Highlights of Statistics Canada Report Measuring Workers in the Gig Economy

The following is pertinent information gleaned from a December 2019 Statistics Canada research paper, "Measuring the Workers-On-Demand Gig Economy in Canada," which studied tax and administrative data from the Canada Revenue Agency (CRA), Canadian Employer-Employee Dynamics Database (CEEDD), Labour Force Surveys (LFS) and other sources. Separate comments from TML Weekly are indicated with square parenthesis.

Gig workers are usually not employed on a long-term basis by a single firm; instead, they enter into various contracts with firms or individuals (task requesters) to complete a specific task or to work for a specific period of time for which they are paid a negotiated sum. This includes independent contractors or freelancers with particular qualifications and, increasingly, on-demand workers hired for jobs that are offered and mediated through the growing number of online platforms and crowdsourcing marketplaces such as Uber, Lyft, TaskRabbit, Upwork, Guru, Fiverr and Freelancer. Gig workers' earnings and work activity are uncertain, minor or occasional.

From 2005 to 2016, the percentage of gig workers to total workforce in Canada rose from 5.5 per cent to 8.2 per cent. This represents 1,666,061 worker-on-demand gig workers in 2016. These workers-on-demand either earned no reportable wages or salaries as T4 taxable income or combined their gig work with T4 taxable wages or salaries.

Some of the increase to 8.2 per cent coincided with the introduction and proliferation of online platforms employing on-demand workers with very "flexible" and often minimally binding work arrangements (Uber, Lyft etc).

The annual income of a typical gig worker was usually low. The median net gig income in 2016 was only $4,303. Lower paid workers in the bottom 40 per cent of the annual income distribution were about twice as likely to be involved in gig work as other workers.

Gig work was generally only a temporary activity. Roughly one-half of those who entered gig work in a given year had no gig income the next year. However, a non-negligible share of gig work entrants -- about one-quarter -- remained gig workers for three or more years.

Gig work was more prevalent among immigrants than among Canadian born people. In fact, 10.8 per cent of male immigrant workers who had been in Canada for less than five years were gig workers in 2016, compared with 6.1 per cent of male Canadian-born workers.

A 2017 survey found that nine per cent of the Greater Toronto Area workforce worked through online platforms. People who work through online platforms are only part of the gig economy since not all gig workers do.

Gig workers are likely to be classified at this time for tax purposes, (and whether they qualify or not for state-organized and company paid or co-paid benefits such as Employment Insurance (EI), Workers' Compensation and the Canada Pension Plan) as unincorporated self-employed workers who report business, professional or commission income on their income tax returns. They must fill out a T2125 Statement of Business and Professional Activities and file it with their T1 tax form. They do not receive a T4 record of earnings from their workers-on-demand employer.

Statscan defines workers as all individuals who: (a) reported any employment income, from T4 slips or other employment income such as tips, gratuities or director's fees on their T1 forms, (b) reported any unincorporated self-employment income on a T2125 Statement, or (c) were identified as owners of incorporated businesses through corporate tax returns and worked in their business.

The Labour Force Survey puts workers into categories: private and public employees, incorporated self-employed workers with and without employees, unincorporated self-employed workers with and without employees, and private employees working in family businesses without pay.

Statscan says gig workers are not wage employees, do not have a long-term contract with any employer, do not have a predictable work schedule and do not have predictable earnings. They are classified as unincorporated self-employed freelancers, day labourers, or on-demand or platform workers. Statscan identifies gig workers in part by how workers report their work arrangements to tax authorities.

[Comment: In this way, the employer and state authorities subjectively classify workers as workers or not according to whatever favours the interests of those who buy the exchange-value of the capacity to work of the working class and take control of its use-value and the social product workers produce. According to a particular labour law or code, a classification as unincorporated or even incorporated self-employed freelancers, day labourers, or workers-on-demand employed through a software platform or on contract through worker traffickers may mean the employer does not have to guarantee standards for overtime pay, paid vacations, minimum wage, paid sick leave; ensure and pay or co-pay for any state-organized benefits and payroll deductions for EI, injured workers' compensation or pensions; meet certain established standards for insurance for a particular job, qualifications for the work, safety while working, or recognize the legal right to form a collective defence organization (union).

This means these software platform companies can drive down the standard of living of the working class using new forms of class struggle against workers. They also act as disruptors of traditional businesses, in particular the taxi industry at this time. The ride hailing companies and others using software platforms are not subject to the market prices that public authorities have in place for taxi companies, the established exchange-value for the capacity to work of those employed, other standards for insurance and licensing, the number of cars they can deploy and the demand that a certain number of cars must be equipped to handle passengers with special needs.

