The Gig Economy: An Increasingly Popular and Better Way to Work

As some­one who has worked as a tech­ni­cal writ­ing con­sul­tant for almost 10 years, I’m very inter­est­ed in the emerg­ing gig economy.

Here’s one def­i­n­i­tion of this new way of work­ing: “A gig econ­o­my is a free mar­ket sys­tem in which tem­po­rary posi­tions are com­mon and orga­ni­za­tions con­tract with inde­pen­dent work­ers for short-term engage­ments. The cur­rent real­i­ty is that peo­ple tend to change jobs sev­er­al times through­out their work­ing lives; the gig econ­o­my can be seen as an evo­lu­tion of that trend.”

Cana­di­an econ­o­mist Lin­da Nazareth recent­ly wrote a book called Work Is Not a Place: Our Lives and Our Orga­ni­za­tions in the Post-Jobs Econ­o­my. She paints a pic­ture of the chang­ing labour force in which work­ing as a free agent is becom­ing more and more common.

• A study comes from Intu­it (the com­pa­ny that devel­ops account­ing soft­ware, such as Tur­b­o­Tax) esti­mat­ed that 34 per­cent of the U.S. work­force is engaged in some form of inde­pen­dent work. It fore­casts that 43 per­cent of the U.S. labour force will be per­form­ing some sort of con­tract work by 2020.
• Anoth­er study com­plet­ed by man­age­ment con­sult­ing firm McK­in­sey & Com­pa­ny found that up to 162 mil­lion peo­ple in Europe and the U.S. were engaged in some form of inde­pen­dent work.
• In Cana­da, Rand­stad Cana­da esti­mates that 20 to 30 per­cent of Canada’s work­force con­sists of inde­pen­dent con­trac­tors, on-demand work­ers, and remote workers.

But with con­tract work on the rise, it doesn’t mean that indi­vid­u­als always want to work that way. Nazareth says there are four types of contractors:

• Free agents: those who active­ly choose inde­pen­dent work and derive their pri­ma­ry income from it.
• Casu­al earn­ers: those who use inde­pen­dent work for sup­ple­men­tal income and do so by choice.
• Reluc­tants: those who make their pri­ma­ry liv­ing from inde­pen­dent work but would pre­fer tra­di­tion­al jobs.
• Finan­cial­ly strapped: those who do sup­ple­men­tal and inde­pen­dent work out of necessity.

[pullquote]…this idea that some­one can have a sta­ble job that lasts for years is an old par­a­digm and is often just wish­ful think­ing. [/pullquote]

As some­one who prefers to work as a free agent, I’ve come across a lot of con­sul­tants who say they would be more than hap­py to become an employ­ee again. Many say they want the health ben­e­fits and the promise of a sta­ble work envi­ron­ment. But in the pri­vate sec­tor, this idea that some­one can have a sta­ble job that lasts for years is an old par­a­digm and is often just wish­ful think­ing. I’ve worked at mul­ti­ple high-tech com­pa­nies over the years that swift­ly jet­ti­son employ­ees when cor­po­rate earn­ings fal­ter. So much for stability.

When you sign up for being a con­sul­tant, you know and expect that your con­tract will end at some point. Every six to 18 months, my con­tract typ­i­cal­ly ramps down and I start look­ing for the next oppor­tu­ni­ty. Yes, it can be stress­ful and dis­con­cert­ing if you don’t have a new gig lined up. But, in gen­er­al, I’ve been con­sis­tent­ly work­ing for almost a decade.

If you can man­age to line up one con­tract after the next, con­trac­tors enjoy high­er wages, sig­nif­i­cant­ly low­er tax­es than employ­ees in Cana­da, a mul­ti­tude of tax write-offs not avail­able to employ­ees, and more vari­ety in their work. In addi­tion, accord­ing to some stud­ies, con­trac­tors may be hap­pi­er than employ­ees. Here’s an excerpt from Nazareth’s book: “Study after study finds that free­lancers are hap­pi­er than those in tra­di­tion­al jobs, with McK­in­sey report­ing that as many as 97 per­cent of con­trac­tors are much hap­pi­er than their per­ma­nent coun­ter­parts. These find­ings are backed up by [researchers] Katz and Krueger: they found that, as of 2015, 84 per­cent of inde­pen­dent con­trac­tors pre­ferred to work for themselves…”

Not such a bad way to work.