COVID didn’t kill gig economy, the pandemic accelerated it
A new survey of the gig economy found that it grew 33% to $1.6 trillion in 2020, despite the onslaught of havoc brought upon the economy by COVID-19.
The online survey of 2,788 U.S. adults by payments firm daVinci Payments also had some other surprising facts about the nation’s gig workforce. The survey is based on the 35% of respondents who identified themselves as gig participants.
Defined as temporary or part-time work conducted by independent workers, the survey found that 63% of gig workers (approximately 59 million out of the total 93 million gig workers in the country) also held full-time jobs in 2020, a 19% increase from 2019. The onset of COVID increased the importance of gig work for many, as 74% said gig work is “as important or more important” to their financial security because of COVID.
The number of gig workers who earned less than $15,000 in 2020 was 69.8 million, a 35% increase from 2019. That is 74% of all gig workers. The average gig worker income was $17,445 in 2020, up from $16,926 in 2019, daVinci said.
The survey found about 50% of gig workers had a household income below $50,000 per year; 6% had income above $150,000. The average U.S. household income in 2020 was $68,703, according to the Census Bureau.
Rodney Mason, chief marketing officer for daVinci, told FreightWaves the results show that the majority of gig participants are working to supplement their income and make up for “deficiencies in their full-time income.”
“Gig workers skew younger, which has an impact on their earning potential,” he added. “Additionally, one-third report that they only do gig work with no other source of income, further reducing their earnings. All this indicates gig workers are struggling and working hard to keep their financial head above water.”
Those who identified their gender indicated that 42% of the workforce is male and 31% female, up 20% and 19%, respectively, from 2019.
The daVinci survey then asked respondents more specific questions. Of those who answered, 56% of those who participated in the gig economy in the past 18 months identified as Gen Z and millennials; 28% as members of Gen X; and 16% as baby boomers.
In general, the survey found the average gig worker to be more educated than the general population as a whole, with half of gig workers having education beyond high school. Thirty-four percent said they had a college degree and 14% identified as having an advanced degree. Only 4% said they had less than a high school diploma. According to the American Council on Education, 10.4% of the U.S. population, as of 2017, had less than a high school education.
Of those who gig, 59% said they do it to supplement their income, while 42% said they like the flexible scheduling that gigging offers. Work-life balance is important for 20% of respondents, but 14% said they are working gig jobs because they can’t find a full-time job.
A large majority of respondents, 78%, said they expect to perform as much or more gig work in 2021.
When it came to which jobs gig workers participated in, 23% said they handled retail, with 22% reporting restaurant work. Other types of gig jobs included cleaning (18%), customer service and delivery driver or rideshare (17% each), hotel and convention (14%), and education (12%).
Mason said that “anything that gig employers can provide to reduce constraints on [gig worker’’] time and income, like gig work apps, same-day and prepaid [payments] delivered with relevant values can significantly grow their loyalty.”
According to the survey, 70% of respondents said they would be more loyal to a gig job that offered same-day pay, and 63% said they had been offered same-day pay. Importantly, 61% said apps are important or a must for any gig work, and 71% said they would like to receive special offers along with their gig pay. The survey didn’t define what those offers should be, but Mason provided some insight.
“Relevant offers that help them with their everyday life are what they care about most,” he said. “Savings on food, transportation, work clothing and necessary work supplies are some examples; daVinci is able to deliver these values with its proprietary Brand Accelerator at the moment of payment conversion where gig workers log in to accept their gig work payments.”
Additionally, daVinci is seeing gig companies offer more choice and flexibility to workers.
“We’re seeing gig companies offer choices with push-to-a-bank accounts, which can take a few days, offered with the option for a portion or all gig worker earnings going to a virtual or physical prepaid card that can be delivered instantly and spent anywhere,” Mason said. “Prepaid is cheaper than issuing checks for payers and it can serve as a significant time and money-saving solution for the unbanked, who have to use check-cashing services if paid by a check.”