery they find in facets of a full-time job.
On the other hand, there can be a downside to leaving the W2 realm for the gig economy. Here are some clear-eyed concerns to consider.
Less social protection is something many workers point to when asked about the downsides of their experiences as gig workers. It is not news to most that as a gig worker there aren’t typically any of the benefits delivered by a full-time job. There’s no unemployment insurance when your gig dries up. There’s no PTO, sick days, holidays or other perks for most gig workers. Most critically, there is higher risk of remaining financially viable in the absence of a predictable salary.
A heavier administrative and financial burden is also a downside to gig work. Contractors must shoulder their own administrative efforts because there is no HR department to handle these tasks for independents. That means, gig workers are on their own to do their own tax withholding and reporting, any retirement planning and sourcing/funding of healthcare coverage. What’s more, ICs operate without the support of infrastructure in areas like marketing, business development and accounting. As a gig worker, its all on you to find more customers and run your own business. That can be challenging for some.
Isolation and alienation can be problematic for the gig worker. For gig workers like designers, developers or copywriters almost all gig work is performed remotely, and this can be isolating. Lack of onsite workplace relationships can get lonely, but it can also impact on network building. Working in the absence of roles and communities which anchor identities in onsite workplaces can make it harder to maintain work relationships should a worker return to jobs where they must work together with regular colleagues.
There are other pros and cons to being a gig economy worker and everyone’s situation is different – driven by their own needs, temperament and other factors. nextSource is here to help make the right decisions for workers and employers alike. Let us know how we can help you!