Gig Economy Impact on the US Economy: Challenges and Growth

Gig Economy : Los Angeles, CNN: Lazarus Limo, a skilled gig worker, commences hisday at 10 a.m. ET in Chapel Hill, North Carolina, driving for Uber and delivering food. With determination, he sets a daily target of $200 to $300, striving to achieve it within 8 to 10 hours.

Limo works as a “Dasher” for DoorDash on the weekends. He has no trouble adapting to the flexible nature of the gig economy, which has become very common over the past ten years. Tech platforms like Uber, Lyft, DoorDash, and Instacart have made it possible for millions of people to work on their own. This has changed the US economy.

The government doesn’t know much about this group yet, but experts say it’s growing quickly and has a big effect on many parts of the economy. In fact, it may even be changing the way the government measures the economy. Since it’s easy to find mobile-based jobs, the national jobless rate might be lower than it should be.

Louis Hyman, a well-known labor and business professor at Cornell University, says it’s important to take into account the different ways people use the gig economy. Those who can access these digital platforms tend to borrow less money, viewing gig work as an alternative to cope with uncertain times.

During the pandemic, DoorDash and Uber Eats gained a lot of new customers, which led to millions of people looking for online delivery jobs. Recent data, like tax returns, shows a big rise in platform-based gig workers, which shows that tech-enabled gig jobs are becoming more common.

Internal information from companies like Uber and DoorDash shows that a lot of people work in the “gig economy.” Uber’s “earners,” encompassing drivers and food delivery workers, reached a staggering 5.4 million in the fourth quarter of 2022. DoorDash has more than two million active Dashers every month, and more than 13 million people have used the platform since it started. A trade group called Flex says that about 23 million Americans have made money through online platforms in the past year.

Part of the reason for the rise of these digital platforms is that standard service jobs can’t do everything they used to. Gig workers like being able to choose their own hours, which makes them a good
alternative to traditional jobs in the service business.

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Even though gig work has its benefits, it still doesn’t offer benefits like health insurance and retirement plans. Additionally, it offers special benefits, such as providing individuals with extra time to search for their next job and serving as a financial safety net alongside unemployment insurance, savings, and support from family.

While gig work helps mitigate strain on unemployment insurance and debt, its broader impact on the economy is evident. The national unemployment rate remains at multi-year lows, and personal
bankruptcies have notably decreased compared to pre-pandemic levels.

Yet, despite its growing significance, gig work remains underrepresented in official government data. A Bureau of Labor
Statistics survey from 2017 only accounted for 1% of workers using gig apps. Experts believe that this undercounting significantly overlooks gig economy contributions.

The lack of comprehensive gig worker data poses challenges for policymakers and regulators seeking to understand and regulate the industry. To optimize investments, career choices, and policymaking,
reliable data becomes indispensable.

The lack of data makes it harder to install good governance and hinders the Federal Reserve’s ability to accurately analyze America’s workforce. However, legal challenges from companies like DoorDash, Grubhub, and Uber are common.

With the goals of keeping prices stable and keeping as many people employed as possible, the central bank relies heavily on complete data to make good decisions about monetary policy.

In conclusion, the gig economy’s fast growth is changing the way the US economy works. This means that official data needs to be more true to help people understand and run things better.

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