The Gig Economy Never Really Happened, Say the Economists Who Predicted It

January 7, 2019, 2:39 PM UTC

The gig economy was supposed to be the future of work. All generations wanted the freedom and short-term contract work was the new norm.

At least, that’s what the experts had said. But two of the most well-known economists—Alan Krueger of Princeton University and Lawrence Katz of Harvard—now say their influential 2015 study was wrong, as the Wall Street Journal reported. What threw them off was inadequate data and the recession.

Back then, Kreuger and Katz asserted that the nature of work was changing. People were creating a living out of odd jobs through smartphone platform apps such as Uber and TaskRabbit.

But over time, the expected changes didn’t come. The Bureau of Labor Statistics found that between 2005 and 2017, virtually nothing had changed in the world of work. People in “alternative work arrangements” made up about 10% of the total workforce. As the New York Times pointed out, that was down from 11% in 2005.

Even more people held regular jobs. At the time, Michael R. Strain, director of economic policy studies at the conservative American Enterprise Institute told the Times, “I think everybody’s narrative got blown up.”

Indeed. According to the two academics, the gig economy seemed to explode as people were taking part-time work to make ends meet. Compounding that factor was the poor way the government tracks people with multiple jobs.

“Larry Katz and I now conclude that there was a modest rise in the share of the workforce in nontraditional jobs over the last decade—probably on the order of one to two percentage points, instead of the five percentage point rise we originally reported,” Kreuger told the Journal.