Over the past decade, gig work has become increasingly popular, mainly through app-based platforms like Uber and Lyft. However, this option is no longer just extra cash for many; it's now their primary income source.
Despite challenges in this employment modality, such as low wages, this trend continues to seduce many workers as an alternative to face the current economic uncertainty.
But why? Is it lucrative to work for an app in 2023? Here are 10 gig economy statistics that will help you solve the doubt.
How exactly does the gig economy work?
The gig economy has grown significantly since the 2008 financial crisis, bringing a crucial change in the job market. It's reshaped traditional industries, with companies like ride-sharing and property rentals challenging established sectors.
During the pandemic, the demand for gig work shifted due to social distancing, leading to more people taking up delivery roles.
But how many individuals rely on the gig economy today?
1. There are approximately 435 million gig workers worldwide
According to the World Bank, around 435 million gig workers worldwide are seeking flexibility and independence, which sets them apart from regular employees.
The gig worker numbers have significantly increased, as reported by the report, with gig work demand growing by 41% from 2016 to early 2023.
While this is notable, it also sparks concerns among worker advocates. They're worried about the gig economy's lack of job security and employment rights, as gig workers often switch jobs with minimal protections.
2. In 2022, independent workers represented 36% of the U.S. workforce
In 2022, 36% of the U.S. workforce (about 58 million people) consisted of independent workers, a significant increase from 27% in 2016.
Independent workers do jobs like temporary agency work, tutoring, ride-sharing, food delivery, short-term property rentals, creative roles such as acting or writing, and substitute teaching.
3. Gig workers increased by 170% between 2019 and 2021
The impact of the pandemic on specific sectors like leisure and hospitality led more people to turn to gig work for income. That's why gig workers in the U.S. increased by 170% between 2019 and 2021.
Business Insider determined this change in gig workers, from 1.8 million to 4.9 million, by analyzing tax data from 90 gig economy platforms and apps.
Additionally, the demographics of gig workers shifted, becoming younger and more female. In 2021, 44% of transportation and delivery platform workers were female, as highlighted in the report.
4. Around 37% of gig workers in the U.S. belong to Gen Z
In 2022, around 37% of gig workers in the U.S. are between 18 and 24, as revealed by a study from McKinsey.
The main factors that keep them engaged in gig work are flexible hours (55%), higher earning potential (25%), and 10% choosing faster payments as a top incentive to stay.
According to the study, the second-largest group of freelancers comprises millennials aged 25 to 34, representing 35% of the gig workforce.
5. Low- and middle-income countries account for 40% of traffic to gig platforms
Regarding gig platforms, low- and middle-income countries play a significant role, making up 40% of the users. The World Bank found 545 gig platforms in at least 63 countries worldwide.
The report highlights that a substantial 18% of this traffic hails from low- and lower-middle-income countries, driven by places like India, Ukraine, the Philippines, Indonesia, Pakistan, and Nigeria.
Meanwhile, 22% of the traffic originates from upper-middle-income countries, including the Russian Federation, Brazil, Mexico, Belarus, and Türkiye.
5. 63% of workers turn to gig work due to inflation and rising prices
People increasingly become gig workers to respond to inflation and surging prices. According to Bloomberg, in 2023, nearly two-thirds, or 63%, of workers seek gig work to combat the effects of rising costs.
This modality is a crucial source of income, assisting workers in navigating challenging financial periods and striving for financial stability.
7. 53% of gig workers in the U.S. are male, while 47% are female
Gender disparities in the gig economy are evident in the numbers. According to Forbes, 53% of gig workers in the U.S. in 2022 were male, and 47% were female.
These differences become more pronounced when we examine earning potential. Remarkably, 64% of the highest-earning gig workers are male, while 56% of those in the lowest income bracket, earning less than $50,000 a year, are female.
This gender inequality extends beyond income. For instance, a female online gig worker in Latin America earns only 68% of what her male counterparts earn for similar work on a major gig platform.
8. 67% of gig workers in the U.S. consider not having access to group retirement plans as the main disadvantage of their employment situation
According to Forbes, for 67% of gig workers in the U.S., the main disadvantage of their employment situation is the absence of group retirement plans and other benefits.
When asked about the worst aspects of gig work, 65% of respondents cited the 'lack of job security and income predictability.' In comparison, 62% expressed discontent with having to cover their health insurance costs.
