These days, it can seem like the gig economy is taking over traditional work. According to a study by TransUnion, gig workers represent approximately 11% of Canada's workforce. The allure of freelance work is hard to resist: being your own boss, having flexible work hours, and a low barrier to entry. But gig worker jobs often can't replace a sustainable career.
Let's explore more about the gig economy and whether it really is a reasonable replacement to more traditional employment.
The Reality of the Gig Economy
A gig worker is defined as an independent contractor. That means they perform specific, often more timely tasks for various clients or platforms and do not maintain an ongoing employment contract. This definition opens up a broad professional range, from Uber drivers to childcare. It also spans across many different demographics. According to the same TransUnion study, millennials take up the most gig economy jobs, while Gen X and Gen Z are also significant portions of Canadian gig workers. However, 63% use gig work to supplement an already full time income and 39% report making between $1,000-$4,000 after expenses.
The Net-Income Reality
Revenue is not the same as profit. Seeing a large payout on a dashboard is misleading if you fail to subtract the underlying operational costs of your business. Gig workers must account for hidden overheads from software subscriptions and high-speed internet to vehicle repairs and hardware depreciation. These costs have to be subtracted from gross revenue to determine your actual hourly wage.
On top of overheads, you are responsible for the full burden of your self-employment taxes. Setting aside a significant percentage of every payment for tax obligations is non-negotiable when working in the gig economy.
The Challenges of Gig-to-Gig Work
As many gig workers will tell you, the work is not without its challenges. The biggest one is the unpredictable cash flow. Gig-based workers often face arbitrary changes in pay structures or shifts that can unexpectedly lower income levels. One month, you might make enough to cover your bills but fall short the next month while still having payment obligations.
Also, as an independent contractor, traditional labour protections rarely apply. In 2022, Ontario passed the Digital Platform Workers' Rights Act. While this created much-needed protections, they are not nearly as sweeping as those with non-gig economy positions.
The Benefits of Temporary and Part Time Positions Over Gig Economy Jobs
There is still much to be gained from more traditional employment, even competing with some of the benefits of gig economy jobs. Temporary and part time positions provide flexibility, offering a short term schedule and the option to seek other forms of employment at the same time. These opportunities also allow you to switch bosses and workplaces, even shift times, until you find a place or area of expertise that feels right to you. You may even find temporary or part time jobs that can transition into full time work or give you the chance to fill gaps in experience that might have previously prevented you from being hired. Not to mention, there is less overhead and more protection as you are still part of a traditional model.
Liberty Staffing Services Matches You with the Right Job
Even if the gig economy is not your answer to making a living, there are still plenty of opportunities out there. Liberty Staffing Services has made it our mission to match job seekers with positions across Southern Ontario, where they can succeed, whether temporary, part time, or full time. If you're looking to avoid the gig economy or want to leave the gig-to-gig model for something with more stability, we are here to help.
Contact us to speak with one of our employment experts.
