The concept of a gig economy (a job market in which temporary, privately contracted positions are common, and more “traditional” forms of employment are less typical) sounds exciting to many workers. But, is becoming professional freelancers really in workers’ best interest, especially if it becomes the default? There are some upsides and some potential downsides to consider when trying to determine whether or not we should root for this sweeping change to our economy, and the way we work. Let’s take a look at just a few of the pros and cons.
Pro: The flexibility
The flexibility that freelancing offers workers, and their employers, is pretty tough to beat. It’s not just about being able to set your own hours and stay in comfy clothes all day. (There are some myths about working from home that you should know about, too.) Earning money this way allows workers to pursue all of their professional interests, no matter how diverse, rather than just settling into one job, and this is a pretty great thing. Additionally, businesses have more flexibility under this model. They can hire workers that are more directly aligned with their specific needs, even if those needs are only temporary, and they can usually pay these perfectly suited consultants less than they would if they hired them as full-time employees, once cost savings on benefits are factored in.
Con: No nest egg
Unfortunately, a lot of workers really don’t have any savings. In fact, 47 percent of Americans say they could not afford an emergency expense of $400, and more than 25 percent of Americans have no savings to speak of. So, for many, retirement savings is totally out of the question. However, for those workers who don’t have an employer-provided plan, like a 401(k), these figures only go up. About 70 percent of “1099 workers,” including freelancers and independent contractors, say they have no long-term savings at all. Of course, these workers know they should be saving, maybe as much as 10 to 15 percent of their regular earnings, for retirement, but that’s tough to do when work and pay is unsteady and without an employer-provided plan in place that supports and encourages the practice.
Pro: Variety and passion
The flexibility that gig-economy workers enjoy also affords them the opportunity to diversify and vary their work as they see fit. They are able to pursue their passions, even if the jobs they accept take them across industries. And, this is a huge benefit to them, not just because they are able to pursue their passions, but because the work they do on a day-to-day basis is varied. This cuts down on the boredom that sometimes (but not always) accompanies a steady 9-to-5 arrangement.
Con: The unpredictability
One of the most difficult things about participating in the gig economy is the unpredictability that comes with the territory. Jobs come and go, and nothing has that shine of reliability and permanence that comes with being a full-time employee. There is no guarantee for future work, or future income, and freelancers are incredibly vulnerable to ebbs and flows in the market and their industries. Freelancing can be great work, if you can get it. But, even once you have it, you’re still left crossing your fingers for the future. There is no room to take anything for granted with this kind of work. Instead, freelancers have to constantly hustle to obtain a fraction of the comfort and security provided by full-time employment.
Freelancing definitely isn’t for everyone, despite its potential benefits. Just be sure to weigh the pros and cons before making any bold moves.
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What are some other pros and cons of the gig economy? We want to hear from you! Leave a comment or join the discussion on Twitter.