The Unsung Heroes of the Gig Economy & Recognizing Their Vital Contributions

Gig workers have become an essential part of the U.S. economy, with drivers for ride-share companies like Lyft and Uber being some of the most visible. However, the contributions of gig workers are often underestimated by economic policymakers due to shortcomings in key employment surveys.

The Current Population Survey (CPS), a primary tool for measuring U.S. employment, hasn't caught up with the times. Many gig workers rely on these jobs for extra income or even to make ends meet, yet the survey often misses them. Research indicates that as many as 7 million workers may be overlooked each month. This gap in data means that policymakers lack a true picture of the labor market, making it difficult to create informed policies that support all workers.

Mary Burke, an economist at the Federal Reserve Bank of Boston, emphasizes the need for better measurement of gig work. The undercounting of gig workers affects key employment metrics, such as the number of workers participating in the economy. Accurate data is crucial for understanding how people are getting by and what the labor market is offering them—or failing to offer them.

Gig work encompasses a wide range of activities, from ridesharing and food delivery to handyman services and hairstyling. What all these roles have in common is the lack of a traditional employer. Gig workers set their own schedules and are responsible for their own benefits, such as retirement savings and health insurance. This flexibility is a significant draw for many, allowing them to balance work with other responsibilities like childcare.

Take Charles Clemons Muhammed, a Lyft and Uber driver in Boston. With a background as diverse as his work experience—ranging from law enforcement to entrepreneurship—Charles embodies the spirit of the gig economy. He drives when he wants, avoiding rush-hour traffic and maximizing his income. For Charles, gig work is more than just a job; it's a business where every mile and every toll counts.

To better capture the realities of the gig economy, employment surveys like the CPS need to evolve. Burke and former Boston Fed economist Anat Bracha developed the Survey of Informal Work Participation to fill this gap. Their research revealed that proper counting of gig work could significantly increase reported employment rates. For instance, in December 2017, the number of uncounted workers ranged from 316,000 to 7 million, depending on the assumptions made.

Updating employment surveys to include more specific questions about gig work is a step in the right direction. The Bureau of Labor Statistics is working on supplementing their surveys with questions that better capture informal work. This will provide a clearer picture of the labor market and help policymakers create more effective economic policies.

Gig work is not just a side hustle for many; it's a primary source of income that supports families and individuals across the country. By recognizing the importance of gig workers and improving how we measure their contributions, we can ensure that all workers receive the support they need to thrive.

As we continue to explore the evolving labor market, it's clear that gig workers play a crucial role in our economy. Their flexibility, dedication, and diverse skill sets are assets that should be acknowledged and supported. Understanding and valuing gig work is essential for building a robust and inclusive economy that works for everyone.