Image Source: Tony Sebastian

By: Emily Liu

Edited By: Eric Chen

The gig economy market, a labor market centered on short-term, temporary, and flexible work arrangements, is experiencing its largest expansion in recent years. This growth is particularly pronounced in the world’s two largest economies, China and the US, where gig workers now number in the hundreds of millions, reshaping labor markets in ways that can no longer be ignored by policymakers or economists. According to a report by The Interview Guys, over 60 million Americans are classified as gig workers in 2025. They generated $56 billion in revenue in 2024 and represent approximately 36% of the total U.S. workforce. 

This phenomenon is not confined to the United States; the rapid expansion of the gig economy is a global trend, with China being a key participant.A report from Jamestown indicates that in China, 20% to 35% of the working-age population now earns a living through flexible employment. This includes 84 million gig economy participants, a figure that continues to rise steadily.

Is it good news for a market to be steadily expanding and developing? For the traditional job market, yes, it is good news. But for the gig market, the answer is uncertain, because the expansion of the gig market is often associated with the decline of the traditional job market. COVID-19 drove China’s gig market expansion, while the U.S. gig market expansion resulted from the 2022 tech industry layoffs. We can observe that the expansion of the gig market does not signify more people finding employment. Instead, it represents a negative spillover effect between labor markets: as more individuals struggle to secure jobs in the traditional job market, they turn to the gig market as a temporary means of survival.

China’s street vendor economy is the most vivid embodiment of this phenomenon. As documented by The Borgen Project, the COVID-19 pandemic caused China’s first-quarter GDP to decline by 6.8% year-on-year, while the urban unemployment rate climbed from 5.7% to 6.2%. During that year’s National People’s Congress and Chinese People’s Political Consultative Conference sessions, then-Premier Li Keqiang mentioned employment issues over 40 times and explicitly stated that street vending holds equal status to high-end industries, as recorded by Daxue Consulting. In response, according to the Sichuan Daily, Chengdu stepped up first in relaxing restrictions on mobile vendors. By May of that year, the city had added 2,234 new stalls and permitted 17,748 shops to extend their business space outdoors. China News Service reported that at least 27 other cities subsequently introduced similar policies.

However, it is worth noting that China’s attitude toward the street vendor economy was entirely different before the COVID-19 pandemic. From 2003 to 2019, the Chinese government placed particular emphasis on building modern, civilized cities, which led to increasingly stringent street regulations, including prohibitions against the presence of small vendors. Street vendors were difficult to regulate and occupied public thoroughfares, posing as safety hazards by causing traffic disruptions and conflicts with motor vehicles. Space constraints also made it challenging for some vendors to properly dispose of food waste, leading to sanitation issues on the streets. More significantly, prior to 2019, the street vendor economy had not emerged as a recognized “way of life” in the public consciousness, nor did it constitute a mainstream component of China’s economy, as vendors primarily sold food without regulatory oversight, rendering them incompatible with China’s broader modernization agenda. Consequently, the Chinese government unhesitatingly prioritized urban sanitation and street safety over the street vendor economy. This entrenched regulatory stance, however, would undergo a dramatic reversal in the face of an unprecedented economic crisis.

As mentioned, the economic impact of the COVID-19 pandemic has fundamentally altered the attitudes of both governments and the public toward the street vendor economy. It has transformed from being viewed as “unsanitary,” “unsafe” and “to be eradicated” into something that is now “encouraged,” and has even become increasingly celebrated in online discourse. The government would not abandon over a decade of urban governance without good reason, unless employment pressures have become so severe that compromise is unavoidable.

However, the problem is that while the Chinese government is attempting to address employment and economic downturn issues by encouraging the street vendor economy, the livelihood security of these vendors remains unresolved.

China’s welfare and insurance policies are inextricably linked to employment. For many individuals, leaving a company effectively means losing the insurance and benefits provided by that employer. For instance, China’s “five insurances and one housing fund,” covering medical, pension, unemployment insurance, and others, are tied to formal labor contracts. Most gig workers in the flexible employment sector operate as independent contractors, falling outside the social security coverage of any enterprise.

This lack of institutional safety nets is further compounded by income instability. National Bureau of Statistics of China indicates that the average monthly income for gig economy workers is 6,000 yuan (less than $1,000), while the average annual expenditure for urban residents in China in 2024 was 34,557 yuan (approximately $4,900), with monthly expenses averaging around 2,880 yuan (about $410).

However, the per capita expenditure figures provided by this statistical data reveal a stark reality. Taking a typical three-person household as an example, the average monthly household consumption expenditure amounts to approximately 2,880 yuan multiplied by three, totaling roughly 8,640 yuan. When juxtaposed with a monthly income of 6,000 yuan, this figure becomes particularly compelling: the earnings of a flexible worker barely cover the basic expenses of an ordinary urban family.

This assumption may be overly pessimistic, or perhaps relatively optimistic. We’re assuming a household consists of only three people, with just one individual holding a single gig economy freelance position. If a married couple both work in the gig economy, each earning 6,000 yuan monthly, the household’s total monthly income would reach 12,000 yuan, which is sufficient to cover the expenses of a three-person family. However, according to National Economy Witnessed Steady Progress amidst Stability with Major Development Targets Achieved Successfully in 2024, the problem arises as China’s aging population intensifies, placing more families under the obligation to support their parents. This means a couple must not only raise their children but also provide for 1 to 4 elderly parents. In this scenario, a monthly income of 12,000 yuan becomes extremely strained.

Beyond the most obvious issue of people’s living standards, the vigorous development of the street vendor economy simultaneously masks a more serious unemployment problem.

