One in five shifted to gig work
- Goldman Sachs said U.S. workers are increasingly using gig jobs as a layoff buffer, with Federal Reserve survey data showing 20% did so. - The tradeoff is brutal — Goldman estimates gig workers earn just 50% to 65% of their old hourly pay in traditional jobs. - That matters because most 1099 gig workers still sit outside normal unemployment insurance, making labor-market pain look smaller than it feels.
Gig work is turning into a shock absorber for layoffs. That sounds helpful at first — lose a salaried job, open an app, keep some money coming in. But the new research making the rounds shows the catch pretty clearly: a lot of displaced workers are landing in lower-paid, thinner-protection work, and the usual labor data does not fully show the damage. Goldman Sachs pulled together Federal Reserve survey data, app-level earnings data, and labor-market research to make the point. (marcus.com) ### What actually changed? The immediate news is not a new law or a company announcement. It is a fresh Goldman Sachs analysis from late 2025 that reframed gig work as a labor-market fallback, not just a side hustle. The headline number came from Federal Reserve survey data: 20% of people who said they had lost a job, taken a pay cut, or had hours reduced in the prior two years turned to gig work as a result. (marcus.com) ### Why is that number a big deal? Because it says gig work is no longer just extra income around the edges. It is acting like an informal unemployment system. When hiring cools, people do not always show up as fully jobless and waiting. Some start driving, delivering, freelancing, or piecing together contract work fast enough that th(marcus.com)g participation somewhere around 5% to 15% of the U.S. population, depending on definition. (gspublishing.com) ### How much money are workers giving up? A lot. Goldman estimated gig workers earn only 50% to 65% as much per hour as they did in their previous traditional jobs. Its cited Gridwise data showed platform gig workers averaging about 14 hours a week and roughly $18 an hour. That is useful as a bridge income, basically, but it is not a clean replacement for a lost full-time paycheck with benefits. (gspublishing.com) ### Why doesn’t unemployment insurance fill the gap? Because the system was built around W-2 employment. Traditional unemployment insurance generally excludes independent contractors and most self-employed workers in normal times. That is why the pandemic-era expansion mattered so much — it temp(gspublishing.com)weakly covered or not covered at all. (theworkerslab.com) ### So do jobless claims miss some of this pain? Yes — at least in part. If someone loses a standard job and quickly starts earning something through apps or freelance contracts, that person may not appear in the clean, old-fashioned box people imagine when they hear “unemployed.” Boston Fed research argues (theworkerslab.com)have very weak attachment and unstable income, while some activity slips through standard measurement. (bostonfed.org) ### Is this just Uber and DoorDash? No. Platform work is the visible slice, but the broader gig economy includes offline contract jobs, short-term freelance work, and other informal paid tasks. That matters because the platform story is easier to count than the (bostonfed.org)use of reporting gaps. (nber.org) ### Why should anyone outside gig work care? Because this changes how a cooling labor market feels. A low unemployment rate can coexist with a growing group of workers who are technically earning something but doing much worse than before. The economy looks resilient on the surface. Underneath, more people may be absorbing layoffs privately — w(nber.org)agility. (gspublishing.com) ### Bottom line Gig work is increasingly functioning as the country’s unofficial layoff cushion. But it is a cushion with holes in it — lower wages, patchy protections, and a tendency to hide stress that used to show up more clearly in unemployment data. (gspublishing.com)
