Economics: Does the expanding gig economy contribute positively to sustainable economic

growth?

The workplace of today is changing dramatically. The gig economy, which has become a popular
career choice in recent decades, is altering the economic landscape. However, there are often
arguments over the gig economy's long-term economic impact. This paper will investigate the
consequences of the gig economy and its long-term impact.

To begin with, sustainable growth involves sustaining the pace of development while avoiding other
economic concerns. Rapid expansion risks depleting resources, causing environmental issues, and
contributing to global warming. The model's long-term viability, on the other hand, is questionable.
Due to the difficulties it encounters, integration with the main economy appears to be challenging.
The data on the gig economy depict a free market system in which organizations and independent
workers participate in short-term labor agreements. The gig economy has been scrutinized in recent
years because technology has reduced entry barriers to such an extent that "gigs" have become widely
available to an unprecedented number of individuals.

Over 30% of the working population in the United States is already employed in some form.
Surprisingly, the pattern continues in the post-pandemic era. The gig economy grew by 33% in 2020
and is growing far faster than the overall economy of the United States. There are around 1.1 billion
on-demand gig workers globally, with 2 million additional gig workers appearing in the United States
alone in 2020. According to Statista, by 2027, over half of the US population would have engaged in
gig employment. Today, the on-demand gig economy employs 35% of American workers.

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Figure 1: Projected gross volume of the gig economy from 2018 to 2023.

On the one hand, working in the gig economy provides several benefits to both businesses and people.
From the standpoint of the employee, the gig economy generates work prospects, owing mostly to the
increased demand for delivery applications and services. One of the biggest advantages of working in
the gig economy for many individuals is the flexibility it provides. Gig workers have the freedom to
work their own hours, pick which projects they want to work on, and negotiate their compensation
rate. This amount of liberty is especially appealing to people who desire work-life balance or have
other obligations, such as caring for children or furthering their education. 55% of gig workers also
work full-time or on a regular basis. (PYMNTS)

Furthermore, the gig economy enables people to pursue a variety of jobs, ranging from writing to
marketing to programming and beyond. This variety may make employment interesting and difficult
while also providing exposure to other businesses. Furthermore, the gig economy can give
opportunity for people with little or no expertise or qualifications to get valuable industry exposure.
As a result, some workers in the gig economy earn more money than they would in regular jobs.
According to a recent study, the number of high-earning independents - individuals who make
$100,000 or more and are likely to work in highly specialized sectors - is increasing. There were 3.3
million of them in 2018, accounting for around 21% of all full-time independents. (MBO Associates)

From the standpoint of the employer, hiring gig workers favors high-volume recruitment situations
and businesses that cannot afford or do not require full-time personnel. This is especially effective

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when there is a high demand for certain services but no need for a permanent workforce. Hiring
part-time or temporary employees makes sense at peak periods or for certain tasks. The gig economy
began with lower-skilled workers but has now grown to the point where the greatest talent is working
on a 'gig', or freelance/contingent basis, due to higher pay and greater flexibility. Companies may
access into this pool of seasoned individuals with unique perspectives and ideas without committing
long-term resources or investments in training new staff. In addition, during an economic slump,
deploying an alternative, on-demand workforce is becoming more common. To save expenses in these
uncertain times, many businesses are exploring new and unusual ways of doing business.

Overall, these benefits can assist businesses in lowering overhead expenses while still gaining access
to seasoned people who bring unique perspectives and ideas to the table. Furthermore, companies may
swiftly scale up or down based on their needs at any given moment without having to make long-term
commitments or upfront expenditures in recruitment efforts. Hiring gig economy workers has several
benefits, including cost savings, access to premium talent, and flexibility and scalability.

The model's long-term viability, on the other hand, is in doubt. Due to the difficulties it encounters,
integration into the main economy appears tough. To begin with, gig economy workers are vulnerable
to labor exploitation. Workers in the gig economy are not entitled to the same benefits as full-time
employees. As a result, there are no health benefits, paid time off, or pensions. The corporation
completes the task without incurring any additional costs for the employees. It can afford to pay the
worker a fraction of what it would otherwise have to pay a full-time employee. This absence of
benefits may put significant pressure on workers, particularly those who have families to support. As
a result, many gig workers confront the issue of not being paid on time or at all. Many of them have
unclear payment mechanisms, allowing employers to abuse them. Furthermore, gig workers do not
have the same legal protections as typical workers. Gig workers are frequently classed as independent
contractors rather than employees, which means they are not subject to the same labor laws
protections. This covers items like the ability to organize and bargain collectively, protection from
discrimination, and workers' compensation.

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Figure 2: The challenges of the gig economy for employees.

Furthermore, some gig jobs are extremely low-paying, and even the highest-paying assignments might
be unreliable. As a result, many gig workers find it difficult to make ends meet. Gig workers are more
exposed to economic shocks such as medical issues or automobile breakdowns since they do not have
a consistent revenue source. The industry is diverse, and most of it is supported by venture capital,
with many businesses qualifying as start-ups and just getting started. The question is whether these
business models are sustainable, and if they can ever genuinely be consistent with Corporate Social
Responsibility. As Kelle Howson, a postdoctoral researcher at the University of Oxford, believes: “If
a business cannot be sustainable while allowing its workers basic rights like sick leave and minimum
wages, it's not a very good business”. Furthermore, gig workers are exclusively recruited on a
project-by-project basis. There is no promise of regular work or that they will be recruited on a regular
basis. Workers are always under pressure to find new projects and jobs in order to obtain regular
salaries. This might make it difficult for gig workers to budget and make long-term financial
decisions.

With all of the reasons stated above, it is evident that gig workers are likely to be under constant
stress, which may exacerbate their mental condition. Job insecurity, bad working conditions, toxic
relationships, unemployment, long work hours, shift work, low salaries, and poor management can all
contribute to serious disease and unnecessary death. These factors may be present in gig employment.
All of the risks associated with extended sedentary behavior are present in gig transportation and all
other jobs that entail considerable amounts of sitting and immobility. Lifting, carrying, moving, and
pushing heavy things without sufficient safety equipment, tools, and training puts workers at risk of
injury and long-term impairment. We need to view gig work the same way we view dangerous work

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in traditional employment settings without the training, safety equipment, supervision, guidance,
tools, and rules that protect regular employees.

An interdisciplinary approach could determine how gig workers' basic needs could be met through
changes in work design and the development of worker support systems such as employer-funded gig
workers' compensation, community policy, and planning to facilitate gig work, legislation to provide
basic protections for gig workers, and technical expertise for building better apps. Creating a
framework that supports gig labor economically, mentally, physically, and socially might make it a
viable economic and gratifying career path for workers of any color, gender, country of origin,
religion, handicap status, or socioeconomic position.

To summarize, the growing gig economy does not totally contribute favorably to long-term economic
growth. The gig economy can provide prospects for greater flexibility, different work, higher wages,
and industry exposure. However, gig workers face poor compensation, a lack of benefits, job
uncertainty, and little legal rights. As a result, authorities must evaluate the impact of the gig economy
on workers, customers, and the larger economy. Policymakers, in particular, must address the issues
faced by gig workers by campaigning for greater compensation, benefits, and legal safeguards; firms
employing gig workers must be held accountable for adhering to employment standards and treating
workers with decency, respect, and justice. Finally, gig workers must safeguard their own interests by
lobbying for their rights, organizing, and exploring collective bargaining possibilities. The only
approach to ensure a future for gig work that benefits both employers and employees is to create work
circumstances that are acceptable to all parties concerned.

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