September 28, 2018
Gig economy workers are workers who are connected to customers through an online platform or other electronic media. They include drivers transporting people or goods as well as those performing a range of tasks from dog walking to creating PowerPoint presentations. The general perception is that this is a growing share of employment in the United States.
There was much surprise, therefore, when the Bureau of Labor Statistics (BLS) earlier this year reported that just 10.1 percent of workers were in alternative work arrangements as their main job in 2017 — about the same share of the workforce as in 2005. Even more surprising to many pundits, the share of independent contractors — which includes gig economy workers — declined over the 12 year period, from 7.4 percent of workers to 6.9 percent.
Many observers attributed these surprisingly small numbers to the fact that the main results in the Contingent Worker Supplement only count workers for whom gig work is their main job. It does not count all the gig workers who combine this work with another main job. A recent report from JP Morgan Chase found that gig work has increased since 2014, driven by growth among drivers. However, the study also found that most workers engage in gig work only sporadically — working at gig jobs in three or fewer months of the year. Just 9.1 to 12.5 percent of gig workers engaged in this work for 10 to 12 months. Additionally, most gig workers, according to this report, also generate income from other sources.
To address workers’ use of gig jobs as a supplement to a main job, BLS added four new questions to the 2017 Contingent Worker Supplement. These questions were designed to measure electronically mediated employment. BLS defines this as “short jobs or tasks that workers find through mobile apps that both connect them with customers and arrange payment for the tasks”. The work can be done in person or online.
The main finding is that, despite all the hype, gig work is an extremely small share of employment. Just 1.6 million workers — 1.0 percent of total employment — were engaged in electronically mediated work in 2017. This includes all people who did electronically mediated work, whether for their main job, a second job, or additional work for pay. This included 0.6 percent who worked in person and 0.5 percent online.
In person gig work was concentrated in the transportation and utilities industry, where 4.5 percent of employment was electronically mediated in 2017. In the occupational category of transportation and materials moving, 3.8 percent of workers’ employment was electronically mediated. Among those who did their tasks entirely online, 51.2 percent were in professional and business services industry. The share in other industries and occupations is far smaller.
Not surprisingly, survey respondents had difficulty understanding questions about their use of online platforms, which are widely used by consumers for shopping or gathering information on a range of topics. BLS economists found it necessary to use other information in the monthly household employment survey, the Current Population Survey, and in the Contingent Worker Supplement to that survey in order to identify respondents that used electronic platforms to obtain work. This adds some uncertainty to these results.
Further, their additional questions designed to measure those who did electronically mediated work for a second job or for additional work for pay are unreliable despite their potential relevance. It is unlikely, however, that a significant share of the workforce works in the gig economy.