While economists’ debate whether the U.S. can expect a recession, the job market remains incredibly strong. But how might a downturn along with inflation affect freelancers and independent contractors that fuel the growing gig economy? Our talent-coordinator teams regularly chat with these workers to gain insight and understanding into what they really are looking for and how can we improve their lives. We learned a few things. First, people who rely on gig jobs to make ends meet are impacted heavily by soaring prices.
Many of them need multiple side gigs to combat inflation so that they can better take care of their families. Also, there’s increasing competition for gig work. With more workers looking for side jobs, concern is mounting that fewer of these shifts will be available if there’s a serious economic downturn. Should a recession occur, and layoffs follow, companies will end up tapping more contractors to cut payroll and benefits. Moreover, newly unemployed full-time workers will turn to gig-work apps and compete with those who are already on such platforms.
And as difficult times squeeze household income, more working Americans will be subject to rising expenses that are outpacing pay increases. What’s also troubling is that so many gig jobs don’t reimburse for expenses like gas, while workers are expected to shoulder the cost of their own tools or supplies. In an increasingly competitive gig economy, freelancers will need to level up their skillset and understand the needs of a changing marketplace in order to better compete. In short, they will need to operate like business owners to ride out any downturn.