Gig Work – Current Trends and Developments

Gig work has received some attention in recent months – in part due to the potential impact of increased deployment of digital technology on so-called ‘platform workers’; in part due to public policy efforts to better regulate this type of work. In November 2021, for example, the European Union drafted a new proposal that would change the status of platform workers from self-employed to regular employees. If passed, this proposal would extend the right to a minimum wage, safety protections, paid leave, and unemployment benefits to around four million platform workers within the EU. In Canada, the Government of Ontario recently introduced legislation that would establish employment standards for gig workers, including minimum wage and regular paydays. Labour economists criticize the legislation, however, as they perceive it as being largely ineffectual in its current form.

The increasing focus on how to better address the needs and interests of gig workers through improved labour standards is a reaction to the growth of the gig economy. While discussions often focus on so-called platform workers, like ride-share drivers and food deliverers, gig work can take many forms which means that needs and requirements of gig workers might differ by the type of work being conducted. This, in turn, would require both a broader as well as more targeted policy approach accounting for the different forms of gig work.

What is a Gig Worker?

This leads to the question of how best to define gig work. In general, gig work is characterized by short-term, on-demand, and task-based labour. As such, gig work overlaps closely with self-employed work, contingent work and freelancing.

Much of the discussion of gig work has centred around platform-based activity, which is part of this sector but not the full sum of activity. Digital technology has enhanced the possibility for task-based labour across a variety of industries through labour-based platforms. These can generally be distinguished into crowd-work platforms and on-demand work platforms. On crowd-work platforms, such as Upwork, Freelancer or Mechanical Turk, gig workers typically perform short-term tasks or projects online. On-demand platforms, in contrast, facilitate the performance of physical tasks such as ride-shares, food deliveries etc.

The various forms and formats gig work can take, then, can lead to inconsistencies in definitions. While some studies focus exclusively on platform workers, others include additional forms of non-standard work. Thus, based on the definition or focus applied, numbers on the share of gig work in the economy can vary.

Trends in Gig Work

Depending on the definition used, estimates for the size of gig work in the US vary between 25% and 35%. Interestingly, the share of platform workers is estimated to be less than 1% of total U.S. gig workers. This might, in part, be because digital work does not necessarily equate with gig work. Put differently, except for the drivers most employees at Uber, for example, would not fall into the category of gig worker. In the UK, studies estimate the share of gig workers to be around 15% of the total labour force while the EU reports roughly 17%.

Gig work as a share of total labour force is expected to increase significantly over the medium term. Data for the U.S. alone suggests that it grew by 33% in 2020 – more than eight times faster than the overall U.S. workforce. By 2027 the U.S. gig workforce is projected to increase to 86.5 million people; around 50% of the total US workforce. In the EU, gig work is projected to increase from a total of 28 million workers today to 43 million by 2025.

Similar to other countries, estimates for the number of gig workers also vary for Canada. A recent study by Statistics Canada suggests that the share of gig workers increased from 5.5% in 2005 to 8.2% in 2016. Findings from the Bank of Canada’s Canadian Survey of Consumer Expectations (CSCE), in contrast, suggest that almost a third of Canada’s labour force participated in gig work in 2018. Similar to the Bank of Canada’s estimates, survey data by Angus Reid finds that around 34% of Canadian adults had been engaged in gig work in 2018. In line with global trends, the share of the gig workers is expected to grow in Canada over the medium term.

Canadian Trends

Abraham et al. (2018) et al. note that gig workers can be identified by type of work arrangements. Based on their classification, gig workers comprise unincorporated self-employed, day labourers, on-demand workers and platform workers.

Applying this classification to Canada, we first use Labour Force Survey data on unincorporated self-employed (without help) and temporary work for February 2020 to February 2022 for an initial assessment of gig worker in Canada over the past two years. This also provides us with some indication of how gig workers may have fared during the pandemic.

Statistics Canada distinguishes temporary employment into term or contract jobs, casual jobs, seasonal jobs and other temporary jobs. Figure 1 illustrates employment changes for unincorporated self-employed without paid help and temporary workers (excluding seasonal workers) between February 2020 and February 2022. Total employment of this group amounted to roughly 2.9 million workers in February 2022, or about 15.4% of the total labour force.

As Figure 1 shows, between February 2020 and February 2022 the number of unincorporated self-employed Canadians without paid help declined by around 82,100 to roughly 1.2 million. In contrast, the number of term or contract workers increased by 70,000 to around 1.1 million workers over the same period. Employment in casual jobs declined by around 100,000, with the biggest decline between February 2020 and May 2020.

This may have been a pandemic-induced decline since employment numbers in this category actually increased between June 2020 and February 2022. Other temporary work saw a moderate increase of around 24,000 workers. In conclusion, combined employment for these categories fell by 92,000, largely driven by the decline in unincorporated self-employment.

