“Gig” Economy Growing, But “Alternative Arrangement” Employment Bigger Share of Workforce

Anna Louie Sussman and Josh Zumbrun reported on the front page of Saturday’s Wall Street Journal that, “Older workers, especially women, increasingly are filling in as contractors across a range of traditional industries, from highway inspectors to health aides.

“As companies look to shed noncore tasks and government budgets come under strain, an expanding share of the workforce has come untethered from stable employment and its attendant benefits and job protections.

The explosive growth of Silicon Valley companies such as Uber Technologies Inc., where on-demand drivers summoned by an app set their own hours and are paid by the ride instead of an hourly wage, has shined a bright light on the so-called gig economy.”

The Journal article explained that, “Since 2005, the number of workers in alternative arrangements has climbed by more than half, rising to nearly 16% of the workforce from 10% a decade ago, according to forthcoming research by Alan Krueger of Princeton University and Lawrence Katz of Harvard University. Meanwhile, the on-demand workforce or gig economy employs only about 600,000 people, or less than 0.5% of the workforce, the research finds.

“Worries about the gig economy have ‘distracted us from this larger change that’s had more fundamental and pervasive effects,’ said David Weil, administrator of the Labor Department’s Wage and Hour Division, which enforces employment standards.”

Saturday’s article added that, “Companies seeking to reduce in-house operations have many options. Large staffing agencies like Adecco SA, ManpowerGroup Inc. and Kelly Services Inc. can place workers into a growing range of roles—including higher education, government and health care.”

Businesses seeking to expand increasingly have a number of options to explore when hiring personnel; in addition to the cost and availability of attaining extra workers, businesses will likely also want to consider the legal liabilities associated with part-time workers, independent contractors or third party agency employees.

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