As with the rest of the nation, accurately estimating the size of the gig economy in Idaho remains a challenge. While measures such as part-time employment and self-employment show unimpressive growth trends, other indicators like the growth of staffing agencies and nonemployer establishments tell a different and perhaps more believable story – the gig economy in Idaho is alive and growing.
What is a gig?
The word “gig” spontaneously invokes images of bar bands, freelance writers, Uber drivers and TaskRabbit workers. A common thread with these workers is that work is on-demand and oftentimes uncertain. The formal definition of a gig, according to the Bureau of Labor Statistics, is “a single project or task for which a worker is hired, often through a digital marketplace, to work on demand.”
Not only can gigs vary in frequency, duration and skill level, the gig worker can have many faces as well. One gig worker could be self-employed with one or multiple gigs forming the bulk of his/her income; another could be a part-time worker using gigs to supplement traditional employment. These variances are part of the difficulties faced in estimating the size of the gig economy and workforce.
Proxy datasets used to represent the gig economy capitalize on some of the typical elements of gig work namely that gig workers are often part-time, contingent workers and are self-employed. These datasets are imperfect indicators that offer only a glimpse of this gig economy. The following are some of these indicators.
Gig economy measured in terms of part-time employment: 26 percent of 16-64 year old workers and trending down.
Part-time workers in this chart refer to those who usually work between one and 34 hours per week and represent a sizeable share of the working class. Idaho consistently has a greater share of part-time workers when compared with national estimates, according to estimates from the U.S. Census Bureau’s American Community Survey. In 2016, about 26 percent of workers in Idaho between the ages 16-64 years were engaged in some type of part-time work. Nationally, the part-time work share was 23 percent. Part-time employment saw a dramatic rise during the 2007-2009 recession years. Since then, the number of part-time workers have held steady, and the share of part-time employment has been in decline both nationally and statewide.
The U.S. Bureau of Labor Statistics Current Population Survey estimates for a larger age cohort – 16 years and older – show slightly different numbers but very similar trends: nationally, part-time employment share has declined since 2010 and full-time employment has been on the rise. Other national statistics that typically would be associated with gig work – the number and share of multiple jobholders – have shown very little change over the past decade.
Gig economy measured in terms of self-employment: 8-12 percent of total employment and holding steady.
The share of workers classified as self-employed is relatively small. More than 87 percent of workers in Idaho are traditional payroll employees, the rest are self-employed and unpaid family members. Unpaid family members constitute only about a tenth of a percent and are not included in this analysis.
Self-employed workers, particularly independent contractors, are a critical component of the gig workforce. The “unincorporated self-employed” workers are sometimes measured as a proxy for independent contractors and distinct from the small businesses owners categorized as “incorporated self-employed.”
As shown in the table below, the share of Idaho independent contractors in 2016 was approximately 8 percent, higher than the estimated 6 percent for the United States as a whole. The share of small business owners in the state and nationwide was about 4 percent.
The employment share of self-employed workers – whether incorporated or unincorporated – has declined since 2006 and shown little change in the past five years. American Community Survey estimates shows that the share of Idaho households with self-employment income has hovered around 14 percent since 2011, significantly below the pre-recession estimate of 17 percent in 2006.
While declining share of self-employed workers does not fit with the narrative of a rising gig workforce, shifts in the industry composition of these workers show trends more aligned with the gig economy. Over the past decades, the independent contractors share has shifted from construction and natural resources industries to professional and other services, including real estate and rental services, which has risen three percentage points between 2010 and 2016.
Gig economy measured in terms of nonemployer establishments: 18 percent of total employment and trending upwards.
Nonemployer statistics data created by the Census Bureau offer another possible look at what’s been happening in the gig economy. Nonemployer is a subset of the self-employed and many gig workers fit the Census definition of a nonemployer: a self-employed individual operating a very small, often unincorporated, business with no paid employees. In contrast, an employer establishment refers to a business or branch of a multi-unit business that employs at least one person aside from the owner(s). Nonemployer establishments constitute 73 percent of all businesses in Idaho and approximately 18 percent of total paid employment.
In both Idaho and the United States as a whole, the growth in nonemployer establishments has dramatically outpaced the growth in employer establishments. As shown in Figure 4, the number of nonemployer establishments increased by 15 percent in Idaho between 2005 and 2015, while employer establishments increased by just 3 percent over the same timeframe. The growth rate gap between employer and nonemployer establishments widened considerably during the Great Recession of 2007-2009, which slowed the growth of employer establishments. There were still fewer Idaho employer establishments in 2015 than there were in 2007. By contrast, nonemployer gigs were less impacted by the recession. There were 7 percent more Idaho nonemployer establishments in 2015 than there were in 2007.
Similar to the independent contractors, natural resources and construction represented a declining share of the nonemployer establishment jobs. The biggest winners over the past decade were professional services and other services. Figure 5 shows nonemployer establishment growth between 2005 and 2015 by industry sector. The professional services sector gained 3,400 nonemployer businesses during that time, the most of any sector. The “other services” sector had the second highest job growth with 3,100 new businesses. Many of the occupations in this sector involve on-demand services, such as pet sitting and maintenance repair, making them well suited to gig employment.
The gig economy measured in terms of Employment Services workers– Size: 2 percent of total employment and trending upwards
Finally, one other possible way to track the gig economy is to look at changes in the employment services industry. This is because a bulk of employment in this industry group are in line with some of the characteristics of the gig workforce – employment is contingent and more project based.
According to the Quarterly Census of Employment and Wages, the number of staffing companies in Idaho have nearly doubled over the past decade, from 470 in 2016 to 820 in 2016. Figure 6 tracks the employment growth of staffing companies over the past 10 years. The trend shows fairly steady growth since the last recession, from an annual average employment of 11,700 in 2010 to 15,200 in 2016 – a 30 percent increase. The employment share of employment services in Idaho also increased, though moderately, from 1.9 percent in 2010 to 2.2 percent in 2016.
This measure, as is the case with the others mentioned, is not without its flaws. For one, the employer-employee structure of the staffing agency worker is different from what is typical of a gig structure. In addition, it is unclear if a rising gig economy would help or hurt the staffing/recruitment industry in the long run as technology is making it easier for gig workers to source jobs on their own.
What can we make of the data on elements of the gig economy in Idaho?
Given existing data, it is safe to conclude that the widely predicted dramatic shift from traditional employer-employee roles triggered by the gig economy have yet to be realized – not yet, at least, in the past decade. Full-time payroll still constitutes the bulk of employment in the state.
While all data seem to point out that these workers – whether part-time, self-employed or contingent – are a comparatively smaller share of employment compared to traditional full-time workers, the extent to which the economy is growing is showing mixed results. The different trends shown by indicators based on people as opposed to establishment-based indicators possibly highlight deficiencies in current data collection methodology. It is thus likely that the rapid growth of nonemployer establishments might be the most important key to understanding the rise of the gig economy.
Esther.Eke@labor.idaho.gov, regional economist
Idaho Department of Labor
(208) 236-6710 ext. 4331