The End of Nine-to-Five: The Inevitable Gig Economy

If you worked an office job many years ago and five o’clock rolled around, you would stretch, gather your things, and clock out for the day. Maybe you’d even leave a half-hour earlier if it’s a Friday. It’s five o’clock freedom and you’re probably running through weekend plans, chores to cross off your to-do list — anything other than your workday.

Speed up the clock to the dawn of a new decade: the 2020’s. Today, as five o’clock rolls around, you might not be thinking about weekend plans or chores or anything along the lines of your personal life. That’s because if you’re one of the many Canadians in the ‘gig economy’, the work day is done, but you’re not done working.

Defining the Gig Economy

The “Gig Economy” is a new work paradigm that has been gaining in popularity in recent years, largely as more people today rely on a secondary income or struggle to find full-time, stable employment. It describes the proliferation of temporary and flexible jobs that freelancers can pick up for quick pay. It’s a fragmented employment model where a worker has multiple shifts to work in a day or a handful of projects to make an income, being antithetical to the traditional nine-to-five shift that salaried employees would enjoy at a company they may expect to work at for years.

The success of companies like Uber, Lyft, Foodora, and many other players in the flexible workspace make these roles more accessible and popular to both casual freelancers and full-time gig economy participants. Other examples of gig work include freelance writing, doing small tasks for quick cash on a platform like TaskRabbit, and even renting out your property on Airbnb is included.

New Decade, New Economy

The surge in popularity over the last decade — particularly among younger workers — is no coincidence. The Millennial and Generation Z demographics have largely graduated from school into a world where there is a lack of stable, reliable employment. In a recent jobs report, Canada unexpectedly dropped 71,200 jobs in November 2019. This change represented the largest single plunge in employment since the year 2009, shifting the unemployment rate from a low of 5.5 per cent up to 5.9 per cent. Granted, the job market recovered with December data adding 35,000 jobs to the market and bringing the unemployment rate back to 5.6 per cent by the end of 2019.

The volatility in the data and the fact that the economy can shed so many positions seemingly on a dime shakes up the confidence Canadians have with full-time employment. The unstable job market is one factor lending to the reliance on gig work, but it’s also a reaction to shifting corporate cultures as large companies shift towards a less permanent workforce. According to a report by BMO Wealth Management, 85 per cent of surveyed companies envisioned themselves moving towards a more “agile workforce” with fewer permanent employees and more contract workers to stay competitive with other corporations. If companies act on this strategy, this probably means that more people will be pushed into gig work and would have to consistently hunt for their next job on a contractual basis.

Many lean on gig work over their college years to help cover the costs and lessen the debt burden after graduation. While the plan is to cease gig work once the graduate finds a full-time job, the time it takes to secure that role or the low salary it provides usually has younger people relying on the gig job for longer than expected.

A study by the Angus Reid Institute found that one-in-three Canadians have engaged in gig work in the past five years or are currently working a gig job. Women between the ages of 18 and 34 represent the largest segment of gig workers at 45 per cent — making up nearly half of the surveyed population. Men in the same age group come at a close second at 42 per cent. Unsurprisingly, this type of work is more popular with lower-income households, with 41 per cent of those surveyed in a household making $25,000 or less having participated in gig work. Other household demographics surveyed reporting higher incomes stood in the 30 per cent range.

To say that the gig economy solely impacts younger demographics would be inaccurate as recent reports like a survey from Ceridian showed that this flexible work arrangement appealed to older Canadians as well. Most older Canadians remarked that the flexibility appealed to them with a smaller percentage stating that a side hustle was necessary to supplement a fixed income. For Millennials and Generation Z, gig work is less of an elective. Even for mid-career working Canadians, the staggering costs of rent and grocery inflation far outpaces their income growth, prompting some households to get more creative. To navigate the soaring costs of living in major Canadian urban cities on entry-level salaries, many younger people have some form of an after-work job to help get ahead — or to even keep up.

Anyone working a gig job on the side will quickly tell you why it appealed to them: “It’s flexible, I can work whenever I want”. Being able to set your own hours makes this role scalable as a weekend job, a before- or after-work gig, or even a full-time pursuit. It has given more young workers certain opportunities and freedoms that a traditional office job might not be able to. For freelance writers, graphic designers and craftspeople, workers can set their own rates and give themselves the entrepreneurial opportunity of developing their own business. If it’s a case where the job is an elective for the worker as a means of making money on the side rather than a necessity to keep up with costs, the gig economy can be a great tool.

Looking past the enthusiastic hustle mentality that’s often conveyed in the gig economy, workers have also seen a darker side. In recent years, rideshare and food delivery workers have complained about unfair labour practices, safety concerns, and a lack of appropriate compensation. Some rideshare workers have complained about being deactivated from the app without any warning. With the rise of the gig economy came the rise of special interest groups and initiatives across Canada, like United Food and Commercial Workers (UFCW) Canada and the Canadian Union of Postal Workers (who have teamed up with Foodora couriers last year to push unionization).

