The 9-to-5 slog, the cattle-call commute, the ball-busting from your boss...is all this making you daydream about having more independence and freedom over your job—and maybe even the potential for higher earning power?

Well, welcome to the gig economy!

What is “the gig economy”?

“Gig,” as it’s used here, refers to any kind of paid work that isn’t a regular full-time job.

Technically, the gig economy began the first time a caveman offered someone a handful of pebbles to let a mammoth he’d slain. The reason we’re hearing about it a lot these days is because of a huge surge—from less than 10% of the U.S. workforce around the turn of the millennium to a full 33% now—in the number of people relying on gigs, not traditional jobs, as their main source of income.

And that figure could top 50% within 20 years.

Why is this happening?

Computers, mainly. When e-mail really caught on in the mid-1990s, many workers found that not only could they work from home, they could also work for more than one employer at a time.

Companies, in turn, started hiring more workers on a short-term, per-project basis, saving the expense of housing full-timers in physical offices.

As the Internet evolved and smartphones appeared, whole new gig-working professions were born: Uber driver, eBayer, Etsyist, Airbnber… Technology had supercharged the ability of supply to find demand—which is what capitalism is all about.

So it’s an Internet thing?

Not entirely. The other thing capitalism does is periodically crater the economy, as it did in 2008.

But far from destroying the gig economy, the financial crisis actually entrenched it. Struggling companies dumped full-timers for cheaper part-timers, while millions of newly un- or underemployed workers turned to gig work to make ends meet, using online platforms like TaskRabbit and Fiverr to advertise their skills and find work.

Do gig workers like it?

Many do, and it’s not hard to see why. Gig workers get to set their own hours, for the most part. Often they can work from home, or a coffee shop, or the beach.

Also, the gig economy lets workers try out different fields before choosing one, so they can find and follow new passions in life—and once people find their calling, their odds of monetizing it are now much higher. Maybe only 10,000 people on the planet will want your candlesticks made from animal skulls, but the Internet will let you reach all of them—and bank 100% of the profits.

Wow, that sounds great.

Not so fast, señor. All this flexibility comes at a cost.

There are no paid vacations in the gig economy. Or sick pay, or health insurance, or severance if it doesn’t work out. Also, your income can vary wildly from month to month, making it hard to plan ahead. And it doesn’t take much—a bout of flu, a nonpaying customer—to turn your idyllic freelance lifestyle into a frantic struggle for survival.

Indeed, some labor experts say the gig economy represents a great leap backward to medieval times, before unions and workers’ rights, when those on the lower rungs of the social ladder had to scramble to survive by serving the whims (skull candlesticks) of the idle rich.

So...gig work sucks?

It can. But Congress, to its credit, is already mulling ways to give freelancers more security. One idea is “portable benefits”—health insurance and pensions that would follow a worker from gig to gig.

Meanwhile, Uber drivers, the poster kids of the gig economy, are waging a legal battle for the right to unionize. Those opposed say it’ll mean higher fares for customers. But if the gig economy really is the future of work in America, those few extra dollars to get home from the club may be well worth paying.

Mo’ money

Here’s what the Freelancers Union and Upwork found when they conducted their third annual “Freelancing in America” study last fall.

  • Freelancers contribute about $1 trillion a year in earnings to the U.S. economy.
  • Fifty-four percent of freelancers who left a full-time job say they exceeded their previous salary within one year.
  • Freelancers work an average of 36 hours per week; full-timers average 43 hours, according to the Bureau of Labor Statistics.
  • Half of all freelancers say there’s no money that could lure them to go back to a traditional job.
  • But they do have concerns. Among the biggest: not being paid a fair rate, unpredictable income, and lack of benefits.