Government Shutdown Sheds Light on Gig Economy

Government Shutdown Sheds Light on Gig Economy

The Gig Economy is getting a spike from federal employees who are financially ambushed by the government shutdown. Due to the shutdown, roughly 380,000 federal employees have been placed on unpaid leave or furloughed, and some of those affected are signing on with companies like Fiverr, Uber, TaskRabbit, or Airbnb for work and remedial income. 

Those supplementing their income with “side jobs” join a group Packaged Facts, in our new report on The Financial Services Market: Targeting Gig Economy Workers (January 2019), classifies as “Side Gig Workers.” Numbering 76 million, these adults have performed at least one of an assortment of occasional work activities or “side jobs” within the past month, such as selling goods or services online or dog walking. They may or may not have a “main job” that serves as the primary employment.

Some may also be working short-term jobs as independent contractors, one of several self-employment categories that Packaged Facts tracks. The share of employed adults working at one-employee companies, including sole proprietors and independent consultants/contractors, rose from 2007 to 2018. While independent contractors are generally considered the core component of Gig Economy workers, broader shifts in employment benefits suggest that a much wider swath of employed adults have been swept up in changing, and often deteriorating, workforce dynamics. Viewed through this broader lens, an estimated 36% of working households (households in which a head of household and/or spouse/partner are employed) are Non-Benefit Workers, without employment benefits, up from 32% in 2007.

While most of Non-Benefit Workers are not classified as independent contractors, they share common traits in the wake of shifts in employment that occurred during and after the Great Recession. Like contractors, these non-benefit workers work strictly for the monetary pay, not including perks such as health insurance or retirement contributions. Jobs without benefits not only imply diminished loyalty to a company or to an employee, they also entail less financial security. Non-benefit workers may file W-2 forms but be more inclined to perceive themselves as contractors for hire. In the end, an increase in the share of jobs without benefits runs counter to traditional employment scenarios, opening the door for emerging, alternative employee-employer working relationships--albeit with the check-writers having an increasingly upper hand.

Federal employees wondering what to do with these newly minted jobs once they are allowed back to work or to collect pay need not fret. They can join the more than 26 million working adults who have second jobs or the 35% of half of employed adults who are Side Gig Workers—and unlike Non-Benefit Workers, these federal employees can go back to positions with lots of perks and benefits (according to our report, government employees are most likely to have employment benefits).

-- by David Morris, senior consultant