Layoffs Drive Surge in gig Work as Labor Market Cools
NEW YORK – As the U.S. labor market shows increasing signs of weakness, a growing number of Americans are turning to gig platforms like Uber, DoorDash, and Instacart to supplement lost income. Approximately one in five individuals who have experienced income reduction, reduced hours, or layoffs are now utilizing these platforms for earnings, a trend coinciding with anticipation for the upcoming September jobs report expected to reveal further labor market challenges.
The shift comes as traditional employment opportunities dwindle. October saw over 153,000 job cuts announced – the highest total for the month since 2003, according to data from Challenger, Gray & Christmas. Payroll firm ADP reported private employers reduced jobs by roughly 11,250 per week in late October, reversing earlier gains.Through 2025 to date, over 1.1 million layoffs have been announced across the country.
Research from Goldman Sachs indicates the increase in gig work is most pronounced in areas experiencing slower regular job growth, with individuals taking on extra shifts to offset financial losses. While providing a crucial safety net, gig work isn’t a complete solution. Goldman’s analysis reveals that roughly 15% of those currently unemployed or outside the workforce are engaged in gig jobs. These positions typically offer lower pay – approximately 50% to 65% of previous earnings – and rarely include benefits or consistent hours. Despite some wage increases for gig workers linked to decreased immigration, many continue to face financial strain. Goldman cautions that the gig economy, while helpful in normal economic conditions, would likely be insufficient to support widespread employment needs during a recession.
Wall street analysts currently favor DoorDash (DASH) among the three gig economy stocks.DASH’s average price target of $287.22 per share suggests a potential upside of over 36%. Instacart (CART) is projected to have the least growth, with an average price target of $50.75 representing a 22.4% gain. Uber (UBER) falls between the two in analyst expectations.
