The ongoing decline in the US labor market has led many workers to turn to gig platforms such as Uber and food delivery service DoorDash for temporary jobs. A recent analysis by Goldman Sachs indicates that as traditional employment opportunities slow down, more workers are turning to platforms like Uber, DoorDash, and Instacart for employment. Currently, these gig job opportunities remain stable.
Goldman Sachs’ latest analysis found that about 20% of workers facing income gaps due to pay cuts, unemployment, or reduced working hours are shifting towards gig platforms for work.
This Thursday (November 20th), the federal government is set to release the US non-farm payroll report for September, which was delayed due to government shutdown. It is expected that the report will reveal further contraction and weakness in the job market.
Goldman Sachs found that in cities where job growth is slowing down, gig workers are experiencing the biggest increase in working hours, indicating that workers are trying to make up for lost hours or income from traditional jobs by working overtime.
Currently, the pressure on the US labor market is mounting. A report released on November 6th by the US outplacement firm Challenger, Gray & Christmas revealed that over 153,000 job cuts were announced nationwide in October, marking the worst figure for the same period since 2003.
Data from payroll processing company ADP shows that in the four weeks leading up to October 25th, private enterprises have been laying off an average of 11,250 workers per week, further worsening from the beginning of the month. The initial report showed that 42,000 new job positions were added in private enterprises in October.
ADP mentioned that though the job growth is a positive sign, it has not been able to expand across all sectors. Growth has been led by education and healthcare, trade, transportation, and utilities. On the other hand, professional business services, information technology, and leisure and hospitality industries have seen continuous layoffs for the third consecutive month.
Despite the limited job growth in October, it is still positive news, which has brought relief to many economists and investors. Market observers generally expect that due to weakening labor demand and supply shortages, job growth will continue to remain sluggish in the near future.
So far this year, over 1.1 million job cuts have been announced by companies across the US, marking a 44% increase from the total layoffs in 2024. The tech industry and retail sector have been key contributors to the layoffs, with major companies like Amazon, Target, and UPS significantly reducing their workforce.
Under the pressures of employment, gig platforms have become a safety net for many individuals. However, Goldman Sachs points out that official employment data fails to reflect the true situation. Among those classified as unemployed or “non-labor force”, 15% are actually engaged in gig work. This means that the actual number of Americans working is much higher than the reported figures, albeit in non-traditional forms of work that generally offer lower and less stable wages.
Goldman Sachs’ analysis shows that gig platform workers earn only 50% to 65% of the wages of traditional jobs on an hourly basis. Despite a decrease in immigration numbers this year, which has led to a slight increase in gig wages in some cities, bridging the gap with traditional job earnings remains challenging.
Goldman Sachs points out that while the gig economy can provide some support, it may struggle to withstand a wave of widespread layoffs during economic downturns. Gig work “can provide a lifeline for some workers during normal times, but in times of economic recession, it may not be sufficient to help all the unemployed.”