How is gig economy employment measured?

The gig economy, encompassing app-based work (Uber, DoorDash, Instacart), freelancing, contract work, and other non-traditional employment arrangements, presents significant measurement challenges for official labor statistics. The BLS household survey classifies workers based on their primary job: someone who drives for a rideshare company as their main gig is counted as self-employed, while someone who does it on the side alongside a W-2 job is counted by their primary employment.

The BLS attempted to quantify non-standard work through its Contingent Worker Supplement, last conducted in 2017. That survey found that contingent and alternative work arrangements had not grown as a share of total employment despite the proliferation of app-based platforms. However, many economists questioned whether the survey design captured the reality of modern gig work, particularly the growing number of workers who cobble together income from multiple platforms and short-term engagements.

IRS data offers a different perspective. The number of taxpayers filing 1099-MISC and 1099-K forms has grown substantially, suggesting that non-employee income has expanded even if traditional surveys miss it. The gap between establishment survey employment (which counts only payroll jobs) and household survey employment (which captures self-employment) may partly reflect the growth of gig work.

The measurement problem has real policy consequences. If millions of workers are engaged in gig work that traditional surveys undercount, the actual level of employment may be higher than official statistics indicate, meaning the labor market may be tighter than the unemployment rate suggests. This could explain why wage pressures emerged earlier than models predicted based on the official unemployment rate. For the Fed, understanding the true level of labor utilization requires looking beyond headline numbers to alternative data sources like tax records, app usage data, and private-sector employment platforms.