A lot of Americans are doing work on the side these days. This is not apparent in the monthly employment data, which showed only 4.6 percent of workers holding multiple jobs in June, down from more than 6 percent in the mid-1990s. But evidence has been emerging in dribs and drabs from other sources. Here’s a new drib, courtesy of the Federal Reserve Board’s “Report on the Economic Well-Being of U.S. Households in 2015,” which came out in May but hasn’t gotten a whole lot of attention:
“Twenty-two percent of employed adults indicate that they are either working multiple jobs, doing informal work for pay in addition to their main job, or both.”
Of those, half (11 percent of employed adults), reported doing informal work, which the Fed survey described to respondents as work for pay that is not a formal job and “may include activities like selling items you make at flea markets or online; freelance work through companies like Uber, Care.com, or Airbnb; or providing services for others like paid child care or yard work.” Of those who didn’t have a formal job (and weren’t either students or retirees), 27 percent reported doing informal work.
The monthly jobs survey administered by the Census Bureau for the Bureau of Labor Statistics does not specifically ask about this kind of “gig” work. Neither, for that matter, does the survey of “Contingent and Alternative Employment Arrangements” that the BLS is planning to resurrect next year after a 12-year hiatus (and that economists Lawrence Katz and Alan Krueger commissioned a smaller version of last year). That survey focuses on independent contractors, on-call workers, temps and the like, but isn’t really set up to capture things like selling stuff at a flea market or renting out your apartment on Airbnb.
The new Fed survey does not show whether informal work is on the rise – although others have looked at the number of 1099-MISC nonemployee-compensation forms filed with the Internal Revenue Service through the years and concluded that it is. What the Fed does offer is a fascinating breakdown of the incomes and educational backgrounds of those who do informal work. Having a low income means you’re more likely to do informal work, which is not surprising. But being more educated also means you’re more likely to do informal work.
Steve King of Emergent Research, who tipped me off to the Fed survey, wrote in an email that this was consistent with the results of a survey of on-demand-economy (ODE in the following passage) workers that he designed for Intuit last year:
“Part of this is age. Younger people are more educated on average than older and the ODE workforce skews young. Those aged 19-34 make up 38 percent of the ODE workforce and about 30% of the U.S. population. But this only explains part of it.
“We think the other issue is many of the jobs available in the ODE require skills. Marketplaces like Fiverr, Upwork, Hourly Nerd, etc. are all skills based. Not surprisingly, the folks working via these sites have higher education levels than average.
“But even things like Uber, Lyft, Task Rabbit and especially sites like Etsy and Airbnb require good online skills. We think this leads to higher education levels.”
Another way of looking at the Fed’s income-education breakdown, though, is that the on-demand or gig or sharing economy is being powered in large part by highly educated people who cannot get steady jobs that pay well. Last year freelance journalist Monica Potts wrote a long lament for the Washington Monthly subtitled “How the ‘sharing economy’ allows Millennials to cope with downward mobility, and also makes them poorer.” I found it affecting, but wasn’t convinced that it applied to more than a few liberal-arts-college graduates in a few coastal cities. Now I’m starting to think it might be bigger than that.
© 2016, Bloomberg View