Millions of gig workers might be overlooked each month in the U.S government’s job report, influencing how the Federal Reserve gauges the job market and potential inflation risks.
Studies presented at a Boston Federal Reserve conference suggest that gig workers, whether driving for Uber or taking up piecework jobs, often don’t perceive themselves as employed or part of the labor force. Consequently, their survey responses may significantly undercount the workforce, according to economists Anat Bracha and Mary A. Burke from the Hebrew University Business School and the Boston Fed, respectively.
Estimates vary, suggesting an undercount of a few hundred thousand to as high as 13 million workers. This could affect the reported share of the adult population engaged in at least part-time work by about 5 percentage points, a crucial metric monitored by the U.S. central bank.
While this implies a potentially tighter labor market than believed, the researchers argue it allows the economy more space for increased work and production without triggering inflation. They suggest the Fed should consider allowing the job market more leeway.
The research, analyzing responses from a New York Fed survey on informal work from 2015 to 2022, highlights discrepancies in survey responses. This mismatch between sections covering online platforms or contract jobs and the Labor Department’s monthly employment survey might be causing millions to go unnoticed in statistical analyses.