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Who's involved in the gig economy?

Posted on 19 February 2018 by Katriina Lepanjuuri, Senior Researcher .
Tags: economy, employment, gig economy, income

Recently, NatCen have been lucky enough to carry out two really interesting studies into modern employment practices. Specifically, we have examined the ways in which these practices are facilitated by digital space and platforms focused on matching skills and assets with demand.

The first of our reports focused on the so called ‘sharing’ economy, and the second on the ‘gig’ economy – closely related phenomena which have both received a lot of attention in the media recently. This is no small part due to Matthew Taylor’s review of modern working practices.

My colleague Nilufer Rahim already posted about our work on the sharing economy and people’s understanding of their tax obligations a couple of weeks ago. This post will focus on the latter, the gig economy, which came out two weeks ago with the government announcement on new employment rights for gig workers.

The first aim of the project, commissioned by the Department for Business, Energy & Industrial Strategy, was to develop a working definition of the gig economy. Even if we might intuitively know what it means, no single, agreed definition existed.  Based on inclusion and exclusion criteria, it was agreed that “The gig economy involves the exchange of labour for money between individuals or companies via digital platforms that actively facilitate matching between providers and customers, on a short-term and payment by task basis.”

Using this definition we set out to estimate the number of individuals who have found work through the gig economy, and to find out more about who they are and what they think about being involved in it.

Weekly Twitter Tiles _Gig Economy -12

The NatCen Panel found that 4.4% of the adult population in Great Britain had worked in the gig economy in the last 12 months. This is roughly 2.8 million people.

It also emerged those involved in the gig economy were generally younger and more urban than the rest of the population. Over half of those involved (56%) were aged 18 to 34 compared to 27% of the whole sample. While just 13% of the general sample lived in London, 24% of those involved in the gig economy were based there.

Most commonly, those involved in gig economy saw the money earned there as an extra source of income on top of their regular earnings, with only 8% saying it was their main income. Indeed, for around 2/3 of respondents, it amounted to less than 5% of what they had earned in the last 12 months. Regardless, 42% felt that money earned in this way was important to their standard of living. As one would expect, those who earned a larger proportion of their income in the gig economy were most likely to recognise it as an important source of income.

The evidence indicates that those involved are overall reasonably satisfied with their experience in the gig economy. Independence and flexibility were cited as the two aspects that those working in the sector were most satisfied with.

Our report suggests that jobs in the gig economy, particularly those in the younger age groups, are indeed gigs – a top up rather than key to their earnings. The flexibility and independence gigs offer is welcome as it can be fitted around other activities. 

Weekly Twitter Tiles _Gig Economy -16

Those to whom the gig work was their main source of income  and those who treated their work in the gig economy as a source of income while they focus on something else were particularly satisfied overall with their experience (90% and 71% respectively said they were satisfied).

Those to whom the work in gig economy was an important source of income were also significantly more likely to see themselves continuing to provide services through websites and apps in the next 12 months, perhaps also reflecting their greater levels of satisfaction with the work. This is all, of course, really positive.

However, work-related benefits (such as pension contributions or parental leave), career/development and level of income (less money to put aside for retirement or periods of unemployment) were aspects of the gig economy workers were less satisfied with. These are aspects that might not be of prime importance in the short-term or when people are involved in one-off gigs every once in a while, but have the potential of leading to problems in the long run, particularly for those who fully rely on the gig work for their income (that 8% of our sample).

For workers in this group, the stricter enforcement holiday and sick pay announced yesterday will be likely to be particularly beneficial.

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