Figure 1: Unincorporated self-employment and temporary employment in Canada, Feb. 2020 to Feb. 2022

Figure 2 shows temporary work and unincorporated self-employment (without paid help) for February 2022 by sex. The number of female workers in these categories is around 1.6 million while the total sum for males is around 1.3 million. This is in line with findings that women have an overall larger share among Canada’s gig workers compared to men. The chart also reveals that the higher numbers for women are largely driven by temporary work whereas men have a slightly larger share among unincorporated self-employed.

Figure 2: Temporary work and unincorporated self-employment by sex (in ‘000).

Figure 3 depicts temporary and unincorporated work by industry. Work of this nature is highest in educational services (374,000), health care and social assistance (363,000), wholesale and retail trade (267,000) and professional, scientific and technical services (242,000). The chart also illustrates that the composition of the nature of work differs by industry. While term or contract work is the dominating category in educational services and health care, casual employment is the prevailing category in wholesale and retail trade. In contrast, unincorporated self-employment is the most dominant form of work arrangement in professional, scientific and technical services when comparing these four categories.

Figure 3: Temporary and unincorporated self-employment by industry.

Figure 4 shows recent data provided by Statistics Canada on the outsourcing of tasks or temporary projects to freelancers, gig workers or other businesses or organizations in 2021. As is shown, in 2021 around 35% of businesses in information and cultural industries outsourced tasks or projects, followed by around 30% of businesses in arts, entertainment and recreation, and manufacturing with around 29%. As the data does not distinguish between freelancers and gig workers versus other businesses or organizations, the high number for the manufacturing industry is likely driven by the fact that manufacturing is traditionally characterized by a cascading structure. In other words, various supply industries play a relatively large role here in providing primary and intermediary products.

The percentages shares of businesses outsourcing tasks in construction (25.1%), wholesale trade (25%) and professional, scientific and technical services (25%) are in line with the relatively high shares of temporary and unincorporated work depicted in Figure 3 above.

Figure 4: Percent of businesses outsourcing tasks in 2021 by sector.

What is missing from the above data is more precise information on the extent of platform workers in Canada. Similar to varying estimates of the total size of gig work, estimates on the number of platform workers in Canada also fluctuate. A recent study by the Information and Communications Technology Council (ICTC) found that of 505 gig workers surveyed across Canada, about 46% reported that they could perform their gig work without the use of an app or a platform. This would suggest that slightly over half of all gig workers in Canada can be characterized as platform workers though study sample size would need to be extended for more definitive conclusions. In terms of income, the findings indicate that almost 60% of gig workers surveyed earned less than $20,000 per year from gig work. According to the authors, this is largely due to the fact that many gig workers earn additional income from other forms of work.

The socio-economic findings of the ICTC report also highlight the need for a more detailed understanding of the drivers and motivations for doing gig work. This is illustrated by the fact that among those earning their entire income from gig work, about 30% of respondents cite flexibility as the main reason, while almost the same number states that they need the income due to job loss. The findings also suggest a great diversity among gig workers. Around half of those surveyed hold a university degree, almost 80% were born outside of Canada and almost 60% identify as Black, Indigenous or a Person of Colour.

Why Should We Care About Gig Work?

Ultimately, quantifying gig work is only the beginning step in this research. The main reason for our focus on gig work is that some gig workers can experience poor work conditions, a lack of benefits and irregular income, and this context can be classified as precarious. In other words, what we want to understand better is the breakdown between ‘precarious’ gig work and ‘non-precarious’ gig work in Canada. This is a relatively poorly understood area of study, and yet understanding working conditions, income and benefits play in important role in defining and evaluating what support and targeted policy solutions might be necessary, and especially to assist those in ‘precarious’ gig work.

Hence, as a next step in this research project we will collect more detailed information on the typology of Canada’s gig workers to understand their employment circumstances. This will allow us to gain a better understanding of the various motivations for and working conditions of gig workers in Canada to help derive tailored and targeted policy solutions.

A Typology of Gig Work

As the above discussion on the gig economy has shown, the reasons and motivations for gig work vary among participants, as do working conditions, available support and earnings. To account for this, the World Economic Forum (WEF) distinguishes the motivation for gig work by four main categories:

• Free agents: In this instance gig work is an individual’s preferred choice and their primary source of income.

• Casual earners: This category refers to those for whom gig work is a personal choice and the resulting income provides supplemental income.

• Reluctants: For this group, gig work is conducted out of necessity and is the primary source of income.

• Financially strapped: This group participates in gig work out of necessity in order to supplement an insufficient main source of income.

In light of the varying circumstances associated with these categories, policy support and regulatory frameworks should be tailored and targeted to address the respective needs and requirements for each group. It is thus imperative to gain a better understanding of the size and demographic composition of each of these groups in Canada’s labour market, and within a broader understanding of the major directional trends affecting increased growth in each category.

Following this, the next steps in our research aims to estimate the size of Canada’s gig economy by these categories.

References

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