Are You Part of the Gig Economy? If Not, You Might Want to Start Thinking About It Now

When most people think of people who work gigs, images of musicians and freelancers are the first to pop up. But believe it or not, many more seemingly regular folks are working gigs these days. I heard a story on NPR last week that spoke to Tina Brown, founder of TheDailyBeast.com and she called it the gig economy.

To see how prevalent this has become, just ask someone what they do for a living. This used to be a simple answer: “I work in manufacturing” or “I’m a teacher” or “I’m in sales.” But now, you’ll often find that people don’t have an easy to define label. They may rattle off a handful of things or projects they do. Try it on yourself. When asked what you do, what’s your answer? Is it a succinct 2 second quip, or does it take you a minute to explain everything?

While It Isn’t New, It’s Becoming Mainstream

The idea of the gig economy isn’t new. Those who have always been on their own or worked in a number of creative fields have been doing this for year. Moving from project to project, and getting paid as they go. Typically, we thought of these types of people as uneducated, low-wage earning workers without a direction. But it is becoming increasingly common for well-educated and higher income people to take up this kind of employment.

The Daily Beast did a poll in January and the results were somewhat surprising:

Five hundred employed U.S. citizens aged 18 and over were interviewed via the Internet on January 8 and 9.

A full one-third of our respondents are now working either freelance or in two jobs. And nearly one in two of them report taking on additional positions during the last six months.

Just as startling, these new alternative workers are not overwhelmingly low-income. They’re college-educated Americans who earn more than $75,000 a year.

As you can see, the idea of working freelance, or at least taking on additional projects has been an increasing trend as of late. I think an even bigger part of this shift is due to our generation, and those even younger. We don’t see the same loyalty to our employers that our parents did. We’re not planning on working for the same company for thirty years just to get a gold watch and a pension.  And as can be seen with the massive layoffs in the past year, nobody is safe. Because of the insecurity and lack of loyalty from our employers, it only makes sense that the younger generations are taking more control over their careers, which often means working on their own.

As Layoffs Mount, Planning Ahead Could Pay Off

If you’re already firmly established in the gig economy, you probably feel fewer effects of rising unemployment. Your work might not be tied to an employer, and it’s up to you to keep finding new jobs and to make money. While the bad economy can affect many aspects of your business, you can at least sleep easier knowing you won’t wake up tomorrow and be handed a pink slip.

But what about those who are counting on that regular paycheck from their single job? What happens when they are shown the door? Unemployment benefits are pathetic and can’t support a family, and the prospect of finding another job these days is pretty grim and could take months, or even a year or more. You can continue to send your resume to dozens of potential employers a week, and scan the classefieds and job boards, but that isn’t going to put food on the table. 

I’d argue that if you are just plugging along at your job and hoping for the best that you won’t be laid off, you should be putting a contingency plan in place. Yes, you should have an emergency fund and some basic necessities covered in the event that happens, but you should look beyond that. What will you do for work? Just hope that you can find a job soon? Will you take a lower paying or unrelated job just for the time being? You could do that, or you could take control and put your skills and experience to work.

What skills do you have that you could put to work? What is your experience? Find out what you have that others may need, even if it isn’t directly related to what you were doing. Did you get laid off as a biochemist but have experience with and fun working with computers? Think about how you can possibly do computer consulting. Help people set up their home networks, build websites, or whatever it is you enjoy doing and could make a few dollars with.

A Blessing in Disguise

A job loss could also be a blessing in disguise. Many people have dreams of starting their own business, or embarking down a different career path, but the good job and steady paycheck is just too much to walk away from. So many people go through their whole life afraid to take that next step because they don’t want to give up what they have. It only makes sense, because if you’re supporting a family, it’s hard to just walk away from a job that pays the bills.

But if you find yourself out of a job, it could be the best thing to happen to you if you have dreams of doing something else. You didn’t have to make the difficult choice of quitting just so you could try something new. Your employer made that choice for you. This is the time for you to sit down and think about what you really want to do with your life. If you had a dream of changing careers or trying something new, you won’t have a better chance. The worst that can happen is you find it isn’t working out, and you can pick up the job search and go back to what you might have been doing before. The best that can happen is that you’ve found something that you love to do, and the freedom to do it.

Author: Jeremy Vohwinkle

My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.

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