The gig economy—the history and the essentials

The gig economy raises a number of interesting questions about the future direction of employment law. Advocates argue that the gig economy offers boundless innovation and empowers both workers and entrepreneurs, while critics suggest that it disenfranchises the workforce and undermines workers’ rights.

The article below originally appeared on Lexis®PSL and is the first chapter in our free Guide to the gig economy.

Denise Cheng, affiliate of Massachusetts Institute of Technology and former innovation fellow with the San Francisco mayor’s office, suggests that historical precedents and future trends both point towards a world of opportunity that will nevertheless require careful management.

The term gig economy is becoming increasingly common, but what does it describe?

The gig economy is a popular label to capture the idea of short-term and unpredictable work arrangements. It’s part of a spectrum of terms that describes peer-to-peer marketplaces that enable people to monetise their skills and assets.

Despite its common usage, the gig economy is an ambiguous and perhaps non-ideal choice to describe recent economic shifts because musicians, freelancers, and other creative professionals have long described their work in the same terms. The gig economy is laced with assumptions about worker welfare, but the term ‘gig’ is technically neutral. This casual usage obscures the nuance and gravity of the issues at hand. It is misleading and takes focus away from the real problem—precarity.

What are the origins of the gig economy?

It really depends on how far back you want to go—we could trace the gig economy back to domestic workers in aristocratic homes. As cities developed and populations moved, so did employment patterns. Since the workplace was often in the domicile, governments refused to intervene. Because these workforces were predominantly female, exploitation was largely invisible. The distinctions in employment norms between public and domestic realms—who holds authority, where, and why—offer early examples of some debates currently being revisited in discussion of the gig economy.

We could also say that the gig economy has its roots in piece work. As new machines came online during the industrial era, managers scrambled for new ways to measure efficacy. This was especially evident in the garment trades, where workers were paid a fixed rate for every piece of clothing they produced. Workers were at a disadvantage d