Gig employment is on the rise in many urban areas where job cuts are felt most keenly, Goldman Sachs said.
Contraction in the country’s labor market amid widespread layoffs among major employers is leading to an increase in the number of people joining the ranks of the gig economy, according to a Nov. 17 report by Goldman Sachs.
Between 5 percent and 15 percent of Americans are supplementing their income through gig work, which includes temporary contract and freelance work, as well as platform-based gig jobs such as driving for Lyft or delivering for Uber Eats, Instacart, or DoorDash, according to the report.
About 20 percent of current gig workers either lost a job, took a pay cut, or faced reduced hours over the past two years and turned to gig work, the analysis found. Almost half of all workers in the gig economy take on gig work to supplement their primary income, while 15 percent are gigging as their main source of income.
The rise in gig employment comes amid a widespread cooling in the U.S. labor market and large-scale job cuts by companies such as Amazon (14,000 positions) and UPS (48,000 jobs) in recent months.
Challenger, Gray & Christmas reported in early November that U.S. employers shed 153,074 jobs in October—the largest number of monthly job cuts since the Great Recession.
“This is the highest total for October in over 20 years, and the highest total for a single month in the fourth quarter since 2008,” Challenger stated.
In the 10 months ending on Oct. 30, nearly 1.1 million jobs were lost, according to the company.
The U.S. economy has shifted in recent months to a heightened risk of rising unemployment, said Philip Jefferson, vice chair of the Board of Governors of the Federal Reserve System.
“Information available in recent weeks appears to be consistent with a gradual cooling in both labor demand and labor supply,” Jefferson noted in a Nov. 17 speech in Kansas City. “Unemployment insurance claims received from states have largely moved sideways in recent weeks. … I expect that the unemployment rate is likely to inch up slightly by the end of the year from the relatively low 4.3 percent rate recorded in August.”
By Rob Sabo
