Has The Gig Economy Been Redefined?

By: First Union | Date:

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Has The Gig Economy Been Redefined?

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Following the Great Recession of 2008, we began to see the real emergence of the gig economy. Since then, it's only grown larger and more robust. And yet also since then, many experts have suggested that in some ways it is broken and needs help. First off, the word gig in and of itself is flawed. For many, their life's work and business is no longer just a gig but rather a viable way to make a living. And that is why so many fell through the cracks in light of the relief efforts associated with the pandemic because people fail to see "gig" work as permanent.

Of course, the essential laborers, those employees of shops, drivers, and frontline workers took the spotlight as their heroic efforts helped this country make it through. But what we also saw was that for those participants of the gig economy or independent economy, there was a serious lack of resources available. Things such as hazard pay, sick leave, and unemployment benefits were largely nonexistent for these workers. And many consequently, struggled far more than they should've had to.

One of the things that the pandemic demonstrated was that as a whole the US needs to redefine how we address the needs of freelance workers before something like this happens again.

Account For People

By and large, when talking about the gig economy, we're talking about a people-driven marketplace. Certainly, the technology and other such resources used also define this space, but by and large, the individuals are the ones making things go. The technology developed moving forward should account for the human component more so than anything else.

Various platforms for instance have been designed which enable freelance workers to set their schedules, their prices and therein build relationships with prospective clients. From a practical standpoint, this enables workers to decide when they want to work, how much work they can take on, and in time of crisis, if rates need to be adjusted.

Beyond just addressing technological needs, we need to reclassify freelance work overall. As they are 1099 workers, they don't get the same protections as W2 employees and this left many without access to unemployment benefits when they were truly needed. Potentially finding a way to reclassify freelance work so that there are built-in protections is without question an important part of the process moving forward.

In 2008 we saw companies such as Uber, Lyft, and Airbnb come storming onto the scene. Since then we've learned so much more about the independent economy and subsequently, we've come to rely on it perhaps more so now than ever before. It is a facet of business and industry that is only going to grow as we move forward from this, and so we need to figure out how to ensure that such workers are protected.

First Union Lending is here to help. If your business has been adversely impacted, we have funding solutions that may enable you to get back on track. Call today!

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