The popularity and demand for gig jobs is rapidly spreading across the U.S. The pandemic lead to a drastic increase in gig workers across the U.S., showing a 230% increase in the past 2 years. Instead of a traditional 9-to-5 job, more people are turning to freelance or short-term contract work to either boost their income or become full-time independent workers.
With technology advancements and increased availability of freelance apps, finding gig work opportunities is now simpler and more convenient. These digital tools enable gig workers to choose flexible working hours and determine their own work rates, allowing them to adjust based on demand and competition. This allows them to stay competitive in a fast-paced market.
Amongst this changing landscape, Agents Only created the Gig Worker Index to determine the best states for Gig Workers. To determine this, Agents Only compared the 50 states across 10 distinct metrics. The data set ranges from the average annual earnings of gig workers to cost of living per capita, tipping rates and worker classification laws per state.
In order to identify the best states for gig workers, Agents Only compared the 50 states across two key dimensions, “Opportunity & Competition” and “Gig Worker Environment.”
We evaluated those dimensions using 10 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for gig workers.
We then determined each state’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order the states.
Freelancer Income Tax: Regular Weight (~5.71 Points)
Note: This metric measures the percentage of tax each state levies on its residents and non-residents who earn income in the state.
Out of Pocket Insurance Cost: Regular Weight (~5.71 Points)
Note: This metric reflects the average cost of insurance in each state.
Tipping Rate: Regular Weight (~5.71 Points)
Note: This metric reflects the average percentage that individuals tip service workers and was gathered from a Nationwide survey.
Average Disposable Income: Regular Weight (~5.71 Points)
Note: This metric measures the average amount of income an individual has left after subtracting the average cost of living for each state.
Worker Classification Laws: Double Weight (~11.43 Points)
Note: This metric measures the strictness of worker classification laws within a state that lead to gig workers being categorized as employees and thus earning more benefits.
Cost of Living: Regular Weight (~5.71 Points)
Note: This metric measures the cost of living for an individual in each state.
Average Annual Earnings: Double Weight (~20 Points)
Note: This metric reflects the average annual earnings that gig workers earned in 2022.
Current Competition: Double Weight (~20 Points)
Note: This metric reflects the per capita amount of gig workers in each state.
Growth in Gig Workers: Normal Weight (~10 Points)
Note: This metric reflects the growth rate of gig workers for the past two years.
Concentration of Restaurants + Retail: Normal Weight (~10 Points)
Note: This metric reflects the per capita amount of restaurants and retail establishments in each state.