This means that Uber and Lyft, for example, can undercut the market prices and steal market share from the already established taxi companies and drive them out of business. The software platform companies operating outside the established norms can disrupt the traditional companies, drive them out of business, drive down workers' wages and terms of employment, and then gradually increase the market prices they charge to achieve maximum private profits. Also, Uber and Lyft are not restricted from charging "surge" prices during periods of heavy demand or whenever they set their algorithms to do so. After only one week of Uber and Lyft operating in Vancouver, both taxi companies and drivers reported a decline of 30 per cent in their operations. The proliferation of ride hailing and car share software platforms also acts to worsen the overall anarchy and chaos of the urban transportation system, generating yet more congested roads, traffic jams, accidents and air pollution.

Without companies issuing a T4 tax slip for what workers receive in return for the exchange-value of their capacity to work, the added-value the workers-on-demand company expropriates from the sale of the service that workers produce can be hidden from any public authority. In this case the employer does not have to declare any difference between the gross income from selling the service (or good) the worker produces for which a customer pays, and the amount the employer deducts from the gross income to pay the exchange-value of the worker's capacity to work and for any consumed transferred-value from fixed equipment and circulating material or fees. The employer can hide and move the expropriated added-value (profit) out of the economy and country to a tax-free haven. According to numerous reports, the practice of Uber is to send the entire gross income to the Netherlands from where it returns the exchange-value for the driver and any money needed to pay for already-produced transferred-value and fees. The remaining added-value (profit) is apparently then sent to the tax-free haven of Bermuda.]


The median business income of unincorporated self-employed workers was $10,000 in 2013. Less than four per cent of unincorporated self-employed workers in the CEEDD had employees. This result was consistent with the notion (using tax data) that self-employment work is a relatively minor activity for many individuals identified as unincorporated self-employed workers.

Among gig workers, 48.6 per cent had no wage-earning job and reported no employment income (on a T4); while 36.3 per cent had one wage job and about 15.1 per cent had multiple wage jobs. This indicates gig workers were split almost evenly between those who had no other earnings except for their gig earnings and those who supplemented their wages and salaries with the earnings from their gig activities. The median net income for gig workers was $4,303 in 2016.

The median share of gig income compared with total earnings was 76 per cent, meaning that for about half of all gig workers, gig earnings represented more than three-quarters of their total annual earnings. For more than one-quarter of all gig workers, their gig earnings represented all of their earnings.

A sharp increase in the number of gig workers corresponds with the 2008/2009 recession, and it was somewhat sharper for men than for women. The timing of the increase suggests that the growth in the share of gig workers during those years can be largely attributed to push factors such as declining employment prospects. A second sharp increase was observed around 2012/2013, but the reason why is less intuitive and may be related to the proliferation of online platforms in Canada that started around that time.

The share of gig workers was substantially higher among women than among men -- and this gap has widened over time. In 2016, the share of female gig workers to all female workers was about 9.1 per cent, while the share of male gig workers was about 7.2 per cent. These percentages translate into about 991,320 total gig workers in 2005 and 1,666,061 gig workers in 2016.

In terms of the duration of gig work, 56.4 per cent of gig workers who entered in 2013 (i.e., those who were gig workers in 2013 but not in 2012) remained gig workers for at least one year, while 39.1 per cent remained gig workers for two consecutive years and 29.8 per cent remained gig workers for three consecutive years. Uber started its operations in Canada in 2012 and recently began operating in Vancouver. In 2019 it reported 90,000 drivers in Canada alone and 3.9 million worldwide. The biggest rideshare online platform company in China, called Didi Chuxing, has 21 million drivers.

Gig workers with no (additional) wage or salary earnings spiked around the recession in 2008/2009, but remained relatively stable until another spike in 2012/2013.

Gig workers with (additional) wage or salary earnings increased virtually linearly from 2006 to 2016, with only minor bumps around 2008/2009. The linear trend was particularly apparent among female gig workers with additional wage or salary earnings.

Gig work became more prevalent from 2005 to 2016. Gig workers with no wage earnings seem to have responded more strongly to both push factors (recession) and pull factors (proliferation of online platforms). Overall, however, an increasing share of workers do gig work in addition to their main wage-earning jobs, but also an increasing share of gig workers do not earn any additional wages or salaries.

Entry into gig work in the United States is generally preceded by a decline in non-gig income. A similar pattern was found in Canada. T4 earnings dropped dramatically in the year an individual entered gig work, and this drop in T4 earnings was larger for men than for women.

EI benefits rose before the entry into gig work and dropped sharply in the first year of gig work. For women, this pattern was observed for both regular and special EI benefits (maternity).

Researchers asked whether the decline in wages and salaries before the first year of gig work was the consequence of outside shocks such as job loss or wage cuts. Given the EI eligibility rules, the rise in EI benefits before entry into gig work seems to suggest that outside shocks are important contributors to the decision to enter gig work.

Unincorporated self-employed workers who report professional, business or commission income (e.g., Uber and Lyft drivers and delivery workers) attach a T2125 Statement of Business and Professional Activities to their T1 (tax) forms. The T2125 form details all revenues and expenses related to the individual's unincorporated business and professional activities.

