The unstoppable rise in the gig economy
53 million Americans, or 34% in the workforce, are now 1099 workers. The category covers the entire spectrum of freelancing, from independent contractors, to temps, and also on to occasional moonlighters. The amount of 1099 contractors is anticipated growing by over 4% per year through 2020 close to 66 million people. The excitement is driven with a blend of new technology and age-old incentives. Freelancers are less expensive for businesses who eliminate payroll costs and benefit outlays, while staff are granted greater flexibility. A Roosevelt Institute/Kauffmann Foundation joint report argues that, by 2040, the united states economy is going to be "scarcely recognisable".
�The gig economy now makes up about a 3rd with the American workforce.
�By 2020 66m Americans are anticipated to get freelance or 1099 workers.
Does everyone really want the gig?
Is 1099 the real code for our age?
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The attractions to be a 1099 are certainly not universal,
because of the deficiency of employment and employment rights. 53% of people freelance by choice, 47% beyond economic necessity. While many contractors revel in the flexibleness and control freelancing can provide, other people are increasingly keen to win employee status. Particularly in blue-collar segments a smaller, but growing amount of Uber drivers as well as other 1099s employed by Postmates, Lyft and Washio are fighting lawsuits being considered employees instead of contractors. Housekeeping start-up, Homejoy, closed partly on account of the body weight of which lawsuits. The rise from the �gig economy� presents governments with serious problems. While entitlement systems are made around the conception of your fixed job, revenues from payroll taxes are set to fall sharply.
Current legislation not designed for today�s economy
A number of analysts believe that a sudden change in legislation is essential with the introduction of an intermediate classification between �worker� and contractor�. Germany's "dependent contractor" status offers a model which combines protection with flexibility. Simon Rothman, an angel investor in delivery service platform Sprig, argues for the adoption of such one. Noting that 38% of on-demand personnel are shown interest in multiple companies, he would like to see personalized healthcare travel together with the employee. In accordance with tech evangelist Tim O'Reilly, however, legal changes total nothing more than a sop. Reilly indicates that companies who are nervous of legal actionare already switching workers from 1099 to W2 tax codes and they are capping employees' hours in order that they become part-time and do not receive benefits. "We've basically gutted wages for professional, and we're wondering what's happening", according to him.
Exactly what the brains think�
In June, a McKinsey Global Institute Report suggested that online talent platforms - including project sites like Monster.com, to digital marketplaces like TaskRabbit and talent management agencies such as PayScale and ReviewSnap - could boost global GDP by 2% or $2.7 trillion by 2025. Platforms might have the positive impact of increasing employment by 72 million full-time equivalents. The authors argue that an effective transition to the �gig economy� requires not only new labor market regulations, and also affordable broadband access for many and clearer rules in the thorny parts of data ownership and privacy. consultant