This weekend, the Wall Street Journal published an article titled, “Proof of a ‘Gig Economy’ Revolution Is Hard to Find.”
Its authors argue that for all the attention it has received, the share of American workers actually participating in the “gig economy”—driving for Uber or Lyft or picking up jobs, or deriving income from selling products on Etsy—really isn’t that big, and may actually be shrinking.
“Americans are becoming slightly less likely to be self-employed, and less prone to hold multiple jobs,” they write. “Official government data shows around 95% of those who report having jobs are accounted for on the formal payroll of U.S. employers, little changed from a decade ago.”
Two economists have found preliminary evidence this isn’t the case, and that the gig economy labor force’s footprint really is expanding.
Harvard’s Larry Katz and Princeton’s Alan Krueger are currently embarking on research to document the rise of “gig economy” in America. They are not receiving any outside funding.
In an email to Fusion, Katz said two pieces of evidence suggest current measures of self-employment and multiple-job holding are “missing a large part of the gig economy.”
The first is that the share of the employed (and of the adult population) filing a 1099 form, the tax document “gig economy” workers must file, increased in the 2000s, even as standard measures of self-employment declined in the 2000s.
Likewise, the share of individuals filing Schedule C tax forms to report profits and losses for their homegrown businesses is up “substantially” in the 2000s, “even though survey measure of self-employment are down.”
“These discrepancies suggest a growth of ‘gig’ and ‘share’ economy workers who receive 1099 income, file Schedule C forms on their taxes, but don’t answer the standard [government] question as indicating they are self-employed and don’t say they are a multiple job holder,” Katz said.
Other groups have confirmed this: Zen Payroll, a site that tracks the sharing economy, found increases in the share of 1099 workers across many major U.S. metros.
And data from research group EconomicModeling.com show the share of traditional, 9-to-5 workers in the labor force has declined…
…while those who categorize themselves as “miscellaneous proprietors” is climbing.
Meanwhile, in preliminary interviews with “gig economy” workers, Katz said he and Krueger have confirmed that a majority of those who have regular, non-“gig” employment don’t answer that they have “multiple jobs” when asked the standard multiple-jobs question, “even in many cases where they have significant on-line and other non-traditional job income.”
“They do answer about their share, gig, and freelance economy activities when specifically asked about other specific ways they made income,” Katz said. “But many of them do not seem to consider such activities as ‘regular jobs.'”
Indeed, a recent survey found 60 percent of such workers get at least 25 percent of their income from gig economy work.
Katz emphasized that all their findings are preliminary, and that it is too early to say with certainty the exact magnitude of the changes they are finding. And he said that even if the number of people earning income from gigs is growing, they still represent “a very minor part of the economy,” at least as far as overall size is concerned.
But he said he is “increasingly concerned that our standard self-employment and multiple job measures from traditional labor force surveys…may be missing much of the growth of the share economy.”