The issue with this free market type of labour is that companies like Uber and Foodora classify these workers as contractors who aren’t eligible for benefits like sick leave, vacation, etc. This might be less of an issue for workers who do this work as a temporary side job, but for the workers who rely on these companies on a more consistent basis, their time and labour are taken advantage of. There’s no shortage of bad press surrounding these companies that disrupt local businesses and have sordid practices towards workers and customers alike.

From a personal finance perspective, there are a few pitfalls that gig workers can easily overlook in their drive to drive down debts or push up their savings. The income tax issue is an often over-looked trap: an employer will deduct the income tax for one job that a worker has, though once the worker begins balancing multiple jobs with varying employers, they can easily be knocked into another tax bracket and get hit with another liability come tax time. This is an issue that insolvency expert Scott Terrio sees often with gig workers when they file for insolvency at the Ontario-based debt relief firm, Hoyes, Michalos & Associates. “What happens is you’re actually getting taxed later by the CRA on the entire income, so the deductions weren’t enough,” Terrio told me, “So now you have a massive tax problem, or at least one you can’t handle.”

The irony here is that the attempt to pay down post-graduate debt via gig work could actually land you further into a spiral.

These are issues that come up if you succeed in getting paid. For a lot of freelance writers, graphic artists and programmers, payment isn’t always guaranteed if you’re dealing with a shoddy client. Browse any freelancer message board and you can’t miss the swath of horror stories of invoice-chasing professionals who did the work, but couldn’t secure the pay. One Reddit channel that highlights this problem in particular is /r/choosingbeggars where in addition to seeing the Internet’s most entitled always trying to get the best deal wherever they can, you’ll also find real cases of individuals expecting photographers, artists, web designers, and all other manners of freelancers to ply their trade for free.

Gig work isn’t always pull-yourself-up-by-the-bootstraps silver bullet to financial problems like it may seem at first, it could merely be putting a Band-Aid on the issue before an inevitable insolvency. That said, a new generation of workers are finding ways to make this new work paradigm work for them.

Conversations surrounding the gig economy are ramping up as these roles become more commonplace. Personally, I’m glad it’s there as a safety net when full-time positions are lost (which is a situation that yours truly is in), but we shouldn’t fool ourselves that this is an effective substitute for full-time work. Gig workers are no stranger to the ‘hustle culture’ that surrounds self-employment and working hard is virtually never seen as a bad thing. However, the constant 24/7 work schedule is giving rise to other common issues we see with the new economy: burn out, higher rates of stress and depression as well as a severe lack of a work/life balance is pushing people past their own brink — all seemingly in the name of ‘working for yourself’. Exhaustively hunting for another pay check or contract is a full-time job in itself.

I’ve been in the gig economy to some capacity since I was around 14 as a freelance graphic designer and writer. It’s something that I kept up with throughout high school, university, and even when I landed my first full-time job after graduation. By the time I was working nine-to-five, having a side gig was already so deeply ingrained in me that I couldn’t imagine dropping it altogether. Even after the student loan was killed with the help of this extra income, stopping gig work felt like I was leaving money on the table. After a recent job loss, I’ve returned to the freelancing community with ‘gig work as a double-edged sword’ mixed feelings: it’s helped me keep my income going, but it’s symptomatic of a faulty full-time employment market. I wondered if other gig workers shared the same experience.

Admittedly, when I spoke with frontline gig workers, I expected to hear stories from the trenches about the woes of having to rely on gig work to make ends meet and hear ‘if only a full-time, salaried office gig with benefits would come my way!’… What I actually came across was a group of people who really embraced the role and found freedom and opportunity in this new economy, though acknowledged its faults. For people with busy lives to balance, they found an employment model that they could shape to work for them. Some admitted that if they had the chance to hold a stable full-time position, they would never return to gig work again. For the sake of brevity here, I’ll turn the reader to the article I wrote for The Dales Report that held some of the anecdotes of gig workers I’ve spoken with. The opinion was pretty mixed, but one consensus was clear: love it or hate it, the gig economy isn’t going anywhere.

Chances are, behind the brimming-with-optimism ads of ride-sharing services and glitzy discount codes for food delivery services is an over-worked Canadian aiming to make ends meet. I think alongside the side hustle culture is a rise of entrepreneurship, but it’s essential to look out for the less savoury side effects of this pursuit. For freelancers, a negative side effect can be the constant concern of where the next pay check is coming from; for food couriers, it can be their own safety in highly trafficked urban cities.

It’s probably bad practice to end an opinion piece with an annoyingly ambiguous take, but there’s no sense in lamenting the death of a traditional nine-to-five work day nor should we celebrate the gig economy as a harbinger of financial freedom. It’s just a reality of the new economy that a new generation of workers will learn to thrive in.

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