THE GIG ECONOMY IS ALIVE AND GROWING

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1 ABOUT EVERYTHING WITH NEIL HOWE THE GIG ECONOMY IS ALIVE AND GROWING THE NUMBER OF U.S. WORKERS WITH IRREGULAR JOBS IS INCREASING. August 9, 2016

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3 DEFINING DIGITAL MATCHING FIRMS 1. They use information technology (IT systems), typically available via Web-based platforms, such as mobile apps on Internet-enabled devices, to facilitate peerto-peer transactions. 2. They rely on user-based rating systems for quality control, ensuring a level of trust between consumers and service providers who have not previously met. 3. They offer the workers who provide services via digital matching platforms flexibility in deciding their typical work hours. 4. To the extent that tools and assets are necessary to provide a service, digital matching firms rely on the workers using their own. Source: U.S. Department of Commerce (2016) HEDGEYE 3

4 6% 5% 4% 3% 2% 1% 0% WHO IS A CONTINGENT WORKER? BLS Estimates of the Contingent Workforce (% of Employed Labor Force) High: 4.9% Low: [VALUE] High: 4.3% Low: [VALUE] High: 4.1% Low: [VALUE] Source: Contingent Work Supplement (2005) BLS definition of contingent workers: those who do not have an implicit or explicit contract for ongoing employment. HEDGEYE 4

5 BLS SHOWS DECLINE IN SELF-EMPLOYED 12.0% 11.5% 11.0% 10.5% 11.5% Share of Self-Identified Self-Employed Workers (% of Employed Labor Force) 10.8% 10.6% 10.5% 10.2% 10.3% 10.0% 9.5% Source: BLS (2016) HEDGEYE 5

6 GOV T DATA SHOW RISE OF GIG WORKERS 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 5.6% GAO Estimates of the Contingent Workforce (% of Employed Labor Force) % 7.9% Temps, Contractors, and On-call Workers 30.6% 35.3% 40.4% Total Contingent Workforce Source: U.S. Government Accountability Office (2015) HEDGEYE 6

7 GOV T DATA SHOW RISE OF GIG WORKERS The Overlapping Definitions of Contingent Workers BLS: SHRINKING Contingent Workers 1.8%-4.1% in 2005 GAO: GROWING Contingent Workers 40.4% in 2010 BLS: SHRINKING Self-Employed Workers 10.3% in 2016 HEDGEYE 7

8 LATEST DATA SHOW RISE OF GIG WORKERS Percentage of Adults Participating in the Online Platform Economy, Monthly Labor Platforms: Participants perform discrete tasks. Ex: Uber, TaskRabbit. Source: JPMorgan Chase Institute (2016) Capital Platforms: Participants sell goods or rent assets. Ex: ebay, Airbnb. HEDGEYE 8

9 LATEST DATA SHOW RISE OF GIG WORKERS Cumulative Percentage of Adults Who Have Ever Participated in the Online Platform Economy Labor Platforms: Participants perform discrete tasks. Ex: Uber, TaskRabbit. Source: JPMorgan Chase Institute (2016) Capital Platforms: Participants sell goods or rent assets. Ex: ebay, Airbnb. HEDGEYE 9

10 SERVICE INDUSTRY EMPLOYMENT THRIVES Thousands of Service-Providing Employees 126, , , , , , , , , , , ,000 All Employees in Service-Providing Industries vs. Goods-Producing Industries 22, ,985 Service-Providing Industries Goods-Producing Industries 124,544 19,631 24,000 23,000 22,000 21,000 20,000 19,000 18,000 17,000 Thousands of Goods-Producing Employees From Jan 2006 to June 2016, Employment in Goods- Producing Industries fell (-12.6%). Employment in Service- Providing Industries rose (+10.2%). Source: FRED, BLS (2016) HEDGEYE 10