Question

a) Why might the U.S. government, which funds Social Security, Medicare, and unemployment insurance programs by taxing wages, desire to find a way to reduce self-employment and inhibit the growth of the gig economy?

b) Do you see the growth of the gig economy as a positive or negative trend in the economy? Explain.

1. In the first part, be sure to describe how these programs are funded to help support your position.

2. In the second part, briefly discuss both the pros and the cons of the gig economy and give your position on whether it is a positive or negative trend. It is important to look at both sides to help support your position.

Be sure to apply the concepts regarding unemployment. Even if some gig workers are not considered part of the unemployment rate, are they still contributing to the economy? What might be the pros and cons to businesses for hiring gig workers? Could that benefit or harm the consumer?

Answer 1

1.      This is because the gig economy stimulates the economy less and the government does not collect enough tax from the gig economy or self-employed people.

2.      The growth of the gig economy is a positive trend.

Step-by-step explanation

1.      The U.S government desires to find a way of reducing self-employment and bar the growth of the gig economy so as to stimulate economic growth as well as increase employment in the private and public sectors. The rise in employment will see the taxes collected by the government rise. The individuals who work in the gig economy basically are regarded as contractual or part-time workers and this implies that they can actually avoid payment of higher taxes because they aren't working full time. The programs like Medicare, social security and unemployment insurance get supplemented by the taxes which the government collects from the people, Thus, less full-time employed people and more self-employed people together with a rising gig economy will mean that the economy will be stimulated less and the money collected through taxes to support programs such as Medicare, social security and unemployment insurance will be less.

2.      The growth of the gig economy in this era of technology is a positive trend since it provides employment to the many young people who cannot find jobs. Gig economy absorbs many people who are contributing to the economic growth through spending their income in the purchase of other commodities and paying some taxes. Also, the gig economy is a way of encouraging entrepreneurship which is the backbone of the economy.