The Gig Economy & its Impact on Millennials, Gen Zs & Other Generations

The gig economy refers to a labor market characterized by short-term, independent contracts or freelance work, as opposed to permanent jobs. It encompasses a wide range of activities, from driving for ride-sharing services to freelance writing and web development. It is often facilitated by online platforms and mobile apps that connect workers with clients or customers. The gig economy has transformed the traditional employment landscape, offering flexible work arrangements and opportunities for individuals to leverage their skills and pursue their passions.

This report examines the participation of Millennials, Gen Z, and other generations in this evolving work model, exploring their motivations, challenges, and its impact on their views of work and career.

Gig Economy Size

The gig economy has experienced remarkable growth, with its global market size estimated at $556.7 billion in 2024 ¹. Projections indicate that this figure could surpass $1.8 trillion by 2032 ¹. In the United States alone, over 57 million people, representing more than one-third of the workforce, are involved in this work model, either as their primary or secondary source of income ². This includes a quarter of all full-time workers and half of all part-time workers ².

Its impact extends beyond US borders where 12% of the global labor force is involved in it.

The gig economy is attracting a diverse range of participants. In the US, freelancers now charge an average hourly rate of $21, up from $19 two years ago ³. This increase in earning potential, coupled with the desire for greater work-life balance, has led to a growing interest in gig work, with 1 in 6 traditional workers expressing a desire to become primary independent earners ⁵. In 2018, gig workers contributed over $1.4 trillion to the total US income, highlighting the significant economic contribution of this evolving work model ⁵.

Demographic trends also reveal interesting patterns in this work model. Americans with lower incomes are more likely to have earned money through online gig platforms ⁶. Additionally, 9% of U.S. adults are current or recent gig workers, having earned money through an online gig platform in the past 12 months ⁶. These figures underscore the growing prevalence and accessibility of gig work across different income levels and demographics.

Generational Participation

While the gig economy encompasses workers of all ages, there are notable generational differences in participation rates and motivations.

Generation	Freelance Participation (US, 2023)
Gen Z	15%
Millennials	45%
Gen X	27%
Baby Boomers	9%
Silent Generation	4%

⁷

Millennials currently have the highest participation rate in the gig economy, with 78% earning income from one or more gig platforms ⁸. Gen Z and Gen X follow closely behind, at 67% and 65%, respectively ⁸. Baby Boomers have the lowest participation rate at 36%. Several factors contribute to these generational differences. The rise of influencer culture and online content creation is attracting younger people, particularly Gen Z, to freelance in higher numbers ⁷. Data also suggests a correlation between age and freelancing, with younger generations showing a higher propensity for independent work ⁹. In 2020, half of all US Gen-Zers participated in freelance work, and this figure steadily decreased with each older generation ⁹.

Motivations for Participating

Flexibility emerges as a primary motivator for all generations participating in the gig work-model ¹⁰. This desire for greater control over work schedules and the ability to balance work with personal life transcends generational boundaries.

Supplementing income is another common motivator across generations ⁸. Whether it’s to address financial challenges, save for retirement, or simply increase earning potential, this work model provides a valuable avenue for supplementing income from traditional employment or other sources.

However, each generation also has unique motivations for engaging in this type of work.

Millennials

Career Exploration: Millennials, who are still early in their careers, often view this work model as an opportunity to explore different career paths and develop new skills ¹⁴.
Side Hustles: A significant number of Millennials are embracing the “side hustle” culture, taking on freelance work in addition to their primary jobs to increase their income and pursue their passions ¹⁵. In fact, there has been a 60% growth in the number of Americans taking on freelance side jobs since 2019, with Millennials representing 58.7% of all side hustlers ¹⁵.
Work-Life Balance: Millennials highly value work-life balance and appreciate the flexibility that gig work offers in managing their personal and professional commitments ¹⁰. They are more likely to be stay-at-home parents or students, and they often view this work model as a way to achieve their long-term aspirations while maintaining flexibility ¹⁶. In 2015, 24% of Millennials worked as independent contractors or freelancers, compared to 15% of Gen-Xers and 9% of Baby Boomers ¹⁶.

Gen Z

Entrepreneurial Opportunities: Gen Z, known for its entrepreneurial spirit, sees the gig economy as a platform to launch their own ventures and pursue diverse career paths ¹¹.
Early Adoption: Gen Z is readily embracing freelance work, with 52% of Gen Z professionals freelancing in 2023, compared to 44% of Millennials, 30% of Gen X, and 26% of Baby Boomers ¹⁷.
Multiple Income Streams: Gen Z workers often engage in multiple gigs simultaneously to maximize their income and reduce their dependence on a single source of income ¹⁸. This reflects their desire for financial independence and their comfort with juggling multiple responsibilities.
Flexibility and Independence: Gen Z highly values flexibility and the autonomy to work on their own terms ¹¹. They are drawn to the ability to accommodate their lifestyle preferences and provide greater control over their work schedules.
Digital Natives: As digital natives, Gen Z is comfortable navigating online platforms and leveraging technology to find and manage independent projects¹⁹. They are also more likely to be involved in online projects, such as social media influencing and online content creation.
Seeking Purpose: Gen Z seeks work that aligns with their values and provides a sense of purpose ¹⁹. They are more likely to prioritize meaningful work over traditional career paths.

