Study: Tight Labor Market Stagnating Gig Economy
November 1, 2018 | The Conference BoardEstimated reading time: 2 minutes
The Conference Board released a report that details the reasons behind the US gig economy’s stagnant growth. Factors include a tighter labor market, slower rate of outsourcing, operational challenges at companies, and US public policies encouraging “traditional” work. By explaining the responsible factors, it provides context to findings released in June by the Bureau of Labor Statistics, which showed no growth in the share of “gig” workers since the mid-90s.
Despite static growth in the gig economy as a whole, online labor platforms continue growing but remain a tiny share of the labor market outside the transportation sector. For that reason, the new study also discusses the opportunities and challenges for online labor platforms to become a more significant part of the economy. These platforms quickly link individuals and businesses with independent contractors who can provide services.
“The perception about rapid growth of the nontraditional workforce is not supported by hard data,” said Gad Levanon, Chief Economist of North America at The Conference Board. “The cause of this hype was the emergence of online labor platforms. However, other than the transportation sector, these platforms represent a tiny share of income and total hours worked in the US economy. This may change in the future as more employers unlock the potential of these platforms, including their ability to provide businesses with additional workers for the fast-approaching holiday retail season.”
As further discussed in the report, the reasons behind the gig economy’s stagnant growth include:
Tighter labor market: Among other sources, tax data on self-employed workers suggests that the gig economy did expand after the financial crisis, when companies had a strong incentive to remove traditional employees from payroll to reduce costs. But in today’s tight labor market, many of the once-nontraditional workers have now obtained regular employment.
Slower rate of outsourcing: The 1990s saw a surge in the number of jobs that went from full-time, traditional employees to nontraditional workers outside of companies. But since the 2000s, the outsourcing trend has decelerated.
Operational challenges at companies: Many tasks simply do not lend themselves to nontraditional work arrangements. Moreover, while HR oversees the hiring of “regular” employees, Procurement often oversees the spending on nontraditional workers. Given the distinction between the two departments, employing nontraditional workers can pose an operational challenge.
US public policies encouraging “traditional” work: In the US, workers without a traditional job face greater exposure to financial and health-related risks than their European counterparts. Less government support incentivizes workers to gravitate more to full-time work rather than nontraditional gig work.
The Conference Board refers to the “gig economy” as workers in nontraditional working arrangements, including independent contractors, temp workers, and on-site workers employed by outsourcing companies.
Online Labor Platforms
Given their potential, the study lists which jobs most lend themselves to online labor platforms. The list largely results from a unique analysis of thousands of ads posted on a large online labor platform and classified into hundreds of detailed occupations.
About The Conference Board
The Conference Board is a member-focused think tank that provides trusted insights for what’s ahead. We are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.
Suggested Items
Determining the Value-add of Box Build
04/24/2024 | Nolan Johnson, I-Connect007At a strategic level, adding box-building services makes sense for customer loyalty. But is it really that simple? Jon Schmitz, who manages customer engagement at RiverSide Integrated Solutions, talk about about what it really takes to be successful in offering EMS and final assembly services under the same company banner.
Designer’s Notebook: What Designers Need to Know About Manufacturing, Part 2
04/24/2024 | Vern Solberg -- Column: Designer's NotebookThe printed circuit board (PCB) is the primary base element for providing the interconnect platform for mounting and electrically joining electronic components. When assessing PCB design complexity, first consider the component area and board area ratio. If the surface area for the component interface is restricted, it may justify adopting multilayer or multilayer sequential buildup (SBU) PCB fabrication to enable a more efficient sub-surface circuit interconnect.
LPKF Extends Contract of CEO Klaus Fiedler until 2028
04/24/2024 | LPKFThe Supervisory Board of LPKF Laser & Electronics SE has decided to extend the contract of Dr. Klaus Fiedler as CEO until 31 December 2028. "Under the leadership of Klaus Fiedler, LPKF has undergone some extensive transformation since he joined just over 2 years ago.
IPC Design Competition Champion Crowned at IPC APEX EXPO 2024
04/24/2024 | IPCAt IPC APEX EXPO 2024 in Anaheim, California, five competitors squared off to determine who was the best of the best at PCB design.
Schweizer Electronic Appoints Thomas Gottwald as New Member of the Executive Board
04/23/2024 | Schweizer Electronic AGThe Supervisory Board of Schweizer Electronic AG has appointed Mr. Thomas Gottwald to the Executive Board as CTO (Chief Technology Officer) for a period of 3 years with effect from 1 May 2024.