Work & Money

What you need to know about the future of the gig economy — whether you're in it now or not

Canada’s digital economy is bigger than you think.

Canada’s digital economy is bigger than you think

(Credit: iStock/Getty Images)

I'm a poster-child for the gig economy. When I went freelance at the end of 2017, I started piecing together the different writing, production and public relations jobs that now make up my entire income. The fear that I haven't read a contract closely enough or that a client might stop needing me is always nudging at the back of my thoughts, I don't have dental or drug coverage and I haven't put money into my RRSP in two years. 

Then again, I'm one of the lucky ones who chose this lifestyle out of a desire for flexibility, and not out of necessity or lack of opportunity.

Just how big is Canada's online gig economy?

Earlier this year, Statistics Canada published data showing Canada's digital economy made up 5.5 per cent of total Canadian economic activity in 2017, more than mining and oil and gas. 

"That data point is probably a significant underestimate of the size of the digital economy in Canada," says Danielle Goldfarb, Head of Global Research at RIWI Corp, a global trend-tracking and predictive analytics firm, and one of Canada's top trade experts. 

The gig economy — driving for Uber, renting out your home via Airbnb, selling services or products through the internet — is just part of the larger digital economy. And Goldfarb says that traditional measures of the labour market and of the product-driven economy don't account for the increase in the global sale of services that the internet has enabled

"The official data sources on employment tend to ask people 'do you have a job', 'are you looking for a job,' but they're not really asking about this range of activities that now exist," says Goldfarb.

Just how much we're underestimating the role of gig work in Canada's economy impacts our understanding of how the economy is doing overall, whether we're heading into a recession, and if people are paying their taxes. It also impacts how we and our political representatives think about job security, social welfare supports and education, and how we should prepare for the future of work.

"It's one of those things that can help us understand these bigger trends that we're seeing out there and yet it's really very, very poorly tracked," says Goldfarb. "If you measure something then you can actually take action to either mitigate the negative parts of it and encourage the positive parts of it. But if you don't even know what's happening, then it's really hard to take those kinds of actions."

Freelance work as a primary income source 

To complement existing economic measures and provide more comprehensive real-time tracking of online-enabled work, RIWI has developed a new global indicator based on sampling the broadest possible segment of the internet-using population, including immigrants and young people who are often missed by traditional surveying methods and who are some of the most active participants in this type of work.

"These are exactly the kind of people that we really need access to, to be able to understand these trends," says Goldfarb — and to understand if they're driven by having no other employment prospects, or by a desire for flexibility and entrepreneurship.

Between November 2018 and February 2019, RIWI's global indicator of online-facilitated gig work collected observations from over 30,000 people in 43 countries, including 12,000 respondents aged 18-24, and another 12,000 aged 25-34. The survey asked questions about selling freelance services such as writing and graphic design online, selling crafts or other products online and using online apps such as Uber or Airbnb to make money. 

In Canada, RIWI's findings show that 19 per cent of internet users report that freelance work is an important income source, and that for 8 per cent of them it makes up half or more of their income. Canada trails only China and Nigeria in engaging in this kind of internet-enabled work.

Goldfarb says so far, the data RIWI has collected indicates that the gig economy is not yet mainstream, but it's more important than people think. This is particularly true for young people aged 18-34, one in five of whom say 'gig' work is their main source of income.

A Bank of Canada survey published in 2019, which also looked at the prevalence of gig work, found that up to 58 per cent of youth (aged 17-24) and up to 30 per cent of all Canadians are participating in some form of "informal work", says economist and Atkinson Fellow on the Future of Workers, Armine Yalnizyan. Young people, says Yalnizyan, have always been more likely to pick up on-demand labour, whether it is their main job or a side-hustle.

Who does it make sense for?

Despite no longer qualifying as youths, in my immediate circle of friends alone, seven people, including myself, have transitioned in and out of some mix of full-and part-time freelance or remote work over the past two years. 

In RIWI's data, 60 per cent of gig-workers worldwide said they chose this type of work because they liked the role, the extra money, or the flexible hours, versus 40 percent who said they needed the money or had no other alternatives for making an income. RIWI says this is "largely consistent across developed and developing economies, genders, age cohorts, and even across the type of work." 

And yet Goldfarb points out that whether the gig-economy holds positive opportunities for workers depends, in part, on the kind of work being done. 

"If you're doing computer programming or things that are highly valued by the global marketplace, you can do a lot better in the gig economy," she says. 

So should non-gig workers anticipate that they too will have to make the transition this type of work in the near future?

With both the RIWI and Bank of Canada surveys a one-off, Goldfarb and Yalnizyan say it's too soon to tell. 

"It is unclear if this a temporary issue, until more seniors actually retire, and younger workers are hired into those permanent, full-time jobs; or if the 'youngs' are the shock troops of a new just-in-time/on-demand labour market," says Yalnizyan. "One could argue that an aging population will mean that, as more people retire, the demand for labour will be so wide-spread and acute that younger workers will be able to bargain for much better working conditions," whether that amounts to changes in wages, benefits, or time flexibility.

Goldfarb hopes that within the next six months to a year, RIWI's continued real-time tracking of this data can give them a better sense of how the gig economy is changing and growing. 

In the meantime, she says we have to be prepared for the possibility of multiple jobs, sources of incomes and ways of doing things. 

"I don't know what the next big innovation will be, or technological development will be, but we need to be able to be flexible and prepared for all kinds of different possibilities in our work lives going forward… maybe the advice is that we shouldn't be necessarily all planning for conventional jobs," says Goldfarb. 

She notes that a decade ago remote work would have been unfathomable. Now it offers new opportunities for people living outside of major metropolitan areas, and is increasingly common even for those in full-time jobs.

But technology is a double-edged sword which can create both opportunity and increased competition. "Neither is guaranteed," says Yalnizyan. "Technology makes it more possible for more people in remote locations to participate, in theory, but technology also makes it possible for way more competitors to do the same work...this may create more precarious forms of earning a living, but more opportunities to earn than before, particularly if the demand is locally specific [and] cannot be provided from afar."

Which way it goes, she adds, will depend on bargaining and resistance on both sides of the employer/employee relationship and on the demands on political representatives to change policies, improve worker protections and improve access to training. 

"There's no rule book for these kinds of things… policymakers and business — everybody's making up the rules as they go along," says Goldfarb. 

She says that if we want to be able to address the critical questions raised by the gig-economy effectively, questions like whether people will have job security, access to social welfare supports like healthcare, or be able to secure credit or a mortgage, "we need to be prepared with data on what is actually happening out there."

Eva Voinigescu is a freelance journalist and producer. She writes about health and science, careers, and culture.


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