Gig-economy workers like Uber and Lyft drivers may be skewing low unemployment numbers


Justin Sullivan/Getty

Gig economy workers may be skewing measures for unemployment.

  • Unemployment numbers may not fully account for gig economy workers, who may self-report as being "employed" despite not being on payroll, according to a new report from the Federal Reserve Bank of Dallas.
  • Gig workers do not have the bargaining power of payroll employees, so they may also account for slowing wage growth.
  • Uber and Lyft drivers make up much of the country's gig workforce, and they've long complained of the low pay and lack of benefits independent contractors deal with.
  • Visit for more stories.

While unemployment may be at record lows, the growing number of gig workers who aren't on payroll may be skewing the data, according to a new report.

The Federal Reserve Bank of Dallas - one of 12 regional reserve banks that make up the centralized Fed - found that although unemployment is low, wage growth has not increased. One reason could be the rise of gig workers: The report found that the number of workers who pay self-employment taxes has risen steadily over the last 35 years.Advertisement

Read more: The world's largest hedge fund breaks down how the US workforce got screwed over the past 20 years

Another reason why headline unemployment may not account for gig workers is due to the use of survey data. Contractors may mistakenly report their status as "employed" when asked in surveys, the study says, despite not being on payroll or working consistent schedules. That's why the Federal Reserve Bank of Dallas instead measured the number of gig workers by those paying self-employment taxes.

At the same time, the increase in gig workers may account for "subdued" wage growth, because independent contractors have less bargaining power: "New technologies that encourage contingent or just-in-time labor lower the bargaining power of workers," the report states. "This, in turn, lowers the natural rate of unemployment and real equilibrium wages."

Uber, which recently filed for an independent public offering, said its business would suffer if drivers were treated as employees. Uber and Lyft drivers have protested the fact that both companies don't offer employee benefits to independent contractors.Advertisement

Many full-time drivers who make the bulk of their income from ride-hailing apps have complained of low pay. "This is pretty crippling to a full-time driver," a Reddit user and self-identified Uber driver posted on the website. "I don't know if I can support myself anymore."