According to Manufacturing Employment and Compensation in China, any worker who engages in paid labor during the survey period  under China’s labor statistics methodology, even if it’s just one day of street vending earning a single yuan, is classified as employed rather than unemployed. Thus, when 2 million flexible workers entered the street vending economy, they shifted from being statistically “unemployed” to “employed.” However, the actual economic circumstances of some among them may be virtually indistinguishable from unemployment.

In the U.S., the expansion of the gig market takes various forms, yet its underlying logic mirrors China’s street vendor economy. In recent years, a phenomenon dubbed “side hustle culture” has rapidly spread across American social media. TikTok and Instagram are flooded with videos teaching people how to do dropshipping, sell digital products, or use ChatGPT to generate passive income. The overarching narrative emphasizes that “you shouldn’t rely solely on one income stream,” packaged with a strong entrepreneurial spirit. On the surface, this culture presents itself as an active choice: “be your own boss,” “achieve financial freedom”. But is that really the case? Or is there another layer to the story we haven’t uncovered yet?

Yes, these people have suddenly developed a tremendous passion for entering the gig market and having a side hustle, because a single job is no longer enough to sustain their livelihoods.

According to a DollarSprout survey, the proportion of side hustlers primarily motivated by “covering basic living expenses” surged from 11.8% in 2021 to 21.6% in 2024 . A GovFacts report further indicates that 61% of side hustlers stated their lives would be unaffordable without this supplementary income; 49% directly cite the current economic climate as their driving factor, while 42% attribute it to inflation. These figures reveal that for a significant portion of Americans, a side hustle isn’t a lifestyle upgrade but a forced response when a full-time job no longer covers basic living costs.

This accelerating trend is directly linked to turbulence in the traditional job market. Crunchbase indicates that the U.S. tech sector saw cumulative layoffs exceeding 420,000 between 2022 and 2023, impacting industry giants like Meta, Amazon, Google, and Microsoft. Concurrently, the number of full-time independent workers doubled from 13.6 million in 2020 to 27.7 million by 2024, reported by The Interview Guys; the timelines of these two trends nearly perfectly align. More notably, a significant gap exists between official statistics and reality: GovFacts indicates approximately 8.4 million people hold multiple jobs, yet multiple surveys suggest the actual number of Americans with side hustles reaches 80 million. This nearly tenfold “measurement gap” itself suggests traditional employment statistics are systematically underestimating the fragility of the labor market.

Much like the situation in China, gig workers in the United States also face a social security vacuum. In the U.S., core benefits such as health insurance, pensions, and paid sick leave have long been tied to employers. This means that once gig workers are classified as independent contractors, they are excluded from these protective systems. Data reveals that only 40% of gig workers have health insurance, compared to 82% of full-time employees. The gap is even more pronounced for short-term disability insurance, with coverage rates of just 5% for gig workers versus 42% for full-time employees, while over half of U.S. freelancers report having no access whatsoever to paid sick leave, unemployment insurance, or healthcare coverage, according to AXIS Capital. 

California once attempted to address this loophole through legislation. In 2019, the state legislature passed AB5, requiring companies to reclassify gig workers as employees, thereby granting them protections under labor laws such as minimum wage, overtime pay, and unemployment insurance. However, platform companies like Uber, Lyft, and DoorDash promptly launched Proposition 22, the most expensive referendum in California history, which is pouring over $200 million into the campaign. It ultimately passed in 2020 with 58% support, securing an exemption from AB5 for app-based platforms. Ironically, the “120% minimum hourly wage guarantee” promised by these companies, after deducting unpaid waiting time and missing benefits, equates to an actual hourly income of just $5.64, far below California’s then-minimum wage of $13. More significantly, the proposition stipulates that any amendment requires an absolute majority of eight-sevenths of the state legislature, making it virtually impossible to overturn.

These data and cases directly reveal a stark reality: even when policymakers attempt to address gaps in social security, platform capital possesses sufficient resources to neutralize such efforts, with their primary objective being to minimize expenditures.

When we shift our focus from data back to everyday life, an intriguing phenomenon emerges: Why is content about street vending, private entrepreneurship, and freelancing gaining such traction on social media? Figure I shows the search index for the term “street vending” on Baidu, China’s largest search engine, from 2016 to 2023. We can see a very noticeable surge in searches in July 2020, reaching over 15,000. In contrast, search trends remained relatively flat both before and after the pandemic . On TikTok alone, videos tagged #sidehustle has accumulated over 5.6 million posts, reflecting the explosive growth of side hustle culture on social media. The narrative templates for this content are strikingly consistent: whether Chinese bloggers showcase their “daily thousand-yuan coffee stalls” or American creators share “how to earn $5,000 monthly with ChatGPT,” the core message consistently encourages people to enter the gig market or pursue side hustles.

FIGURE I: BAIDU INDEX ON “STREET VENDING”

But the data presented in this article tells a completely different story. These videos garnered such massive traffic precisely because they resonated with the anxieties of a vast demographic. People haven’t suddenly fallen in love with entrepreneurship; rather, the traditional job market can no longer provide them with a decent livelihood. What social media does is recode a structural economic problem into individual lifestyle choices: unemployment becomes “freedom,” survival pressures become “entrepreneurial spirit,” and systemic failures are concealed behind meticulously edited “success stories.”

From Beijing’s night markets to Los Angeles’ garages, from China’s 200 million flexible workers to America’s 80 million side hustlers, two vastly different economies are undergoing the same silent transformation. The explosive growth of the gig economy has never been a triumphant declaration of free markets; rather, it is the echo of a traditional employment system in decline. Perhaps the real question worth asking isn’t “How can I start my side hustle?” but rather: When a full-time job is no longer enough to sustain a person’s livelihood, what exactly is wrong with our economy?