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Gig ‘electronically mediated work’ triples: report

July 12, 2019

The number of American doing electronically mediated work tripled over the past five years, but income from this work still accounts for less than 1% of total income, according to a report released this week by the National Council on Compensation Insurance.

NCCI’s report describes “electronically mediated work” as cases where workers are connected to clients or jobs through a website or app such as Upwork or TaskRabbit. The work can be either online or in-person. It also looked at nontraditional, contingent work overall. While some people refer to this as "gig economy" work, Staffing Industry Analysts' definition of the gig economy includes all forms of contingent work from online staffing to traditional agency temporary workers.

The report cites the potential impact of nontraditional work on workers’ comp usage.

“From the perspective of workers’ compensation, what matters most is how fast nontraditional work is growing and what it is displacing,” according to the report. “If electronically mediated work is drawing in workers who value flexibility and would otherwise work as independent contractors, then these workers would have been outside the workers compensation system anyway. But if it shifts workers from traditional wage and salary employment to the gig economy, then this will decrease payroll in the workers’ compensation system.”

The report found 4.5% of US households earned some income from electronically mediated work between April 2017 and March 2018; that is three times higher than the percentage from October 2012 to September 2013.

However, most people who performed electronically mediated work did such work only occasionally.

“This insight is borne out by electronically mediated work’s share of total income,” according to the report. “Households earned one-fifth of their yearly income from electronically mediated work. Even restricting attention to only the months in which they did this type of work, half their income came from other sources. And, of course, the other 95% of households never earned electronically mediated income at all.”

Looking at nontraditional work overall, the report pointed to data that found 70% of workers are independent by choice rather than by inability to find a wage-and-salary job.

Other data in the report:

  • Most workers in nontraditional work arrangements earn less than a quarter of their annual income from these sources.
  • The proportion of self-employment and nontraditional work arrangements has not increased in the last 15 years with regard to primary employment.
  • Several states have considered whether nontraditional workers should be employees or independent contractors, but the stance has not been consistent across states.

One of the findings in the report’s conclusion is that payroll employment may go to nontraditional work in the next economic recovery.

“When firms shed payroll in a future downturn and workers have difficulty finding traditional jobs, then the labor supply for nontraditional work will increase,” the report stated. “At the same time, cost-cutting firms will have incentive to experiment. If firms and at least some workers favor new arrangements, then payroll lost in a recession is likely to shift to nontraditional work during recovery.”

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