The rise of Alaska’s gig economy
When Lesli Olson moved to Anchorage from New York City in 2006, she was happy to find a community with its own distinct style, one that she was inspired to celebrate, document, and participate in via Instagram and a blog. Thus, Far North Fashion was born.
Although her account began as a creative outlet, when Olson started using LiketoKnowit, a social-based shopping service, she started making commissions when followers purchase items she links to. Small at first, her income from Far North Fashion grew steadily and now makes up a good share of her family’s income.
“My husband is starting a new job soon and taking a pay cut,” Olson says. “But when I looked at the numbers, I realized Far North Fashion would actually make up the difference for us.”
Olson invests a considerable amount of time each week in her Instagram account, getting up two hours early to search online for deals to share with her followers. Throughout the rest of the day she responds to comments, spends time styling her daily look, and poses for photos to share to her account — all when she’s not working at her job as a music teacher at Bayshore Elementary School or caring for her family.
Although being compensated for her time is a welcome benefit, Olson says she’d continue even without the commissions.
“I’m such a nerd when it comes to fashion,” she said. “And I have a heart for bringing people together. Fashion blogging through a social network allows me to blend two things I love.”
Olson is considered a gig worker, someone who earns income via activities outside of traditional, long-term employer-employee relationships. This definition spans workers like Olson who perform gig work in addition to a full-time job, to those whose entire income is gig-based. Gig workers can be thought of as a cross between business owners and wage-earning workers.
Nationally, more than a quarter of U.S. workers participate in the gig economy in some capacity. Of those, about 1 in 10 relies on gig work for their primary income.
About 1 in 6 Alaska workers are self-employed, according to Nolan Klouda of the University of Alaska Center for Economic Development. These are business owners without employees, and can be considered gig workers. Drawing on U.S. Census Bureau data, Klouda notes that these individuals earned $2.8 billion in revenues in 2018, or about $49,000 each.
“The average varies considerably by industry,” said Klouda. “It ranges from $104,000 for self-employed individuals in real estate to less than $15,000 for educational services.”
Revenues are not necessarily the same as personal income for these individuals, who may have expenses to pay from their revenues.
Gig work offers more ways for people to be productive and earn money while creating value and increasing options for consumers. It also provides an opportunity for people to find work that suits their skills or schedules, or like Olson, follow a passion.
Those that have extra time and want to add to their incomes can deliver groceries for Instacart, walk dogs via Rover.com, or turn extra rooms or family cabins into vacation rentals on Airbnb. Home bakers can organize pop-up markets or deliver directly to customers, crafters can set up an Etsy account, and countless more can pursue their dreams of becoming social media influencers.
However alluring, Klouda cautions against romanticizing gig work.
“People’s experiences will vary hugely,” he said. “For some it’s simply a new opportunity to make money on top of whatever else they were doing. For others, gig work might force them down a pathway of having to earn a paycheck without the normal protection of a traditional job.”
Gig workers go without employer-sponsored health insurance or 401k retirement plans, do not pay unemployment insurance, or have paid vacation or sick leave.
They are not protected by the Family Medical Leave Act or Workers Compensation, and don’t have a union to advocate for them. Gig work can also be lonely or isolating, without an opportunity to to build meaningful relationships with colleagues, clients, or customers.
The Anchorage Chamber of Commerce might have the beginnings of a solution to some of the challenges facing gig workers. In September, the Anchorage Chamber announced a new way for gig workers to connect and find support through the Anchorage Gig Economy Network, or AGEN, and committee.
Led by Dr. Jocasta Gee Olp, the Anchorage Chamber’s diversity coordinator, and Olson as chair, the committee intends to spend the next year building the network and learning from its members.
In the future, Olp says that the Anchorage Chamber may advocate on issues facing gig workers, but only after they fully understand what’s needed to support the sector. She is particularly interested in learning more about full-time gig workers.
“I’m curious about how they made that decision: was it out of passion or necessity?” Olp said. “I also want to know how sustainable gig work is for people and what kind of resources they’d like to see offered.”
The Anchorage Chamber’s focus on the gig economy comes at a time when workers in the sector may need increased support.
Although it’s too soon to tell how COVID-19 is affecting gig workers, Klouda says that just as wage-earners have been subject to layoffs and business owners have faced closures and falling revenues, self-employed individuals have almost certainly suffered from a poor economy, despite being eligible for unemployment benefits offered through the CARES Act.
He’s recently noted a trend in an increase in business applications during the pandemic, indicating that more Alaskans are starting business, which is consistent with the trend of self-employment and increased entrepreneurship during recessions.
“Economists talk a lot about creative destruction during recessions,” says Klouda. “Businesses fail at high rates, but new businesses get started. When it comes to gig workers, we can’t be sure yet whether the creative part really balances out the destructive part.”
During the course of the next year, the Anchorage Chamber may be able to address some of the unknowns surrounding the gig economy.
“We want our membership, our board, and our leaders to really get to understand the gig economy, the needs of the network, and learn about any challenges they might be facing” said Olp. “Gig workers are part of Anchorage’s business community, and with that comes the opportunity to have a voice.”
Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.