The On-Demand Economy & the Changing Face of the American Workforce
What Is the On-Demand Economy?
The on-demand economy is a new way for people to work and for services to be delivered. It refers to independent contractors who perform a variety of services but are not considered employees. It is also known as the gig economy because the work performed involves short term ‘gigs.’
The concept of the independent contractor is not new, but the growth and diversification of this area is making people stand up and take notice. The range of on-demand jobs is huge and growing. It includes everything from Uber (where people who own a car can become drivers) to the many freelancing platforms (where people offer business services). The On-Demand Economy website illustrates the huge range of on-demand services that are available today.
The on-demand economy gives workers the ability to monetize their assets and skills in non-traditional ways. It also taps into consumer demand, where anything from a ride to the store to a company logo can be ordered up at the snap of a finger.
Who Are the Workers of the On-Demand Economy?
The U.S. government has tried to understand the on-demand economy in the past, but their attempts to research the topic have been criticized. As they try out alternative strategies, a new Intuit survey is shedding some light on this group.
The Intuit survey looked at workers on 11 marketplaces including Deliv, Field Nation, Fiverr, HourlyNerd, MBO Partners, OnForce, Uber, Upwork, Visually, Wonolo, and World Market. They found that the on-demand workers are working the traditional 40 hours per week (40.4 hours per week on average), but they are earning income from a variety of sources including on-demand work, traditional part- or full-time jobs, contracting, consulting, or running a business. Other statistics include:
- On-demand workers span all generations, including Millennials (39 percent), Generation X (36 percent), and Baby Boomers (24 percent).
- 67 percent have some college experience or degree and an additional 20 percent have a graduate or professional degree.
- 63 percent are working on-demand jobs to supplement their income.
In particular, the Intuit study found extremely high satisfaction levels among on-demand workers. 91 percent say they love being able to control where, when and how they work, and 70 percent are satisfied with their work arrangement. However, there are difficulties. On-demand workers cite challenges like not getting enough work, not having predictable income, and not getting paid the amount they feel they deserve.
Will the Government Step In?
Intuit estimates that the on-demand economy will more than double by 2020, when as many as 7.6 million Americans will work these type of jobs. The U.S. government has many questions about this hard-to-measure workforce, particularly what is the scope of the on-demand economy and how should labor laws apply to these modern-day work arrangements?
In particular, the government is contemplating the best way to classify on-demand workers. The independent contractor classification helps keep costs down for businesses but when these workers aren’t considered true employees, they miss out on overtime pay, benefits, and other things that contribute to economic security.
The Bureau of Labor Statistics has recently decided to partner with the Census Bureau by rerunning the Contingent Worker Supplement as part of the May 2017 Current Population Survey. This will help them study and understand the on-demand economy better – but it will not fully answer the classification question, which has so many important angles to consider.
Are we turning into a nation of gig workers? Will the on-demand economy be the new way of earning a paycheck? Is there a better classification than ‘independent contractor’ for these workers? Answers to these questions will likely unfold in the years to come, but for now the story is “to be continued…”