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01 Oct 2015
53 million Americans, or 34% of the workforce, have become 1099 workers. The category covers the entire spectrum of freelancing, from independent contractors, to temps, and so on to occasional moonlighters. The quantity of 1099 contractors is anticipated growing by over 4% a year through 2020 to a number exceeding 66 million people. The trend is driven with a mix of new technology and age-old incentives. Freelancers are less costly for businesses who reduce payroll costs and benefit outlays, while staff are granted greater flexibility. A Roosevelt Institute/Kauffmann Foundation joint report argues that, by 2040, america economy will likely be "scarcely recognisable".interim

�The gig economy now makes up about another in the American workforce.

�By 2020 66m Americans are anticipated to get freelance or 1099 workers.

Does everyone need the gig?

Is 1099 the real code for age?

Energy, Financial Services, Government, Healthcare/Pharma/Biotech, Industrials/Manufacturing, Innovation & New Ventures, Media & Entertainment, Nonprofit, Equity finance, Real Estate, Retail & Consumer, Technology & Telecoms, Investment capital

The attractions to be a 1099 are by no means universal,
due to not enough job security and employment rights. 53% of men and women freelance by choice, 47% from economic necessity. Although contractors revel in the freedom and control freelancing provides, other people are increasingly keen to win employee status. Specifically in blue-collar segments a tiny, but growing amount of Uber drivers and other 1099s employed by Postmates, Lyft and Washio are fighting lawsuits being classified as employees and not contractors. Home cleaning start-up, Homejoy, closed partly because of the load of these lawsuits. The rise in the �gig economy� presents governments with serious problems. While entitlement systems are made round the conception of your fixed job, revenues from payroll taxes will fall sharply.

Current legislation not made for today�s economy

Many analysts feel that an urgent change in legislation is necessary together with the introduction of the intermediate classification between �worker� and contractor�. Germany's "dependent contractor" status provides a model which combines protection with flexibility. Simon Rothman, an investor in delivery service platform Sprig, argues for your adoption of which a single. Noting that 38% of on-demand staff are shown interest in multiple companies, he would like to see personalized healthcare travel together with the employee. In accordance with tech evangelist Tim O'Reilly, however, legal changes figure to little more than a sop. Reilly points out that companies who will be nervous of legal actionare already switching workers from 1099 to W2 tax codes and therefore are capping employees' hours in order that they become part-time and never receive benefits. "We've basically gutted wages for professional, and we're wondering what's happening", he states.

What the brains think�

In June, a McKinsey Global Institute Report suggested that online talent platforms - including homes like Monster.com, to digital marketplaces like TaskRabbit and talent management agencies for example PayScale and ReviewSnap - could boost global GDP by 2% or $2.7 trillion by 2025. Platforms may have the positive impact of increasing employment by 72 million full-time equivalents. The authors argue that an excellent transition for the �gig economy� requires not just new labor market regulations, and also affordable broadband access for many and clearer rules within the thorny regions of data ownership and privacy.   mba


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