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.

10 comments
jim
jim

I've never heard it called the "gig economy" but it's a good name. I think you have to always be aware of the opportunities that are out there and taking advantage of various gigs as a side income (or even just for fun) is good advice.

pays to live green
pays to live green

Working on your own is a hard thing to do. To many people, it's very frightening over the fact that you do not have a consistent income. The problem is that you get in a rut and are stuck at the same job for years not making as much money as you could on your own.

outlaw
outlaw

In my line of work (the military) we always do extra jobs that we are not trained for. Unfortunately we don't get paid extra for this. I feel that once I join the civilian workforce I will be able to not only what I am hired for but whatever my employer asks for me. Hopefully then I will be able to reap the benefits of being able to do all kinds of odds and ends.

Kristy @ Master Your Card
Kristy @ Master Your Card

I definitely fall in this category. I work for a credit union by day and I do freelance writing by evening. If I were to lose my job at the credit union, I would fall back on my freelance writing quite heavily. For me, one of the draws of the "gig" is the freedom it affords me. I like being able to sleep to noon and work an afternoon to early evening shift. The basic 9-5 isn't really my thing. I'm a night owl and more productive from noon on, but I have the day job for some stability. My passion lies in writing, though, so that's the ultimate end game for me - getting into the screenwriting/novelist gig.

Shadox
Shadox

It's not a bad idea to diversify your income sources by working "gigs" and I know many people who do so, but I am not certain that most people can make a decent long term living this way.

Craig
Craig

In a lot of ways it makes sense. You can be more selective of projects you work on, possibly make more money in the end. Also, if you build reputation, projects will come to you. Do you think in some ways this could possibly be even more job security?

Bernz
Bernz

Great post here! I always tell people that getting laid off is not the end of the world. And for most people a blessing in disguise. They should look at this as just another opportunity for themselves. I remember few years ago when I quit my job to finally go full time into my business. Wife was very scared but it turned out to be the best decision I have ever made. And you're right Freelancing could be very profitable and fruitful when done right. Things always happen for a reason.

Eves Bank
Eves Bank

This is one of the best articles I've read. And it is very true that many people have multiple jobs these days. I think with everything becoming more and more expensive - people with or without education just have to find ways to make more money.

Mike
Mike

I can definitely say this is true for myself and many of my friends. It seems especially prevalent in IT and is a great way to make a little extra cash, gain experience, etc.

Anthony
Anthony

This totally sounds like my wife. By day, she's a mild-mannered school teacher, but by night (okay, mid-afternoon), she teaches private music lessons. Her day-job is relatively secure and we're maxing out her 401(k), yet her side-gig pays 50% more per hour and we enjoy all of the tax advantages (write-offs, income sheltering, etc.) It's awesome.