9. In 2022, 1 in 7 gig workers earned below the federal minimum wage of $7.25 per hour
In 2022, 1 in 7 gig workers earned less than the federal minimum wage of $7.25 per hour, as a 2022 analysis from the Economic Policy Institute reported.
Moreover, only 38% of gig workers earned between $10 and $14.99 per hour, which is lower than most traditional employees. Even there were cases where 29% of gig workers earned less than their respective state's minimum wage.
10. 49% of gig workers in the U.S. earn under $50,000 a year
According to a recent Forbes study in early 2023, gig workers in the U.S. earn income at varying levels.
Nearly half of them, 49%, make less than $50,000 annually. About 28% fall into the income range of $50,000 to $99,000 annually, while 23% earn between $100,000 and $4 million yearly from their gig work.
Interestingly, the study revealed that gig workers operating independently for longer tended to have higher earnings.
It's worth noting that the individual earning $4 million per year stands as an exceptional statistical outlier.
Summary: Gig Economy Statistics
- There are approximately 435 million gig workers worldwide.
- In 2022, independent workers represented 36% of the U.S. workforce.
- Gig workers increased by 170% between 2019 and 2021.
- Around 37% of gig workers in the U.S. belong to Gen Z.
- Low- and middle-income countries account for 40% of traffic to gig platforms.
- 63% of workers turn to gig work due to inflation and rising prices.
- 53% of gig workers in the U.S. are male, while 47% are female.
- 67% of gig workers in the U.S. consider not having access to group retirement plans as the main disadvantage of their employment situation.
- In 2022, 1 in 7 gig workers earned below the federal minimum wage of $7.25 per hour.
- 49% of gig workers in the U.S. earn under $50,000 a year.
In 2023, the Gig Economy is rapidly changing how people work, expanding three times faster than traditional employment. However, it also faces some challenges.
Many gig workers are turning to app-based platforms because rising inflation makes it harder to cover their expenses. But there are downsides to gig work, like not having a secure job, not knowing how much money you'll make, and gender disparities.
Men dominate the top earners, making up 64% of this group, while women account for 56% of the lowest earners, those making less than $50,000 annually.
Despite those scenarios, the gig economy continues to reshape the American workforce, offering opportunities and challenges. It provides flexibility and extra income, but ensuring workers earn enough and have job security is essential for the future and the well-being of gig workers.
How does the gig economy impact the work culture?
Gig workers are primarily motivated by positive incentives, such as the opportunity to increase their income and take on diverse assignments across various fields. However, it may come with some challenges.
According to reports, 16% of gig workers feel that working independently has enhanced their ability to adapt to changing work culture and technology.
Meanwhile, 20% of gig workers feel out of the loop in a fast-changing work culture, indicating that not all gig workers find it easy to keep up with rapid changes.
Why do gig workers choose this employment model?
According to a McKinsey report, 25.7% of gig workers in the U.S. work independently to support their basic family needs.
This percentage has significantly increased from 14% reported in a 2016 survey, highlighting the growing reliance on gig work for essential financial support.
However, there are other reasons, as 24.9% of gig workers opt for this employment model because it provides flexibility and autonomy in their work arrangements.
Are there any legal actions impacting gig workers' protections?
Yes. Some states in the U.S. are taking legal action to protect gig workers. In June 2023, New York City announced a minimum wage of $17.96 for app food delivery workers to enhance their income.
However, companies like DoorDash, Grubhub, and Uber filed a lawsuit against the city, arguing that the law would have negative consequences for both customers and delivery workers.
- Has ‘Gig Work’ Become a Dirty Word? - The New York Times
- The Gig Economy Comes for Hedge Funds - Bloomberg
- Publication: Working Without Borders: The Promise and Peril of Online Gig Work
- Freelance, side hustles, and gigs: Many more Americans have become independent workers
- The number of people doing gig work on apps like Uber and DoorDash more than doubled during the pandemic
- Gig Work Becomes Primary Source of Income for Majority of Workers, Providing Financial Security Amid Turbulent Economic Times - Bloomberg
- For Most, Working In The Gig Economy Is Not A Stopgap Measure
- Flexibility And Earning Potential, Two Lures Of The Gig Economy
- National survey of gig workers paints a picture of poor working conditions, low pay | Economic Policy Institute
- How To Better Support Gig Workers Through Payment Modernization