Nowadays, the way people work and earn a living has faced a significant shift. The gig economy, characterized by temporary and flexible employment, has transformed the traditional job market due to its rising. Currently, a lot of individuals have embraced freelancing as an applicable career option. At the same time, lots of industries and companies have also been significantly benefiting from hiring independent workers. This article will delve into the rise of the gig economy, exploring its impact on the job market and discussing its positive and negative effects.
What is the Gig Economy?
Definition of the Gig Economy(Investopedia, 2024)
The Gig Economy refers to a labor market dominated by laborers who hold short-term contracts and freelance work instead of permanent employment. Currently, various digital platforms and technological advancements allow workers to set their own schedules and work remotely. This allows people with diverse talents to pursue their passions.
Positive Impacts of the Gig Economy
The gig economy allows freelancers to have the flexibility of working on multiple projects at once. Moreover, it will enable them to collaborate with clients and diversify their income streams. The Gig Economy's flexibility will enable individuals to strike a balance between work and life, allowing them to find jobs that cater to personal commitment and take control over their careers. As shown in the image below, it is stated that freelancers weekly usually would work for 38.78%, unlike the freelancers, around 38.78% of the workers would usually work for 41-50 hours (Kolmar, 2023). It is stated that signed companies usually have workers work more than 64 hours. In addition, it has also provided opportunities to those who are seeking alternative work arrangements, such as students, parents and retired members, allowing people from different collectives to have the chance to earn money.
USA Freelancer Average Weekly Working Hours (Kolmar, 2023)
The Gig economy also allows individuals to improve their abilities and create business opportunities. Companies from different industries could tap into a global talent pool and access specialized skills on demand without needing full-time jobs. The flexibility allows enterprises to scale their operations quickly and adapt to market fluctuations, allowing them to be competitive. Moreover, by hiring freelancers, companies can reduce the overhead costs associated with traditional employment, such as office space and benefits packages (Santosh G, 2024).
Negative Impacts of the Gig Economy
Freelancers often experience income volatility and usually face the problem of a lack of social safety nets and difficulties in securing loans or mortgages due to irregular income. In addition, the gig economy also raises issues such as labor rights, fair compensation, and the classification of workers. For instance, it has been reported that companies from across countries use their local law system to restrict the freelancers’ commission or even avoid payment.
Challenges Faced by Freelancers in Absence of Traditional Benefit(The, 2024)
In addition, it has been reported that freelancers receive less healthcare assurance. In China, the government tends to allow workers who have stabilized jobs to pay less or not pay at all. However, the government usually does not discount freelancers when they go to hospitals and clinics (China Labour Bulletin, 2019).
Conclusion
Overall, the appearance of the gig economy has transformed the job market, as it has offered individuals increased flexibility and autonomy while providing businesses with access to diverse talent pools. However, some challenges need to be addressed to ensure a fair and inclusive future of work, as a lot of governmental systems and financial institutions tend to avoid getting in touch with freelancers. As the gig economy continues to expand, the stakeholders need to collaborate and foster an environment that supports freelancers' needs and the job market's long-term sustainability.
Reference List
China Labour Bulletin. (2019). Decent healthcare is still a distant dream for most workers in
China. [online] Available at: https://clb.org.hk/en/content/decent-healthcare-still-distant-dream-most-workers-china [Accessed 13 May 2024].
Investopedia. (2024). Gig Economy: Definition, Factors Behind It, and Criticism. [online] Available at: https://www.investopedia.com/terms/g/gig-economy.asp [Accessed 13 May 2024].
Kolmar, C. (2023). 23+ Essential Gig Economy Statistics [2023]: Definitions, Facts, And Trends On Gig Work. [online] Zippia. Available at: https://www.zippia.com/advice/gig-economy-statistics/ [Accessed 13 May 2024].
Linkedin.com. (2024). LinkedIn. [online] Available at: https://www.linkedin.com/pulse/gig-economy-future-work-challenges-opportunities-santosh-g-vxwyc/ [Accessed 13 May 2024].
The, I. (2024). Challenges Faced By Freelancers In The Gig Economy - FasterCapital. [online] FasterCapital. Available at: https://fastercapital.com/topics/challenges-faced-by-freelancers-in-the-gig-economy.html [Accessed 13 May 2024].
Comments