Gig work: Pros and cons of nontraditional employment

Thanks to ride-sharing services such as Uber and Lyft, there have been plenty of reports about the so-called gig economy and gig workers. Merriam-Webster defines the gig economy as the economic activity that involves the use of temporary or freelance workers to perform jobs typically in the service sector. The IRS website states the gig economy, also called sharing economy or access economy, is activity where people earn income providing on-demand work, services or goods. Often, it’s through a digital platform like an app or website.

While nontraditional 9-to-5s have been around for a long time, advances in technology— specifically apps— have been game changers when it comes to employment. Uber is probably the most well-known app-based job, but there are plenty of others such as TaskRabbit, AmazonFlex, Rover, Instacart, Postmates, DoorDash, Shipt, VRBO, Handy, Turo, Dolly.

A variety of positions fit the gig category, and not all of them are in the service industry. Gig workers include contract employees such as skilled consultants, freelance writers and adjunct professors. According to a 2020 report by the ADP Research Institute, more than 70 percent of gig workers (1099MISC) say they are working independently by their own choice, not because they can’t find a traditional job. Sixty percent of those workers also stated they would continue to do gig work for the next three years.

The gig economy, like the traditional job market, offers a wide range of jobs for people with a variety of skillsets. Whether you’re a freelance graphic designer or a Lyft driver just trying to earn some extra cash, one thing is clear — gig employment is on the rise. The ADP report stated that 1 in every 6 workers in an organization is a gig worker. Researchers also found that from 2010 to 2019, the share of gig workers in businesses increased by 15 percent. Not everyone is happy about this trend; critics say these jobs benefit employers, not employees. Proponents say gig jobs provide opportunities for workers of all backgrounds and ages. Here are a few of the pros and cons.

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Unstable income Irregular hours Limited training Lack of benefits Expenses and taxes

Career experts suggest you do some research before you quit your traditional job. Why not try a fewgig jobs to see if they live up to your expectations. Advisers also recommend you start keeping records, planning and budgeting. If you’re going to be a ride-share or delivery driver, you’ll need to budget for vehicle maintenance costs. And don’t forget the taxes. According to the IRS, self-employed workers who net more than $400 a year from gig work must file a tax return. And if your employer is not withholding taxes from your paycheck, you might have to pay the self-employment tax. If this is the case, you will need to estimate your tax liability and send estimated payments to the IRS quarterly. For more information, go to theGig Economy Tax Center on IRS.gov.