Gigging into the future
The way we work today is totally different from the way we used to get things done. Our parents and grandparents would not recognize the world we live in, never mind be able to navigate it. As we move towards the middle of 2021, we are seeing the after-effects of the global pandemic and how it has accelerated our move to virtual office work and a gig economy of remote workers.
Traveling into a workplace or office where we'll have chats around the water cooler is going to be a thing of the past for a lot of people in the very near future.
In real terms, freelance workforce growth has increased three times faster than any other part of the American workforce since 2014 and the trend is set to grow even more. Studies show that close to 60 million Americans are freelancing already. That means at least 36 percent of the U.S. workforce are using the gig economy to get by, rather than having one specific job at one place and relying on a single source of income over the years. This is giving many workers in our economy an opportunity to forge their own destinies as we power through this new decade and enter into a brave new world after Covid.
Independent contractors and freelancers were previously thought to be a sign that a business couldn’t afford to hire full-time workers. Or it was a start-up trying to get their feet on the ground and get up and running. That is no longer the case at all.
Large and highly respected firms are also utilizing this approach in today's technology-assisted world. Fortune 500 companies are hiring outside contractors to handle the non-core side of their operations.
Departments that would have been handled in-house, like Marketing, Public Relations, or even Human Resources are being unloaded onto gig workers. This gives a large corporation the freedom to completely focus on their core business and principles rather than having full-time employees that are all under the same roof.
The gig economy is re-shaping the way we think about working and business in general. Some businesses are now totally virtual. Reports state that there are now around 170 virtual companies operating in America. In 2014 there were only 26 companies that had no real office space and employees who checked in online rather than attending a brick and mortar workplace.
While the United States gig economy grows, Europe seems to be backtracking and adding a socialist angle to their freelance workforce. The Spanish now class freelance workers the same as contracted employees meaning they get the same benefits as someone who works in any other company. Essentially, you could deliver for an online app-based company like Postmates (or the Spanish version named GLOVO) and get the same benefits as someone who works in a factory or store.
Even the UK, though they have left the European Union after Brexit, has shifted the same way. Uber lost a case in the United Kingdom Supreme Court which has forced the ride-hailing company to class their drivers as workers, which in turn meant that the “employees” are entitled to minimum wage and pension plans as well as paid vacation time.
It seems the gig economy is here to stay and getting bigger all the time.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC