I admit, I was worried about the Gig Economy’s survival a year ago. California’s Gig Economy regulation (AB5) went into effect January 1, 2020. The law rewrote the rules about how Gig workers could be classified, and it was a bad idea from the start. For one thing, it applied only to workers in California—regardless of where the employer is based. It did not apply to workers outside of California even if the employer is based in California. Imagine the chaos as national employers tried to figure out how to manage employees with two different sets of rules.
Aimed at what legislators consider unfair labor practices at Gig platform giants Uber and Lyft, the law had many unintentional consequences (as so many laws do.) It was a job killer for creative workers like writers, tech, and anyone in the film or music industry. Almost every kind of business, from wedding planners to construction companies, relies on contract workers for some of its labor force. Suddenly, companies had to re-think their business plan – or move out of California.
Fortunately, the voters of California understood the problem, and they put Prop 22 on the ballot for November and passed it with more than 58% of the vote. Prop 22 undid some of the most harmful clauses of AB5, a victory for gig workers and the companies that make their work possible. We hope other states that were eying similar legislation will now just let it go.
In March, the COVID-19 pandemic prompted most states to shut down all but essential businesses. Over 80 percent of organizations worldwide made working from home mandatory for their employees for a few weeks, and 44 percent of the U.S. workforce continued working from home for most of the year. People with health concerns stayed home as well. The ability to order supplies, groceries, and restaurant meal delivered to their homes probably saved many lives. And who delivered those supplies, groceries, pizza and Thai food?
According to a survey by Upwork, the Gig economy soared to $1.2 trillion in 2020 — a 22% increase from 2019. Gig work will remain relevant and continue to grow in 2021 and over the next five years. Here’s why.
- People have learned the value of online shopping and delivery, and it may be another year or more before everyone feels safe going into a crowded store. Companies that have invested in technology to serve customers remotely will continue to offer that option, even after everything returns to “normal,” whatever that looks like. Those companies will need Gig workers to continue to serve their remote customers.
- Workers discovered just how fragile the economy was and how easily they could be put out of work. Gig jobs helped them fill gaps in employment and provide income when it was desperately needed.
- Many workers discovered that they preferred working from home, and a good percentage of them, especially white collar professionals, will consider setting up their own side businesses. Nearly half of U.S. workers (45%) report having a side hustle. Gig work provides employment, extra income, and the ability to save money for retirement, to pay down debt, or survive during a period of extended unemployment.
For these reasons, and probably some that haven’t been considered yet, I’m putting my money on the Gig Economy for the foreseeable future.
Did you start doing gig work during 2020? Tell me your story by leaving a comment.