There are (at least) two distinct gig economies

There is little question that people working in non-traditional employment (freelancers, contractors, other forms of self-employment) make up a substantial and growing fraction of the working population. McKinsey estimates that about 20%-30% of Americans and Europeans perform independent work. Some estimates for the U.S. are even higher. There are projections that as much as half the U.S. workforce could be working in some form of freelance role by 2027.

Many articles on the gig economy make the error of trying to characterize the properties of a single population of workers. This is a big mistake because there are at least two distinct gig economies. The first is made up of low-paying short-term tasks, such as driving for Uber or Lyft or the range of jobs offered on sites like TaskRabbit. The second gig economy is populated by skilled independent workers who often command high hourly rates. The phenomenon of high-skilled and highly-paid freelancers is not new. A 2012 article on this population is titled The Rise of the Supertemp. A more recent article from Fast Company can be found here. Companies have historically hired many contract workers for specialized tasks, from attorneys to accountants and many others. The unique feature of supertemps is that they are often hired directly rather than being employed by a professional services firm.

While many low-paid gig workers (like Lyft and Uber drivers) are not thriving, there is a diverse population of professional gig workers who are doing just fine and like their situations. McKinsey proposed a helpful taxonomy for thinking about the gig economy.

When politicians and policymakers talk about the gig economy, they are usually referring to the what McKinsey refers to as the Reluctants and the Financially Strapped. These are people who have ended up with non-traditional employment because they can’t find something better. In McKinsey’s estimate, however, fully 70% of the population of people working in non-traditional jobs (what economists refer to as contingent labor) prefer this situation to a traditional job. The growing population of people who are self-employed by choice is an important group. They demonstrate a marked shift away from the standard industrial model for work that has prevailed in developed countries for the last hundred years.