Shift to Gig Economy Evident as Labor Market Cools With Muted Wage Gains

Even before the pandemic, PYMNTS noted that 32% of workers participated in the gig economy in some way, either to supplement their incomes, or to cobble together revenue streams that represented their primary ways of paying their way through life.

There’s some evidence that the trend may have continued into the volatile economy that’s taking shape thus far in 2025. New data from the Bureau of Labor Statistics, released Friday (March 7), shows that total nonfarm payroll employment increased by 151,000 in February. That was a slight miss from the 163,000 roles that had been expected and also was slightly below the 12‐month average gain of 168,000 jobs.

The best thing that might be said was that there was modest overall growth. But there are signs that increasing pressures will come to bear — as the latest report barely captured any impact from tariffs and a pullback in job creation amid economic uncertainty.

The unemployment rate ticked up by 0.1% to 4.1%.

As for the boost to the gig economy, the data shows that individuals employed part-time for economic reasons increased by 460,000 to 4.9 million. Additionally, the number of people who are not in the labor force who want a job increased by 414,000 to 5.9 million.

That speaks to two trends: individuals are turning to temporary, part-time and project-based options to help make ends meet. In addition, there remains a sizable percentage of people who want to work, but have yet to land in their next role — meaning that they may embrace the immediacy of taking on shorter-term options.

Overall wage growth was muted, as average hourly earnings for all employees on private nonfarm payrolls increased by 10 cents (0.3%) to $35.93, with a year-over-year increase of 4%. Wage growth is not keeping up with spending, even given the decline in January’s consumer expenditures, where the annualized pace is now 4.6%.

The health care sector was the most robust in terms of job gains, adding 52,000 jobs. Within retail trade, the overall impact was a very slight decline, off by 6,000 jobs. But food and beverage retailers fell by 15,000 jobs. Federal government employment declined by 10,000 jobs.

The shift to part-term work may be more pronounced as government workers enter the work force in significant numbers on the heels of department cuts. There was a 0.2% dip in the labor force participation rate to 62.4%, a level not seen in more than two years.

Retailers and merchants have already been sounding various alarms this earnings season about consumer caution, but there may be some winners as the economy shifts a bit amid a change in workforce composition.

PYMNTS Intelligence, in collaboration with Ingo Payments, has noted that platforms and providers enabling ad hoc instant payments have seen increased demand, as these irregular payments, occurring outside of typical invoicing and payroll processes, now constitute a growing portion of enterprise senders’ volume.

On average, they represent 30% of accounts payable volume in dollars in April 2024, up from 24% in the final quarter of 2023. Gig economy senders enabling those payments were at the forefront of this trend, with 39% of their ad hoc payments sent instantly.

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