The Federal Reserve and the “gig” economy

The “gig” economy: all the sorts of work arrangements where you’re not a permanent employee and can’t expect that work one day implies that you’ll have work the next day—freelancing, contracting, temp work, casual labor, and most recently, software-mediated contract work like Uber driver.

These sorts of work have been growing as a fraction of all work. In fact, according to the Bureau of Labor Statistics, in the last ten years contingent workers have gone from being 10% of the workforce to being 16%. In fact,

all of the net growth in aggregate employment in the decade leading up to 2015 can be accounted for by contingent work arrangements, which means there has been no net employment growth in traditional work arrangements.

Source: FRB: Brainard, The “Gig” Economy: Implications of the Growth of Contingent Work

This matters to everyone with an interest in the U.S. economy, but it matters particularly to the Federal Reserve, which is charged by Congress to:

promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.

Source: The Federal Reserve’s Dual Mandate

So this raises the question: Does strong growth in the number of freelancers, on-call temps, and Uber drivers mean that we’re getting closer to maximum employment? Or, that we’re getting further away?