VOL. 133 | NO. 4 | Thursday, January 4, 2018
Outlook Bright for Memphis' Gig Economy in ’18
By Michael Waddell
Whether by choice or necessity, the number of people working freelance and contract jobs in Memphis and nationwide is increasing as the “gig economy” booms. Employers are saving money by not keeping as many employees on full-time or with benefits, while gig workers have added freedom and flexibility.
“With the gig economy, we’ve got a very healthy temporary workforce here,” said Robbin Hutton, attorney and partner with Ford Harrison. “I think we are trending toward seeing more and more of it as employers are supplementing their regular workforce with the employees who are willing to freelance or just be available when they need to be.”
There are an estimated 55 million freelancers in the U.S., making up roughly 35 percent of the country’s workforce and earning in excess of $1 trillion in 2016. Some estimate that gig workers could make up as much as 50 percent of the U.S. workforce by as early as 2019. At its current growth rate, a 2017 study by Edelman Intelligence concluded that the majority of the U.S. workforce will be freelancers by 2027.
“The attachment of workers to employers in traditional ways is declining,” said University of Memphis professor of economics Dr. John E. Gnuschke, director of the Sparks Bureau of Business and Economic Research and the Center for Manpower Studies. “Many of the changes are associated with the desire of employers to minimize labor costs including benefits. Contract and part-time jobs are an outcome of the changes taking place in the labor market and not a choice that individual workers make because they want to work part-time.”
From 2004 through 2014, independent contracting employment in the U.S. rose from 12 percent to 18 percent, according to CareerCast.com. On a national level, careers that are growing with the gig economy include Uber and Lyft drivers, web developers, occupational therapists, graphic designers and other types of multimedia work like videography, animation and podcasting. The services provided by translators and interpreters also grew during 2017.
“We’re also seeing growth of this type of position with industrial, as far as warehouse workers, and I think that’s where we’re going to continue to see it,” said Hutton, adding that gig workers generally earn less than $30,000 per year and 80 percent of them work less than 40 hours a week.
According to a December 2017 survey by Nana.io, a platform connecting full-time and part-time technicians with professional home service jobs, Amazon Flex (which starts at $18 to $25 per hour) is 2018’s company of choice.
Topping the list of what gig workers want is caring employers, stability, and a good work environment. Two out of three gig workers want better pay and more hours, and many desire things offered in full-time positions like benefits, training and opportunities for advancement.
Hutton points out that while years ago much of the gig economy flowed through temporary agencies, today that has been replaced with social media and mobile apps.
Some people are adding a side gig or ditching their full-time job altogether.
“We’re seeing a little bit of both, especially with the millennials,” Hutton said. “They have the flexibility to take the assignments and work when they want to.”
Graphic artists, creative writers and nurses are a few careers that are experiencing more and more freelance and/or contract work.
“We haven’t seen as much as San Francisco, Nashville, or Chicago where you have the ability to basically go in and look for anyone to do anything, from putting together Ikea furniture to doing your shopping for you or picking up your dry cleaning,” Hutton said.
Gnuschke sees the gig economy as extremely important in high-tech markets or for individuals that can operate in that environment.
“They are highly competitive and sensitive to changes that are never standing still,” he said.
While the gig economy is booming, wage-and-hour laws have not kept up.
“Employers are still having to look at it in the old terms of: are they independent contractors, are they truly our employees, are they working on a temporary basis?” Hutton said. “So there are still some of those complications. At the end of the day it comes down to who’s going to be responsible for the worker?”
The benefits of working with a freelancer, according to the Freelancers Union, include having a more flexible team in general, that gig workers can often start working immediately, and they offer access to specific niche skills.
The challenges of working with freelancers include a lack of accountability.