Nov 28, 2023 - Economy

America's gig workers are hiding in plain sight

Illustration of an upward trend line over a group of people, with others in the background grayed out

Illustration: Annelise Capossela/Axios

Millions of Americans are doing casual work while not counting as employed for the purposes of the government's official statistics, based on new research that sheds light on the true prevalence of informal gig work.

Why it matters: If more Americans are open to working than is implied by traditional economic data, the job market may be less tight than it seems — with more people open to opportunities for higher-paying, more stable work.

The details: The share of adults who are counted as employed would be higher by up to 5.1 percentage points (using generous estimates) if the people doing causal gig work properly reported doing so in the Current Population Survey, on which the jobless rate is based.

  • That's from a paper by Anat Bracha of Hebrew University Business School and Mary A. Burke of the Federal Reserve Bank of Bost0n, presented earlier this month at a conference.
  • Using more conservative estimates, the employment-to-population ratio would have been 0.25 to 1.1 percentage point higher from 2015 to 2022.

State of play: Uncounted gig workers are disproportionately older, more likely to be disabled and less likely to be doing casual work as a primary source of income.

  • Imagine, for example, a retiree who babysits a neighbor's child a few hours a week in exchange for cash.
  • When the CPS asks whether they have worked in the preceding two weeks, they may answer "no," not thinking of their casual gig as a job.

Yes, but: Bracha and Burke took a novel approach to probing just how many of the people who say they aren't working in that survey actually are not.

  • Using a separate survey, the New York Fed's Survey of Consumer Expectations, they first ask the same questions as the CPS to identify people who would be classified as either unemployed or out of the labor force in the official statistics.
  • They then asked those people about specific paid activities they may have undertaken — house cleaning, driving for Uber and so on.
  • Those answers revealed uncounted Americans who are earning money in exchange for work but do not answer as such when first asked.

What they're saying: "There are reasons for thinking about gig work differently with respect to labor market slack," Bracha and Burke write, "because it points to a hidden labor supply that could be tapped by traditional employers."

  • "Many gig workers in our survey reveal a preference to work additional hours on top of either a part-time or even a full-time job, and often for very low pay," they write.

The bottom line: The uncounted gig workers may be an untapped source of new labor supply, as their side-jobs indicate some desire to earn more money.

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