Gigs are increasingly becoming the new norm as the world is embracing this modern way of working. The rise of the gig economy can be traced back to late 2007 to 2009 during the Great Recession; a period that marked the general decline in national economies globally. However, It was globally popularized during the Covid-19 pandemic. Governments globally implemented measures to curb the virus, among them quarantine and lockdowns. These measures had a significant impact on the traditional work arrangements. Several companies had to lay off their employees causing individuals to turn to the gig economy as a way of generating income.
What is The Gig Economy
The gig economy provided an avenue for individuals to work remotely and engage in contactless services, such as food delivery and freelancing opportunities. So what exactly is the gig economy? Characterized by short-term contracts and freelancing, the gig economy refers to a labor market whereby individuals engage in temporary, flexible, and on-demand jobs, typically facilitated through online platforms or apps. These jobs otherwise known as gigs or independent contracts have created an avenue for remote work. Some of the platforms that serve as intermediaries for gigs include Up- Work, Fiverr, Uber Lyft, Freelancer, and Uber Eats among others.
Characteristics of The Gig Economy.
To comprehend the concept of the gig economy, let us delve into the factors or characteristics that make the gig economy unique; the first on the chart being flexibility. Achieving work-life balance is often a hard task as it calls for a high level of organizational skills. The gig economy has given individuals the power to create a work-life balance by giving them the freedom to choose when, where and the amount of work they are comfortable with. In other words, flexible jobs. Individuals can set their work schedules and take on multiple gigs earning them more money.
Digital platforms are another remarkable characteristic of the gig economy. Technology has revolutionized the gig economy. Gig workers often find their jobs on online platforms where algorithms match workers with jobs and facilitate transactions. Interaction with clients is also online and payments are facilitated once a gig is complete. This means that gigs do not come with a monthly salary and benefits of traditional jobs, bringing us to another characteristic; independent contractor status.
The term Independent contractor in the gig economy is derived from the fact that entities are contracted to provide their services to another entity hence they have to be accountable for their taxes, insurance, health care, and other benefits that are common in traditional employment such as retirement plans and paid time off. They also have the flexibility of working part-time as they take on other gigs to earn more.
Gig work is task-based or project-oriented. This means that some of the rules to projects apply. Individuals are hired to complete a task within stipulated deadlines. The task also has to be done effectively for the transaction to be carried out. Companies now have the opportunity to scale up or downsize their workforce based on demand.
Diversity attracts a lot of benefits. If you are worried about problems that are typically associated with the traditional workspace, worry less. The gig industry has a diverse workforce therefore, problems such as favoritism and hierarchical structures are not common. The gig economy attracts a diverse range of individuals from various backgrounds, cultures, and skill sets fostering innovation, creativity, and fresh approaches to problem-solving.
The gig economy has also created career advancement opportunities. A secret to gig work is that individuals market themselves. The quality of your work earns you a reputation as a professional in a specific field. This has enabled many to find their niche and specialize in a specific area. These gigs can be used as a portfolio in one's resume. Additionally, the gig economy has provided individuals the flexibility to pursue various gigs, explore different industries, and develop a versatile skill set. Gig workers can expand their knowledge, gain diverse experiences, and potentially open doors to new career paths.
Challenges of the Gig Economy
There are two sides to a coin. While the gig economy has several benefits, it also presents challenges and concerns. They include:
Income Volatility
Unlike traditional employment, gig workers lack the stability that comes with a monthly payment. Their income is often irregular due to the fluctuating nature of gigs. Creating a financial plan may become a little bit difficult prompting individuals to have a main job and take on gigs as a side hustle.
Lack of Benefits
Unfortunately, the nature of gigs is independent work meaning individuals have to cater for their benefits. Expenses such as medical bills, taxes, social security, and paid leave are not classified in the gig package. The burden lies on the gig workers to independently cater for these benefits which is expensive.
Job Insecurity
A downside to the gig economy is that you are always looking for the next job. There is no guarantee of a steady stream of work especially because the tasks are bid on a competitive basis. This may result in stress that can negatively impact one's health.
Limited Worker Protection
The comparative lack of legal safeguards for gig economy workers compared to traditional employees potentially exposes them to an array of issues surrounding labor laws and regulatory compliance that need addressing. Inadequate protections against discriminatory treatment coupled with limitations on workers' rights and discrepancies in labor laws make up the main concerns associated with these challenges.
The emergence of the gig economy has sparked debates and discussions about labor laws, worker protection, and regulations. Policymakers are looking for methods to strike a balance between encouraging innovation and preserving the rights and well-being of gig workers.
As the gig economy continues to reshape traditional employment structures, it is critical to address the benefits and challenges that it presents. We can establish a more equitable and sustainable gig economy by assuring fair wages, worker rights, and access to benefits. Furthermore, encouraging stakeholder interaction and adjusting rules to accommodate the special demands of gig workers will pave the road for a happy coexistence of gig labor and traditional employment, benefiting the entire workforce.
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