As much as a third of Indiana’s workforce may be in the gig economy. That’s part of what’s driving a labor shortage.
The Bureau of Labor Statistics estimated in 2019 that 36-percent of workers nationwide are in the gig economy, from day laborers to Uber drivers to freelance writers. That would translate to one-point-one-million Hoosiers. Ball State economist Michael Hicks says the number might be as low as 750-thousand, but that’s still more than one in three workers. And he says the pandemic has sharply accelerated a trend toward remote work that was already in motion.
Hicks told a legislative hearing there are a lot of unknowns, like how many people have gig jobs as their main source of income and how many are doing it to supplement their main income. And he says measurements of the gig economy are indirect and imperfect, but one way to track it is the number of job postings offering remote work. Last month, seven-thousand of those ads were closed. If that means they’ve been filled, Hicks says that’s two-thirds of Indiana’s job growth for the month. “There’s your labor shortage,” Hicks says.
Hicks says restaurants in particular have struggled to fill jobs, and suggests the pandemic is squeezing the labor force in the same way it’s squeezing business. He says a Harvard tracker of credit-card purchases indicates restaurant business had dropped by 60-percent last March even before the start of a six-week lockdown. Just as many customers were reluctant to venture out during a pandemic, he says, many potential workers are grabbing remote-work opportunities rather than take jobs in businesses with high personal contact.
While unemployment rates have rebounded from last year’s pandemic lows, Hicks says changes in the nature of work and where people do their jobs are ripple effects likely to reverberate for years. He says the size of the disruption as a share of the labor market is bigger than the impact of the Great Depression, from the stock market crash in 1929 to its lowest ebb four years later.