Monday, October 26, 2015

"An Enduring Mystery of the ‘Gig Economy’: Why Are So Few People Self-Employed?"

From Real Time Economics:
The Pew Research Center has a new report today that looks at self-employment in the U.S. and its role in creating jobs. But the data in the report exposes one of the more perplexing mysteries about the modern economy: Despite all the discussion that the U.S. is transforming into a gig economy, the share of people who say they’re self-employed is declining.
This trend, especially among unincorporated, self-employed workers, has been in place for some time. We noted over the summer that it’s hard to find high-quality statistics backing up the idea that the gig economy has grown enormously. In fact, it appears that the overall economy is getting slightly less “giggy” over time. 
The Pew report provides a detailed breakdown of the demographics of the self-employed and how many of the self-employed have employees of their own. But the report doesn’t attempt to answer why the supposedly widespread gig economy is so elusive. 
One theory is that the data comes out with a lag and the rise of the gig economy will soon become apparent. But Pew’s preliminary estimate of last year’s self-employment finds another slight decrease. 
What are possible explanations for this? 
One possibility is that while some very high-profile companies are using the gig model, it’s actually not very common when you look across the entire 157 million-person U.S. labor force. (People often use the expression “Uber and its ilk,” as if there are dozens or hundreds of companies just as large as Uber in every industry. It could be that a fairly small handful of these companies actually have any significant scale.)...MORE