What is the gig economy?
The gig economy is an informal labour market characterized by temporary, short-term, or contract work. Gig workers are independent contractors, meaning they aren’t salaried and they contract their services out on an “as-needed” basis. Rather than commit to working long-term for one company, gig workers enter into contracts with multiple firms or individuals to complete specific tasks or to consult and receive a negotiated sum for their work.
When you hear “gig economy,” you may think of Uber drivers. That’s because Uber is a multinational that (for better and for worse) made a name for itself early on as a technology platform for workers in the gig economy. Uber drivers work in the gig economy, as do dog walkers, couriers, AirBnB hosts, and babysitters – likely the world’s oldest profession in the gig economy. And, of course, there’s an entire subsection of those working in the digital economy, including graphic designers, web developers, video producers, writers, and translators, who are also considered gig workers.
The gig economy in Canada
Getting reliable statistics about the gig economy in Canada is difficult precisely because the sector is so informal. It’s simple to measure and track the energy sector, for example, partly because those jobs tend to involve companies with HR and accounting departments that pay close attention to numbers and associated paperwork. The gig economy has much less structure and is not organized around employers and employees. That said, we do know it’s massive.
A 2019 Angus Reid report estimated that 17% of Canadian workers are currently engaged in the gig economy and that more than 40% of Canadian millennials have participated in “the gig economy” over the past five years.
Aside from its monumental size, Statistics Canada found that women are more likely than men to be gig workers—9.1% and 7.2% respectively. Gig workers tend to be low-income earners, with the median net income from gig work being $4,303. It’s not surprising that nearly half combined their gig work with another job. A Bank of Canada survey published in 2019 reported that up to 58% of youth aged 17-24 are participating in some form of informal work, nearly double the 30% of Canadians in general.
There’s significant variation in these numbers, but they all paint a similar picture millions of Canadians, often those who already have unsteady employment or are otherwise disenfranchised, work in the gig economy.
What are the pros and cons of being a gig worker in Canada?
Gig work has a lot going for it, the bulk of which boils down to one word: independence. When you work in the gig economy, you can find flexibility and choice in everything from the type of work to making your own schedule to the number of hours you invest. This can be a huge benefit to students, parents, or any other worker with outside commitments or goals. There’s even the possibility of a completely nomadic lifestyle for those who deliver their products or services online.
All of that said, there are some serious drawbacks. The first and perhaps most important is that the potential independence promised by the gig economy comes at a significant cost—one that the very people who tend to do gig work may not be able to bear. For some jobs, like ride-sharing for example, the pay is very modest. Low pay means that workers must put in more hours to make ends meet—hours that they aren’t guaranteed in the first place. Some find they need to patch together work doing several kinds of gigs across platforms to make the money they need to survive. For those in this situation, there’s at least as much stress and hustling involved in gig work as there is independence.
Further, gig workers don’t get benefits like extended health coverage or vacation pay. They’re responsible for holding back their own taxes. They aren’t allowed to organize or engage in collective bargaining. Gig workers have to cover all the costs associated with the equipment (like a computer or car) needed to do their jobs. Plus, they’re not part of a corporation so expenses like insurance fall to the individual worker.
Insurance is a bigger issue than you might think. Some content creators, like writers, are required to carry liability insurance. Particularly for workers with dependents, critical illness and disability insurance are essentials. And, although it’s hard to think about, carrying life insurance is a smart choice. At a minimum, workers should protect themselves with some sort of business insurance.
Where can you get financial help as a gig worker in Canada?
For a long time, freelancers of all stripes had a hard time getting financial help because lending institutions like banks weren’t set up to process their applications. It’s easy to show your income and forecast your future financial picture when you have a stack of regularly issued pay stubs in hand. Piece-work, contracts, and short-term jobs don’t lend an air of financial stability, despite what an individual worker’s credit score looks like. In short, banks considered freelancers high-risk.
This is less true today, and that’s in good part due to the rise of the gig economy. With so many Canadians making some if not all of their income in the informal labour market, there has been a greater push for institutions to evolve. With as many as 40% of Canadian millennials working in the gig economy, financial institutions simply aren’t serving their communities if they don’t support gig workers.
With the COVID-19 crisis, the Canadian federal government launched three recovery benefit programs for those who don’t qualify for employment insurance: the Canada Recovery Benefit, the Canada Recovery Sickness Benefit, and the Canada Recovery Caregiving Benefit. But these are temporary benefits related to COVID-19 and the support programs are due to expire in a year.
Gig worker vs. independent worker
“Freelancer,” “self-employed,” “contractor,” and “independent worker” are all terms used to describe gig workers, and all will get the point across in day-to-day communication. The definition, however, has become a legal issue with broad implications.
At the heart of the question is whether the relationship between a tech platform or company that facilitates gig work and the gig worker can (or should) be classified as employer and employee. Employees are entitled to a minimum wage, overtime, and regular breaks, not to mention health insurance or vacation pay. Contractors are not. Many companies servicing the gig economy classify their workers as contractors, but there are numerous forthcoming legal challenges that will undoubtedly shift the conversation. For now, Canadian gig workers don’t have a legal definition. In the meantime, they remain contractors without the same benefits or rights as employees.
Gig work can be low-paid, intermittent, and insecure—but you shouldn’t write it off completely. Independent workers can generate an income from a wide variety of skills or aptitudes, even everyday abilities like driving or simply renting out an extra room. Online gigs like selling products or offering digital services don’t even require you to leave the house.
Last words
The gig economy may not be perfect, but it is continually growing. Jobs in the informal economy are here to stay and with them, the drive for better working conditions. If you’re looking to start a business or even find a decent side hustle, the gig economy is open for business.
