Investment

4 Major Trends Every Gig Worker Should Expect in the 2021 Economy

gig economy 2021 final

As a employees author, I cowl traits in facet gigs, app-based work and odd jobs, collectively known as “the gig financial system.” These traits are risky throughout a superb 12 months, and 2020 was something however a superb 12 months.

Final 12 months, I wrote a similar article about what to look at within the gig financial system in 2020. And I’ll be the primary to inform you I obtained some stuff laughably mistaken. Nobody might have predicted a pandemic that steamrolled our financial system.

However as issues inch again to some sense of normalcy, there are a number of traits that we are able to moderately count on in 2021. Right here’s what I’ll be watching.

1. An General Growth in Gig Work

The gig financial system ballooned like by no means earlier than in 2020.

In line with an annual survey commissioned by Upwork, the freelance financial system (together with gig work like ridesharing in addition to skilled freelance providers) soared to $1.2 trillion this 12 months — a 22% enhance from 2019.

On its face, which may sound like a fantastic factor, however it’s extra sophisticated. As an alternative of breaking our 9-to-5 chains, gig work has as a substitute grow to be a significant security internet. Gigs had been there for hundreds of thousands of People when conventional jobs weren’t.

So when the gig financial system sees large positive factors prefer it did this 12 months, that might be an indicator that the normal financial system is tanking and forcing individuals to select up second or third jobs to get by.

These positive factors weren’t distributed evenly, both. Much like the normal financial system, occasions and entertainment-related sectors shrunk significantly, whereas supply and e-commerce shined. With a vaccine rolling out and native economies creaking again open, it’s probably these discrepancies will begin to even out within the coming 12 months.

The general job market, nonetheless, will take for much longer to get better. Some economists predict issues received’t be enterprise as common till 2024.

In the intervening time, gig work will stay a makeshift security internet and proceed rising in 2021 and past.

2. Aspect Gigs — With out the ‘Aspect’ Half

In an ideal financial system, you wouldn’t want a facet gig as a result of your day job can be secure and would pay you nicely sufficient to cowl a snug lifestyle.

In an imperfect however functioning financial system (assume U.S. circa 2019), you may want a facet gig that will help you meet a objective. You could have a stable day job however possibly you wish to begin Ubering briefly that will help you repay your pupil loans or bank cards. Higher but, you launch a facet gig to hone new abilities that may translate into a greater job — and even your personal enterprise. (That is actually the very best side-gig state of affairs. We extremely suggest creating a similar “exit plan” for your side gig earlier than taking up extra work.)

Then there’s the pandemic financial system. Cue the unhappy trombone. It has grow to be more and more widespread for individuals to cobble collectively their complete revenue off a smattering of various gigs. There’s no essential gig or job. So none of them are technically “facet” gigs.

In an interview with The Penny Hoarder earlier within the pandemic, Shiftsmart President Patrick Brandt, mentioned he sees this gig financial system development taking part in out on his app, which offers a free service that pairs customers with native or distant gig work and pays them per shift.

“Individuals who had been simply utilizing us for [side money] at the moment are utilizing us to stack shifts throughout a number of alternatives to satisfy their complete revenue,” he mentioned.

Till the normal job market recovers, extra individuals will probably be compelled into an identical scenario.

3. A Coming Cliff for Some Gig Staff

For the primary time ever in 2020, individuals with out ample work historical past — together with impartial contractors and gig staff — might qualify for unemployment advantages by a brand new program referred to as Pandemic Unemployment Assistance.

This system was created by the $2.2 trillion CARES Act again in March 2020. It has been a lifeline for hundreds of thousands of People who’re out of labor as a result of pandemic however don’t meet the necessities for normal unemployment insurance coverage. The December stimulus bundle prolonged PUA into March 2021. Plus, it rebooted the improved weekly cost program often called Pandemic Emergency Unemployment Compensation (PEUC) — although this time as a $300 weekly enhance as a substitute of the unique $600.

Learn extra on the extended unemployment benefits included in the second stimulus package.

All excellent news to date. However the December stimulus bundle additionally included some stipulations which may have an effect on your advantages in the event you’re a gig employee.

By the tip of March 2021, PUA recipients should submit paperwork (revenue statements, ledgers, 1099s and extra) to show their eligibility for this system. Offering such documentation could show troublesome for even probably the most earnest bookkeeping gig staff, as a complete file of 1099 revenue is notoriously powerful to take care of.

Fail to produce the correct data, and PUA recipients could also be requested to pay again the unemployment cash.

Beforehand, PUA recipients might self-certify that they had been out of labor on account of coronavirus-related causes — primarily pinky-promising beneath penalty of perjury.

Moreover, the December stimulus bundle was a lot smaller in scope than the CARES Act. It offers solely 11 extra weeks of unemployment advantages. The financial scenario is unlikely to resolve itself inside that time-frame, so jobless people could as soon as once more face their advantages being reduce off in March 2021 until there’s a third stimulus bundle.

4. Ripple Results of a New Gig Economic system Rule in California

One thing occurred this 12 months that has the potential to alter the character of the gig financial system. I’m not speaking concerning the pandemic.

After an extended and costly marketing campaign that pitted some gig staff, unions and worker-rights advocates towards Uber, Lyft, DoorDash and different main gig corporations, a poll measure referred to as Proposition 22 handed on Election Day in California. Gig corporations spent a collective $200 million in assist of this new rule that impacts their gig staff and impartial contractors.

Why would they spend a lot cash lobbying in assist of this rule? Properly, if Prop 22 hadn’t handed, Uber, Lyft and different corporations that depend on impartial contractors would have needed to reclassify their staff as workers. Amongst many modifications, they’d’ve been compelled to stick to minimal wage legal guidelines, grant advantages like medical insurance, pay payroll taxes and supply staff compensation.

Prop 22 is actually a compromise. It doesn’t provide gig staff with the complete advantages of W-2 employment, however it offers greater than they’d beforehand. Uber CEO Dara Khosrowshahi refers to it as a “third means.” It doesn’t grant a minimal wage, however it does give gig staff an “earnings assure” and subsidizes medical insurance prices in the event that they recurrently work a sure variety of hours.

Why this issues is as a result of the gig employee classification concern isn’t contained to California. It’s sprouted up in Illinois and New York already. And Khosrowshahi has overtly acknowledged that he sees this “third means” as a nationwide resolution to the controversy, which is bound to engulf much more states within the 12 months to come back.

Adam Hardy is a employees author at The Penny Hoarder. He covers the gig financial system, distant work and different distinctive methods to make cash. Learn his ​latest articles here, or say hello on Twitter @hardyjournalism.






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