The Emerging Gig Economy

The technology-aided trend to freelance instead of staying at a full-time, salaried job is already providing economically disruptive and promises to be more so in the future.

The technology-aided trend to freelance instead of staying at a full-time, salaried job is already providing economically disruptive and promises to be more so in the future.

Trends in the so-called "gig economy" may confound our notions of full- and part-time work. We tend to lionize full-time work, even though increasing numbers of workers say they prefer part-time jobs. That growing preference may actually obscure what's really going on – a wave of small-scale entrepreneurship where people or small groups compete for gigs.

Freelancing has been enabled by technology and the rise of companies that facilitate connections. Thumbtack arranges introductions between a freelancer and a job. Etsy provides an online marketplace for home-based, individual jewelry, clothing and accessory makers. Elance posts one-off opportunities that freelancers can choose to chase.

The gig economy includes on-demand services, such as Munchery in San Francisco that employs chefs and drivers to make and deliver meals of your choice. The gig economy is a close cousin to the sharing economy where technology allows people to provide services such as ride sharing or room rentals through online companies that don't own cars or beds.

These new "jobs" defy classification in typical jobs reports, where full-time work is the holy grail and part-time work is an indicator of a weak economy. The gig and sharing economies are what economists call "disruptive."

As reported by The New York Times, politicians are flocking to meet with this new group of cyber pioneers to understand the nuances of the gig economy. Meanwhile, regulators are trying to parse whether gig and sharing economy workers – along with workers at franchise operations – are employees or independent contractors. That could make a difference on a range of issues from the minimum wage to personal liability.

The gig economy may be its own response to economic disruption. The job market these days is less stable and long-term, so instead of always being on the lookout for a better job, why not set up shop at home and look for projects or business opportunities?

Other factors also come into play, such as the need to provide care for a child or an elderly parent. Working from home can save a lot of money and heartache without sacrificing the ability to make a buck. For some, the gig economy allows a person to leverage a skill or talent for profit that is undervalued in the traditional job market.

There is an economic irony to these legions of freelancers. They may in the aggregate succeed in removing at least some of the economic power from industrial and commercial titans. Freelancers sacrifice a salaried job in return for pursuing independent work that suits them and their life circumstances. They give up guaranteed pay, but also built-in expenses such as commuting, child care and time away from home.

Small business owners can relate to this kind of risk-taking, which can result in rewards or sorrows. Apparently, many Americans think the risk is worth it, especially in light of the risks of getting and keeping the perfect job.

The gig economy is likely to challenge already overwhelmed educators on how to prepare a new generation for the world of work. It also will call into question our social safety net that was largely designed to work like a seat belt for a full-time worker.