The rate of unincorporated self-employment from 2005 to 2016 overall was stable, yet with a rising share of gig workers among all Canadian workers. This implies that increasing numbers of unincorporated self-employed workers are gig workers who file at least one T2125 form.

Did gig work replace or supplement less precarious forms of unincorporated self-employment that are associated with a formal business? First, unincorporated self-employed workers continued to file T2125 forms at the same rate, but were increasingly less likely to report a Business Number. A Business Number is associated with an actual business. In this scenario, gig work replaced more stable forms of self-employment that required stronger commitment and possibly larger initial investment.

More gig activities are now possibly reported to the CRA because more gig work is done through online platforms, unlike in the past, where much of it was done through informal referrals from friends, neighbours, (underground) etc.

[Comment: Online platform employers refuse to issue T4 slips as part of the fraud that the workers providing the service through the platform are self-employed and not workers selling their capacity to work. This means the online business does not have to meet any federal or provincial standards regarding terms of employment such as overtime, paid statutory holidays and vacations, and contribute to EI and Workers' Compensation payroll taxes etc.]

The increase in the share of gig workers represents both a decline in the share of unincorporated self-employed workers with a steady business and an increase in the number of self-employed workers who do gig work in addition to their main business activity.

No age group dominated the age distribution of gig workers; gig workers were spread more or less evenly across the entire age spectrum.

The shares of gig workers among all workers were higher where opportunities for gig work were greater, specifically in the three regions that have major Canadian urban centres -- Montreal, Toronto and Vancouver.

Forty-nine point eight per cent of male gig workers and 45.2 per cent of female gig workers belonged to the lowest two quintiles of the total income distribution. Among both men and women, the prevalence of gig workers in the top income quintile was roughly half the prevalence of gig workers in the bottom income quintile. (See charts in full report for quintiles.)

Most male gig workers worked in professional, scientific and technical services (19.0 per cent); construction (12.4 per cent); and administrative and support, waste management and remediation services (10.6 per cent), which includes activities such as administration, hiring and placing personnel, preparing documents, providing cleaning services, and arranging travel.

Female gig workers are concentrated primarily in health care and social assistance (20.2 per cent) and professional, scientific and technical services (17.4 per cent).

The industrial distribution of gig workers was based on the industry of their main job. The industry with the highest share of male gig workers was arts, entertainment and recreation (15.6 per cent), which is the industry that originated the term "gig work." A high prevalence of gig workers was also observed in health care and social assistance (13.3 per cent), educational services (11.3 per cent) and real estate and rental and leasing (10.8 per cent).

Among women, the industry with the highest share of gig workers was other services (20.1 per cent), a broad category that includes personal care providers, cooks, maids, caretakers and nannies (but excludes public administration).

A recent study found that much of the recent increase in independent contracting in the United States was driven by rapid growth in the transportation sector that can be directly linked to Uber and similar online platforms. There was a sharp increase in the share of gig workers in taxi and limousine services in the mid-2010s. Yet even in 2016, when the share of male gig workers in taxi and limousine services almost doubled compared with 2014, this share did not exceed three per cent of all male gig workers.

Over one-third of all male gig workers (36.0 per cent) had a university degree, while a similar percentage of male gig workers had only a high school diploma or less.

There was a particularly high prevalence of gig workers among men (13.7 per cent) and women (16.5 per cent) who held graduate degrees (master's degree and higher). It is likely that the proliferation of supply-driven crowdsourcing marketplaces such as Upwork and Freelancer has driven this number.

More than one-third of all male gig workers and more than one-quarter of all female gig workers had only a high school diploma or less, and just over one-third of both male and female gig workers had a university degree. Statscan notes that workers in the upper quintiles of the income distribution were less likely to be gig workers than those in the lower income quintiles.

The shares of gig workers were considerably higher among immigrants, especially recent immigrants, than among Canadian-born workers. More than one-third of all male gig workers were immigrants -- a far larger share than the share of immigrants in the Canadian labour force (about 24 per cent in 2016). Even immigrants who had been in Canada for 20 years or more were more likely to be identified as gig workers than Canadian-born workers. Among recent immigrants, immigrant men were more likely to be gig workers than immigrant women but the opposite was true for immigrants who had been in Canada for 20 years or more.

Nineteen point six per cent of male gig workers were individuals with main occupations as trades, transport and equipment operators, and related occupations. Female gig workers were concentrated in sales and service occupations (22.1 per cent) and occupations in education, law, and social, community and government services (20.3 per cent).

The shares of gig workers among all workers were the highest among workers with main occupations in art, culture, recreation and sport (24.2 per cent for men and 26.6 per cent for women). About 8.6 per cent of male gig workers and 9.8 per cent of female gig workers reported not working in either 2015 or 2016 in the census.

For lengthy excerpts from the research paper click here.
For the complete research paper, click here.

This article was published in

Volume 50 Number 3 - February 8, 2020

Article Link:
Highlights of Statistics Canada Report Measuring Workers in the Gig Economy - K.C. Adams


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