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November 21 2016

Pew: One in Four Americans Makes Bank through the Gig Economy

Patrice L. Onwuka

Think driving for Uber, selling on Etsy, or running errands for stranger on TaskRabbit are things that only Millennials do? Think again.

Nearly one in four American adults (24 percent) has earned money on online platforms, according to the Pew Foundation. Pew has broken this down into three categories: 18 percent (nearly one-in-five Americans) have earned money selling something online from second-hand items to new consumer goods, 8 percent (nearly one-in-ten Americans) have earned money though a job or task such as delivering food or giving rides on Uber and Lyft, and about 1 percent have rented out their properties on a home-sharing website. That’s substantial economic activity and it’s making an impact on the workforce.

Pew gives us an interesting to look at the reasons people earn money though online platforms and how much they earn.

Almost half surveyed (42 percent) appreciated the extra income, but could get along just fine without it. These Americans tended to be sellers of goods. However, for almost a third (29 percent) of Americans, gig-economy income is not extra but the primary source of income. These workers gravitate to platforms where they leverage their time and effort to perform a task such as driving for Uber. They also point to the flexibility of their schedules or an inability to find other jobs as reasons to take “gigs.” For the single mom with school-age kids or the small business earner trying to generate incomes in slow times, the new economy offers welcome working opportunities.

There are real differences in the demographics of Americans who use online platforms to sell goods versus those who earn money by selling their time and effort. Contributing time and effort is more common among those from households with low incomes compared to high incomes, among blacks and Latinos compared to whites, and among young adults than other age groups.

The reverse is true for selling online. It’s more prevalent among well-off and well-educated households than those with lower incomes and low educational levels, and it’s more common among whites than people of color.

Pew researchers note:

“These findings highlight the great diversity of experiences within the gig economy, and also illustrate the extent to which these services are blurring the boundaries between formal and informal employment,” Pew study author Aaron Smith said in a statement. “A slight majority of these workers rely heavily on the income they earn from these platforms, and use them for largely financial reasons. But a substantial minority views this work much more as a hobby – or simply a way to pass the time – as opposed to a true ‘job’ or a dedicated source of income.”

Policymakers in Washington and in states often treat the sharing economy or gig economy as an annoying little brother to traditional industries. In some cases, it’s become a favorite punching bag of the progressive policymakers. This new evidence underscores the wealth of employment and earnings these jobs provide – especially to communities that want independence and financial security.

Instead of trying to regulate these new businesses out of existence or saddling them with regulations and red tape to the benefit of established businesses and industry lobbyists, our leaders should be looking for ways to expand the opportunity and the economic activity they bring. The sharing economy and the employment it delivers will not disappear, but increasingly drive how Americans find work and make ends meet.

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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