The current job market is quite strong and more jobs are available but not enough workers to fill them. Amid the strong job market, the US Bureau of Labor reported that the current unemployment rate is slightly higher than the pre-pandemic rate. Despite this, many people have opted to enter the gig economy since it offers a lot of opportunities for them. With the current federal minimum wage standing at $7.25 per hour, many people are weighing the different gig economy pros and cons to help them decide if they plan to become gig workers.
The gig economy provides autonomy and flexibility and allows its advocates to carve their own paths to success. Gig workers or independent contractors have the freedom to accept projects that fit their schedules and allow them to balance work with their personal lives. Despite these benefits, it’s important to consider the drawbacks of independent contracting. Gig workers need to provide their own equipment, take care of their own benefits, and deal with instability in their income stream.
This article will explore the different gig economy pros and cons of harnessing its potential as a main source of income for anyone interested in becoming an independent contractor. After all, everything has its positive aspects and drawbacks. Hopefully, this helps you decide how to move forward in your career!
1. Con: Buying Your Own Equipment
One of the biggest drawbacks of working as a gig worker is that you should provide your own equipment. If you’re starting as a gig worker, you should invest in the necessary equipment to get the job done. The cost of buying your equipment will vary depending on the project you will handle. For instance, if you are into content creation or web development, a good computer or laptop will be a necessary investment. You should also subscribe to a fast internet connection and reliable cybersecurity protection.
On the other hand, if you plan to start a small construction business, you will need more than a computer and internet connection. You should invest in construction tools and equipment, such as compactors, backhoes, and drills. You should also buy durable rigging equipment to ensure safety at the project site. The capital outlay for the construction equipment is higher, especially if you plan to buy more heavy equipment for the business. So, if you plan to work in the gig economy, it’s essential to consider the investments you need to make as one of the most important gig economy pros and cons.
2. Pro: Diverse Opportunities
The gig economy offers numerous opportunities for anyone, despite the plethora of gig economy pros and cons. The diversity in the opportunities available to you depends on your talents and skills. You can take full advantage of these talents and skills to offer your services in the market.
For instance, organized individuals can offer their services as a wedding planner. They can help organize a wedding and take the load off the bride and groom. They can plan the entourage and wedding reception. The bride and groom can simply provide an idea of what they want the wedding to be. If they want to have a relaxing wedding, the wedding planner can look for suitable country wedding venues.
On the other hand, if you are a tech whiz or a coder, you can help create apps or programs to help other people make their jobs easier. For instance, you can create an app to help small retailers keep up with their inventories. You can also use your coding skills to help them enhance their online presence to connect with more people in the market.
3. Con: Unstable Income
Flexibility and autonomy are among the main benefits of a gig economy. The ability to set your own schedule and have the chance to work on other projects makes it an appealing option for anyone. But, amid the numerous gig economy pros and cons, one notable drawback is the unstable income. You may earn more than working in the gig economy, but you have to deal with the income instability that comes with it.
For instance, if you offer concrete restoration services in the market, you should be aware that the projects are not regular. Your income depends on the number of projects you work on. If there are no projects, you will not earn anything. The absence of a regular paycheck makes it challenging to plan your financial future. Due to this, you should offer other services if your main source of income is unpredictable and sporadic.
4. Pro: Financial Independence
Financial independence is among the most significant benefits of a gig economy amid the considerable number of gig economy pros and cons. This independence is particularly evident in professions involving skilled technicians who can use their expertise to work on different projects and increase their income streams. More traditional jobs, on the other hand, tend to have more rigid pay expectations.
For instance, AC service technicians can work with multiple clients in one commercial building and earn more than working in a traditional job. They can focus on peak seasons or during high-demand periods when their services are most needed. They can negotiate for higher rates, which has a direct effect on their income. In this situation, gig workers can maximize their earnings while setting their own work schedules.
Additionally, the flexibility offered in the gig economy allows workers to look for other income opportunities. They can also enhance their skills by investing in professional development, which allows them to increase their rates and enhance their financial stability. Becoming a gig worker allows professionals to increase their potential for financial freedom and opens more opportunities for them in the future. They may even employ other professionals in the future and increase their income-generating capacity.
5. Con: Lack of Paid Leave
Even though gig workers have the flexibility to control their own schedules, there is an absence of paid leave for them. The lack of paid leave is among the many gig economy pros and cons that affect these workers. This can affect their health, especially in physically demanding sectors, such as a towing service.
