Old people powering gig economy

Much has been written about the rise of the gig economy, sharing economy, on-demand economy, 1099 economy, freelancer economy or whatever you prefer to call it. Some of the claims about its growth have been overstated, and I’ve written several columns trying to debunk them.

But data from economists Lawrence F. Katz’s and Alan B. Krueger’s new paper on “The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015” is for real.

After barely changing between 1995 and 2005, the share of U.S. workers in alternative work arrangements jumped from 10.1 percent in 2005 to 15.8 percent in 2015. That’s a pretty big leap. As Katz and Krueger write, “All of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.”

These arrangements for the most part did not involve work arranged through online gig-economy platforms – only about 0.5 percent of workers “identify customers through an online intermediary,” Katz and Krueger found.

- Advertisement -

The differences between Katz’s and Krueger’s 15.8 percent finding and the higher percentages reported in other surveys mainly have to do with definitions. These different ways of counting aren’t wrong – moonlighters, for example, seem to be a big factor in the online gig economy, and Katz and Krueger miss them by only counting people whose main job involves alternative work arrangements.

It reveals, for instance, that workers ages 55 to 75 and workers with a bachelor’s degree or higher have always (since 1995, at least) been more likely than others to be in alternative work arrangements. Moreover, the 55-plussers are the only age category in the U.S. that has seen its employment-to-population ratio rise over the past two decades.

What this may mean is that the growth of the gig economy is being driven not so much by struggling millennials lining up gigs online as by 60-year-olds working as independent contractors.

What’s not clear is why.

Sometimes the gig economy empowers, sometimes it oppresses. But at least we now know that it really is growing. •

Justin Fox is a Bloomberg View columnist.

No posts to display