Baby Boomers

Supplementing Retirement Income: Many Baby Boomers use independent contracting to supplement their retirement income or to make ends meet ⁸. This is particularly important for those who may not have adequate retirement savings or who face unexpected financial challenges.
Challenges in Traditional Employment: Baby Boomers may face difficulties in securing traditional full-time employment due to ageism or other factors ¹². The gig economy provides an alternative avenue for them to continue working and earning income.
Purpose and Engagement: This work model provides a sense of purpose and engagement for those who are not ready to fully retire ⁸. It allows them to stay active, contribute their skills, and maintain social connections.

Gen X

Financial Stability: Gen-Xers often use side jobs to supplement their income from other full-time or part-time jobs ¹³. This reflects their desire for greater financial stability and their willingness to diversify their income streams.
Financial Challenges: Some Gen-Xers turn to gig work due to financial struggles or job loss ¹². They may face challenges in securing traditional employment or may be seeking alternative ways to make ends meet. In fact, 63% of Gen X gig workers report struggling financially, compared to 49% of Millennials and 32% of Baby Boomers ²⁰. Inconsistent cash flows from gig work can make it difficult for them to stick to a budget or make ends meet ²⁰.
Flexibility: They also value the flexibility that this work model offers, allowing them to balance work with other commitments ¹². This is particularly important for those who may have caregiving responsibilities or other personal obligations.
Earning Potential: Gen X is currently earning the most from gig work, with an average monthly income of $352 ¹³. This highlights the potential for Gen-Xers to leverage their skills and experience in the gig economy.

Popular Types of Gig Work

The types of gig work that are popular with each generation vary based on their skills, interests, and needs.

Online Content Creation and Digital Marketing

Gen Zis heavily involved in online content creation, including social media influencing, blogging, and vlogging ²¹. They are also leveraging platforms like TikTok to build their personal brands and monetize their online presence ²².Millennials are also active in online content creation and digital marketing, with many engaging in freelance writing, blogging, and social media management ²³.

Professional Services

Millennials often engage in freelance work that utilizes their professional skills, such as software development, web design, marketing, and consulting ²⁵. Baby Boomers with professional experience are often involved in consulting, teaching, and other fields that utilize their expertise ²⁷.

Skilled Trades

Gen-Xers often find work in skilled trades, such as construction, renovation, and fulfillment ²⁸. This reflects their experience and skills in these areas.

Delivery and Transportation Services

Delivery driving platforms like DoorDash and Instacart are popular among Gen Z and Millennials³⁰.

Online Platforms and Marketplaces

Millennials are dominant in online platforms such as Etsy for selling handmade items ²³, while Gen-Xers utilize online platforms for online trading, teaching, web development and more ²⁹.

Challenges and Benefits

The gig economy presents both challenges and benefits for workers across generations.

Challenges

Income Instability: Gig work often involves fluctuating income levels, making it challenging to budget and plan finances ¹⁰. This can be particularly challenging for those who rely on it as their primary source of income.
Lack of Benefits: Gig workers typically lack traditional employee benefits such as health insurance and retirement plans ¹. This can create financial insecurity and make it difficult to access essential services.
Job Security: Gig work often involves short-term contracts or projects, leading to job insecurity ¹⁸. This can make it challenging to plan for the future and build a stable career path.
Tax Obligations: Gig workers are responsible for managing their own taxes, including self-employment tax, which can be complex and burdensome ¹.

Benefits

Flexibility: The ability to choose when, where, and how much to work is a significant benefit for all generations ¹⁰. This allows individuals to balance work with personal commitments, pursue their passions, and achieve greater work-life balance.
Skill Development: The opportunity to develop new skills and gain experience in different industries ¹⁴ is another great benefit. This can enhance career prospects and make individuals more adaptable in a changing job market.
Autonomy and Independence: Gig workers enjoy greater autonomy and control over their work compared to traditional employees ¹⁸. This can be empowering and contribute to greater job satisfaction.

Here are is a breakdown of the Main Reasons for Worker Satisfaction with Gig Platforms

Future of the Gig Economy

The gig economy is poised for continued growth and evolution. Several factors will shape its future:

Technological Advancements: Technology will continue to play a crucial role, with platforms and tools becoming more sophisticated and accessible ³⁹. This will further facilitate the connection between workers and clients and create new opportunities.
Work Flexibility: The increasing preference for work flexibility, particularly among Gen Z and Millennials, will continue to drive the growth of the gig economy ³⁹. This reflects a shift in values and priorities, with individuals seeking greater control over their work schedules and lifestyles.
Multiple Gigs and Diversification: The trend of people engaging in multiple gigs alongside full-time jobs is likely to continue ³⁹. This reflects the diversification of income streams and the desire for greater financial security.
Challenges and Disruptions: The gig economy also faces challenges, such as the potential replacement of human work by AI and the need to address worker exploitation and tax revenue considerations ³⁹.
Policy and Regulation: The rise of this work model necessitates updated policies and regulations to ensure fair labor practices, protect workers’ rights, and address its unique challenges ³⁹.
Digitalization and Skills: The rapid digitalization of operational processes by employers will increase the demand for new skills ³³. This highlights the importance of continuous learning and upskilling for workers in this world to remain competitive.
Impact of the COVID-19 Pandemic: The COVID-19 pandemic has accelerated the adoption of remote work and gig platforms, further contributing to the growth and evolution of the gig economy ¹⁰.

The gig economy is a dynamic and transformative force in the world of work. Millennials, Gen Z, and other generations are actively participating in this new work model, each with their own motivations and challenges.