The “Gig” Economy
North American firms are increasingly reducing their costs by changing
the nature of the relationship they have with their workers. Rather than
hiring full-time employees for specific positions, many firms are instead
hiring contract workers—individuals who engage in short-term
professional contracts with the firms. The skills of the contract workers
may be identical to those of the full-time employees. The important
difference is that the firm avoids making a long-term commitment to the
individual and also avoids having to provide costly benefits such as
pension or health benefits. For the individual workers involved, there is
usually less employment security and lower (or no) non-wage benefits.
This increasing importance of contract workers is now referred to as the
rise of the “gig” economy, in which workers have a series of temporary
contract arrangements rather than a full-time job with a single employer.
According to data from Statistics Canada, between 1997 and 2015 the
number of prime-age working Canadians with temporary jobs increased
by 38 percent; the number of “traditional” (non-temporary) jobs over the
same period increased by only 17 percent. Applying Economic Concepts
1 examines the gig economy in more detail.
Applying Economic Concepts 14-1
The Rise of the “Gig” Economy