The service also comes with potential hazards that can affect the safety of the gig worker. In a traditional job setting, workers enjoy paid leaves that allow them to get paid time off for sickness or emergencies. They can also use it to go on vacation to escape the stress of the job.
However, gig workers do not enjoy this benefit. If they take time off for any reason, they can sacrifice their potential income. So, instead of taking a leave, they continue to work even if they are sick. In this situation, gig workers can risk getting burnt out or getting into an accident due to their current health condition.
The absence of paid leave can also affect their overall financial situation, especially if they are still starting as gig workers. Despite the flexibility of their schedule, gig workers are still vulnerable to situations that may require them to take some time off from work.
6. Pro: Flexibility
Flexibility is one of the most significant benefits of working as a gig worker. It is particularly advantageous for people who have to balance work with personal life. This can make it stand out among the numerous gig economy pros and cons.
This benefit is also essential for professions that require accommodating creative processes among the workers. For instance, designers and artisans who work on custom rings need to let their creative juices flow to ensure they produce a high-quality product. A nine-to-five schedule may not be suitable for these types of gig workers, since they need to prepare themselves when creating a masterpiece. So, the flexibility offered by an independent contract gives them the freedom they need to accomplish this task. Flexibility also allows these gig workers to work with their clients and create the best design for the rings they produce. It also allows them to use innovative techniques that may not be possible in a traditional working environment.
7. Con: No Benefits
Traditional employees enjoy numerous benefits offered by their employer, including employee healthcare and paid leave. On the other hand, gig workers do not enjoy these benefits, which is a major disadvantage when working in a gig economy. This absence is just among the many gig economy pros and cons that gig workers have to deal with when working as independent contractors.
The lack of employer-provided health benefits makes it necessary for gig workers to look for alternatives to ensure they get the necessary coverage from other sources. They can look for a healthcare provider and find the best deal available for them. They can also customize the coverage to ensure they cover everything they need to have in healthcare insurance. Despite the flexibility and autonomy offered by a gig economy, independent contractors still need to find ways to cover the lack of benefits they normally get from a traditional employer.
8. Pro: Multiple Income Streams
Many gig workers enjoy multiple income sources due to the flexibility the gig economy gives them. The situation allows them to diversify their income, which is among the many gig economy pros and cons. The expertise and skills of these gig workers allow them to rely on more than one source of income.
For instance, gig workers offering brush clearing services can complement their income by offering landscaping or equipment rental services. Increasing their income sources allows gig workers to enhance their finances and ensure stability despite the uncertainty when it comes to getting projects, especially among workers who have just started. So, if you plan to enter the gig economy, you should leverage your expertise and skills to offer more services in the market. In this situation, you will have more than one source of income and ensure financial stability in the future.
9. Con: Legal Liabilities
One significant disadvantage of working in a gig economy is the lack of support when it comes to legal liabilities. Unlike their traditional counterparts, gig workers do not have the same protection from legal issues that is typically offered by employers. For instance, the lawyers of a company can provide legal help for employees involved in accidents while at work.
On the other hand, delivery or ride-hailing services do not normally provide legal assistance to gig workers involved in accidents. In these cases, the gig worker should find a reliable injury attorney to help them with their cases. The legal professional can advise them on what they should do in case of these situations. If they sustained injuries while working, the lawyer can also help them file legal claims or damages due to the accident. But gig workers should also understand that they need to handle the financial burden of hiring these legal professionals. So, they should set aside part of their income for these situations in case it happens in the future.
10. Pro: Work Satisfaction
One benefit of working in a gig economy is the satisfaction that gig workers get. This advantage is notable among all the different gig economy pros and cons since it allows workers to earn money from their passions and on their own terms. For instance, craftspeople and artisans who want to pursue their passions can offer their services in the market. They can provide metal laser engraving services, which is expected to grow in the coming years. Offering services related to their passions and creativity increases their work satisfaction, which fosters a sense of fulfillment among these workers.
Navigating the gig economy provides many opportunities and challenges. Even though working as a gig worker is an appealing option, you should consider the different gig economy pros and cons before throwing your hat into the ring. Carefully considering these pros and cons will allow you to make an informed decision when choosing the right career while mitigating the risks involved when entering the gig economy. It also allows you to maximize your earnings while leveraging your opportunity for personal and professional growth.