COVID’s Economic Shift Part I: The Place of Black Communities in Gig Economies
Apr 22, 2022 11:00AM ● By Nana Ama Addo and Umme Orthy
( Image by Kindel Media via Pexels )
“If you do not change, you can become extinct!” - Spencer Johnson, Who Moved my Cheese
COVID’s Economic Shift and the Place of Black Communities in Gig Economies is a 3-part series that explores the future of the US labor force in light of the changing needs of people, technology and pandemic-related shifts, and gig-work. In part 1 of the series, we explore changes brought by the ‘great resignation’, and utilize qualitative and quantitative research to determine the impact of the ‘gig’ economy during the COVID-19 pandemic.
58% of individuals, or 80 million people, work from home, according to one report. Furthermore, around 67% of higher-income employees work from home. Just 56% of middle-income employees and 53% of lower-income employees can work remotely. Remote employees' productivity has increased by 62%. In a 2021 Pew Research Center survey, researchers discovered that Hispanic, Black, and Asian communities were more likely to be doing gig work than White communities. 30% of Hispanic communities, 20% of Black communities, 19% of Asian communities, and 12% of White communities reported doing gig work.
The Great Resignation
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The Great Resignation, or the Great Reshuffle, is an ongoing and global evolution in the labor market that began gaining notice in May 2021, characterized by masses of workers leaving their jobs. In February 2022, 4 million Americans left their jobs for others with better benefits. A study by MIT reported that non-economic factors that attributed to workers joining the Great Resignation include job insecurity, toxicity in the workplace, regular burnout, and not feeling valued.
While the economic impacts of the COVID-19 pandemic are not to be underestimated, socio-economic changes are also gaining traction, with workers leading workforce innovation and pressuring organizations to evolve their relationships with workers. According to one research, remote employees are 60% less connected to their peers. Other changing circumstances, including increased flexibility through remote working and rising costs, are inspiring people in the labor force to discover additional opportunities to fit changing economic realities and pertinent social and familial needs.
Black entrepreneurs are developing their business ideas into lucrative operations, with businesses like Black and Mobile filling pertinent needs. In 2020, the Kauffman Foundation reported that the creation of Black businesses skyrocketed higher than it had in the last 25 years. The culmination of layoffs, people quitting their jobs, and other circumstances are birthing more creative, resourceful, and potentially even more prosperous Black individuals.
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Gig Work During the Pandemic
( Image by Rodnae Productions via Pexels )
In 2020, Forbes reported that gig work comprised 35% of the US economy. Gig work, which is defined by Pew Research Center as contract-based, short-term, and non-traditional work, is commonly utilized through third-party platforms like Uber, Airbnb, DoorDash, and more. This economy, also known as the ‘share economy’, has risen in lieu of COVID-related layoffs and an increasing economic need. We surveyed 56 workers to gauge their relationship with the workforce and the gig economy during COVID-19.
Remote Working, and a Rise in Demand for Door-to-Door Services
( Image by Rodnae Productions via Pexels )During the pandemic, there have been layoffs, people leaving their jobs, and a higher demand for door-to-door services and companies like Hello Fresh, Amazon, and Black and Mobile which deliver groceries and commodities to people’s doorsteps. In 2022, Rensselaer Polytechnic Institute reported that the number of people ordering grocery deliveries increased over 113% during the pandemic.
Survey respondents describe the jobs they were doing before the pandemic and the companies they are currently working for. These surveys indicate an increase in gig-working jobs, including DoorDash, Uber Eats, Postmates, and GrubHub.
In our survey, of the 72.7% of people that said they were involved in gig work, 57.4% said they were not doing gig work before the pandemic. This indicates the rise in gig work in door-to-door services is rising to meet the increasing demand.
Common Gig Work Sectors
Technology has created lucrative digital environments for gig economies, where third-party platforms can create systems to employ contract-based workers and solve community needs. Black and Mobile, a third-party delivery service platform that connects restaurants with consumers, has radically transformed Black ownership in the third-party platform sector of the gig economy and simultaneously created opportunities for themselves and others.
Mastercard reports that globally, the gig industry accounted for $204B in sales and business transactions in 2018. Mastercard divides the gig economy into 5 sectors: Asset-Sharing Services (i.e. Airbnb), Transportation-Based Services (i.e. Uber, DoorDash), Professional Services (i.e. Fiverr, Upwork) and Handmade Goods, and Household & Miscellaneous Services (i.e. Etsy). Transportation-based gig work, including door-to-door services, made up 58% of the global gig industry revenue in 2018.
( Image by Jackson David via Pexels )A 2021 Pew Research Center study reported that 68% of US surveyors utilize gig-work as their side job, with 35% reporting the side jobs as important and 23% reporting it as necessary for their well-being. The minimum wage for Pennsylvania, for example, which has been stagnant for 15 years, is $7.25, or $15,080 annually.
Work systems are changing, with the standard earn-by-hour system being adapted into earn-by-output systems through remote working, organizations responding to the needs of workers, and gig-work being supplemented to fill economic gaps that reverberate from wage-expense disparities. The nature of flexibility included in gig work may also enable gig workers to adequately manage home affairs related to the pandemic, including caring for sick family members and loved ones, and assisting children with remote learning.
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Stay tuned for our next article, where we discuss the impact of gig-work on work/life balance, and its potential for economic stability and mobility.
Works Cited
https://www.bloomberg.com/news/articles/2021-05-10/quit-your-job-how-to-resign-after-covid-pandemic
https://www.pewresearch.org/internet/2021/12/08/the-state-of-gig-work-in-2021/
https://incafrica.com/article/jessica-stillman-great-resignation-mit-revelio-research
https://newsroom.mastercard.com/wp-content/uploads/2019/05/Gig-Economy-White-Paper-May-2019.pdf
https://stacker.com/stories/13518/comparing-minimum-wage-cost-living-every-state
https://www.govdocs.com/pennsylvania-15-minimum-wage-push-renewed/
https://www.weforum.org/agenda/2021/05/what-gig-economy-workers/
https://www.kauffman.org/currents/the-doors-will-not-be-closed-on-black-entrepreneurs/
https://news.uga.edu/selig-multicultural-economy-report-2021/
Nana Ama Addo is a writer, multimedia strategist, film director, and storytelling artist. She graduated with a BA in Africana Studies from the College of Wooster, and has studied at the University of Ghana and Kwame Nkrumah University of Science and Technology. Nana Ama tells stories of entrepreneurship and Ghana repatriation at her brand, Asiedua’s Imprint ( www.asieduasimprint.com ).
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