Jan. 12, 2022
A new labor market survey by the business analytics firm MBO Partners found that the number of gig workers in the United States surged in 2021, from 38 million to 51 million workers—a 34 percent increase. While it is far from clear if that growth will continue once the COVID-19 pandemic subsides, a slew of other recent studies indicate that the gig economy will likely continue to employ somewhere between a quarter to a third of workers for the foreseeable future.
Whether gig work is good or bad for workers and our economy—and, more importantly, who reaps the benefits from it—often depends on the type of gig work in question and on specific factors that dictate a person’s individual bargaining power in the labor market. Gig work can be very lucrative, and some gig workers, particularly freelancers with advanced degrees, earn good money while benefiting from the flexibility and autonomy that comes with being an independent contractor. But many other workers struggle financially, some because they are stuck in low-wage, dead-end gig jobs, and others because they have difficulty with the additional challenges that come with being a gig worker, from finding clients, to correctly estimating costs, to filing the right taxes.
In fact, succeeding as a gig worker requires knowledge and skills that can be hard to come by. Rideshare drivers need to know how to factor in items like gas, repairs, and taxes to their daily take-home pay to know how much they really earn. Freelancers possess valuable technical skills, such as coding, graphic design, or multimedia production, but their education often does not include information on how to set up a limited liability corporation, what to do if your client doesn’t pay, or how to get health insurance. Indeed, a survey of freelancers by the platform company Upwork found that 89 percent wish their education had better prepared them for freelance work.
Case Study: California’s Gig Economy Pilot Project
What can higher education do to better prepare and support gig workers so they can thrive in the gig economy? California’s Self-Employment Pathways in the Gig Economy Pilot Project, launched in 2018 by the state’s community college system, offers some helpful lessons. Twenty colleges participated in this year-long pilot, which sought to prepare students for careers in the gig economy, particularly as freelancers and independent contractors.
The pilot tasked each college with designing and delivering a three-course program, the first of which focused on how to run a small business, including basic topics like licensing, insurance, and taxes. The second course explored how to use online freelancing platforms like Upwork and Fiverr, through which students could learn how to choose a platform, how to secure work opportunities, and when to walk away from jobs. The third course was experiential, allowing students to work one-on-one with a mentor who provided business planning and consulting support and guided students to launch or improve their own business. Colleges could offer courses on a stand-alone basis or embed them into existing, relevant, for-credit courses.
Cabrillo College of Santa Cruz County participated in the pilot program. Located just 40 miles south of Silicon Valley, Santa Cruz offers a vibrant local arts scene, and has the fifth highest concentration of artists per capita in the U.S., after New York City, Los Angeles, San Francisco, and Sante Fe. College leaders, including John Graulty, dean of visual, applied, and performing arts, sought to create an arts entrepreneurship program at the college that would guide students and local artists in the community to create their own sustainable careers in the arts. Through the Gig Economy Pilot Project, students had access to Small Business Development Center (SBDC) advisors on Cabrillo’s campus, who helped them develop business plans, define their products, and find clients and customers through online gig platforms. Students also had access to the Cabrillo College Makerspace and opportunities to work on short-term projects for local employers, allowing them to hone their technical, creative, and business skills.
Charles Eason, the statewide director for business and entrepreneurship for California’s community college system, was in charge of implementing the pilot program. He believes it made a difference, empowering students to take on more gigs, grow their portfolios or businesses, and expand their customer bases, either through gig economy platforms or by creating their own websites. One Cabrillo College student, for example, worked with an SBDC advisor on campus to develop a business plan for his graphic design business, focusing on branding for small and mid-sized companies.
Lessons Learned and Design Considerations for Future Initiatives
Community colleges are well situated to provide gig workers with professional development opportunities. After all, community colleges are open-access institutions that are embedded in and focused on serving their communities, and they are geographically accessible to many people. Community colleges are also already focused in many cases on preparing students for the workforce. Yet the pilot project in California also revealed significant challenges in meeting the needs of gig workers, and any future effort to serve gig workers through the higher education system will need to weigh the following considerations and challenges:
- Program impact can be hard to capture. It’s difficult to measure the impact of these courses. Do they help students launch their business, get better gigs, and increase their earnings? The pilot in California did not include an evaluation component, making it difficult to know how well the program served students who participated and if it helped them make career gains. Gig workers are difficult to track in the labor market since their employment and earnings status do not show up in state unemployment insurance wage record data, which is the primary means by which colleges track student labor market outcomes. Moving forward, colleges and state policymakers will need to think carefully about how to capture the impact of interventions aimed at supporting gig workers.
- One size does not fit all. Gig work encapsulates a range of work, from highly-paid tech freelancers to app-based house cleaners struggling to make minimum wage. In the California pilot project, participating community colleges focused on preparing students for potentially lucrative careers as freelancers, rather than preparing them for gig work that would give them little control over their gigs or pay, such as rideshare driving or food delivery. But even among freelancers, people will have different needs depending on where they are in their educational and career journeys. That is, people looking to break into freelancing or grow their businesses and skills will have different needs than students who are still preparing to launch their careers.
For degree-seeking students interested in working as freelancers after graduation, it will be important to embed gig economy courses into existing degree and certificate programs as part of the curriculum, or to create new, for-credit courses. These students may benefit from information on what freelancing is, what the pros and cons of freelancing are, and how to find freelance work from app-based platforms.
Existing freelancers, on the other hand, may benefit from stand-alone, noncredit programming, such as workshops on how to grow their business or opportunities to learn new technical skills. Survey data indicate that skill-building is important to freelancers, as it allows them to stay competitive in the labor market. New America’s own research indicates that freelancers may benefit from access to free or low-cost skill-building opportunities and the ability to earn credentials that recognize those skills as they pursue new clients.
- Some need a path out of low-quality gig work. Certain forms of gig work, such as rideshare driving or food delivery, can be exploitative. For this reason, many gig workers may want to transition out of this work, but they may find it challenging to do so, particularly if they don’t have a good sense of how to navigate a career transition or they lack the resources to do so. These workers may need help transitioning to employment that pays more and offers benefits and stable schedules. To make these transitions, gig workers may benefit from meeting with community college counselors and enrolling in community college programs. Community colleges can also partner with other organizations, such as worker centers, which advocate on behalf of low-wage workers, including gig workers. Forging these relationships could connect these workers with resources to transition out of gig work as well as to improve gig working conditions and build gig worker power.
- It’s easy to oversell the gig economy. Making a living as a gig worker is challenging. The most successful workers also tend to be those with higher levels of education—bachelor’s degrees and beyond or highly-valued technical skills, and often both. Higher education institutions typically market programs to students that promise to connect them to employment that will provide a return on their investment in education. In the case of the gig economy, it will be important for colleges to ensure they are connecting people with high-quality gig work that pays well and provides individual gig workers with power in the labor market.
The gig economy can be a source of good, fulfilling work, but this work can also be unforgiving and even exploitative to those not in lucrative fields or who lack the knowledge to navigate it. Community colleges could play an important role in helping current and prospective gig workers understand and navigate the gig economy and learn how to be successful in it. The Gig Economy Pilot Project at California’s community colleges illustrates what these kinds of efforts might look like and reveals important lessons on how to ensure the success of such efforts moving forward.
 For the purposes of this brief, “gig worker” includes people performing tasks such as rideshare driving and food delivery, which can be low-paying and exploitive, as well as people performing freelance work in fields like information technology, which can potentially be very lucrative.