The Pros and Cons of Gig Economy in 2022
The gig economy seems to be the next step in how we work in the modern world. However, it is not without its drawbacks or unexpected twists and turns. I’ll go over some pros and cons of gig economy and what to watch out for if you decide to join a freelancing platform like Upwork or Freelancer .
What is Gig Economy
The gig economy refers to an environment in which temporary positions, or gigs, are prevalent and individuals lack traditional employment relationships with the organizations for which they provide services or from which they receive remuneration.
Sometimes, the term also applies to self-employed individuals who have been contracted by a client to do work of short duration or going forward.
For example, ride-sharing services like Uber and Lyft function on the gig economy model, where workers are considered independent contractors rather than full-time employees entitled to benefits such as sick leave or workers’ compensation.
What Are The Pros and Cons of Gig Economy
Security — Yes, there is security
Working for yourself, you have total control over your time, your schedule, your methods, and your income. You can take as much or as little work as you like.
For example, if you’re a skilled photo editor who goes on vacation in Europe for two weeks every summer, you could just turn down all gigs during that time and enjoy a well-earned break without worrying about replacing your lost income. There are no managers to deal with, no office politics to navigate.
All work comes directly from clients (and can be sent straight back to them!) in a totally transparent way. No middleman means more money for you at the end of each month!
Flexibility — No, there is not much flexibility
Flexibility is a factor for some workers. For example, some part-time employees may not need a full-time schedule or location. But there are many jobs that don’t gig economy jobs where people want flexibility, too.
There are many reasons people seek flexibility in their work, but there are also plenty of drawbacks that come with it.
This can include lower wages or fewer benefits overall than if they were in a traditional job setting. When these workers need to go out on short notice or leave early, they receive little support from employers unless they have a strong relationship built around trust.
Many times gig economy jobs provide fewer opportunities for upward mobility because employees aren’t seen as team players who are committed to long-term employment through their employer.
Job Satisfaction — It depends
The gig economy is great if you like variety, freedom, and working around your own schedule. You can decide when you want to work, which jobs you take, and how much money you want to make.
On one hand, these are all things that people usually look for in a job. But workers need to be careful about what they are getting themselves into.
One study found that 46% of freelancers were stuck working at least one job because they didn’t have enough work on their own. In another study, about 15% according to The Conference Board, are foregoing standard employment for a gig economy experience.
Most times, these are workers who feel stuck in dead-end jobs or who can’t seem to find any work at all. But there are some advantages to gig work that may outweigh these concerns — especially if you love what you do.
Independence — For some workers, it’s a blessing
The freedom to choose when you work, how much you make, and whom you spend your day with can be priceless.
Being an independent contractor can provide an exhilarating sense of autonomy. But it’s not for everyone: If having a predictable paycheck is important to you, working as an independent contractor might not be ideal.
Contract workers don’t get any benefits that standard employees receive, like health insurance or 401(k) plans, so you’d have to set up those benefits on your own.
If something comes up with your employer (your workload is reduced or cut altogether), then there isn’t anyone else in between to fall back on — you find another job yourself.
Productivity — it depends
There are many benefits to being able to work on your own schedule. No one bossing you around, no set schedule, and complete freedom over what you work on.
That freedom can be incredibly empowering for some people. But it also comes with its share of disadvantages; some people just can’t deal with their lack of structure and miss having a boss to report to, every day. If that sounds like you, then a gig economy job might not be for you!
Consider taking these gigs for extra cash in your free time when doing so doesn’t impact your real job too much, but don’t plan on making a full-time income from them!
Personal Growth — it depends
According to a new study from Upwork, 40% of workers say they would leave their job for a better one if given an opportunity.
The problem is that many don’t know where to look for their next gig–even in today’s gig economy. If you’re looking for more opportunity, freedom, or personal growth, consider freelancing.
To get you started on your own journey, check out this article on productivity tips for gig economy workers in order to get you ahead of your work.
Being in charge–you call all the shots.
You get to work your own hours, choose whom you work with, decide when you are available, decide when you are not. You can work extra to make up for slow times if necessary.
There is no pressure or oversight from a higher power.
You have complete autonomy over all aspects of your business, including setting your prices, determining where and how to advertise, choosing your tools and processes to get things done.
While Uber drivers may enjoy a flexible schedule, there are disadvantages to be found in every type of work.
Independent contractors miss out on employer-sponsored benefits such as health insurance and paid time off. Unpaid income tax also means losing out on deductions.
The IRS doesn’t offer any special considerations for gig economy workers, so it’s important to keep track of your taxable income if you regularly drive with Uber or other similar platforms.
Most independent contractors are required to pay self-employment taxes, while employees aren’t.
Finally, Gig economy jobs may provide flexibility, but they don’t make up for their lack of benefits by doling out more money for working independently instead of a full time for one employer.
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PS: You can check my blog for more educative articles on business, time management, and productivity,