What is a Gig Economy?
For generations parents told their children, “go to school, get good grades, get hired at a good company and then you’ll be comfortable for the rest of your life”. It was known as the W2 economy. You’d work for an employer and receive a paycheck every week. Sure there was a segment of the population that wasn’t part of the W2 economy, but for most, it was their path to financial security. In general terms, it provided health insurance, retirement options, and an entire tax code designed to make it easier for employees to pay taxes.
For those that did not receive a W2, they were classified as an independent contractor receiving a 1099 tax form at the end of the year. Examples of these 1099 workers included electricians working out of their vans, therapists in private practices, freelance writers, or musicians preforming gigs at their local music venues.
There has been a growing trend for startup companies to hire workers as independent contractors rather than full or part-time W2 employees. While W2 employee growth has been relatively stagnant, the number of gig workers has increase by about 33% last year. For some this is a liberation! For others, its just a way to make ends-meat.
This featured guide focuses on gig workers. The ones with one or even three side hustles. I am one of you any my goal is to mend the financial security gap between the W2 economy and the gig economy.