The U.S. Labor market is undergoing a structural shift as digital platforms increasingly connect workers with opportunities, resembling a dynamic marketplace rather than traditional employment, according to findings discussed in a recent PYMNTS podcast. The shift is driven by a growing require for income stability and flexibility, even as wage growth slips below inflation.
PYMNTS CEO Karen Webster, in a discussion with WorkWhile and Ingo Payments executives, highlighted a divergence in financial confidence between traditional workers and those participating in the “Labor Economy” – a segment comprised of roughly 60 million hourly workers earning $50,000 or less annually. “The data suggests that we’re not operating in a single labor market,” Webster stated. “Stability of income, mobility and liquidity…are the forces that shape confidence more than the mere existence of a job.”
WorkWhile CEO Simon Khalaf emphasized the historical importance of labor in wealth creation, referencing Adam Smith’s “Wealth of Nations.” “It is through labor that all wealth has been established. It is not through gold nor silver. It is the hard work of people,” Khalaf said. However, he noted that the organization of that labor is changing, with platforms facilitating a more fluid connection between workers and demand.
Recent Wage to Wallet Index data indicates that wage growth has fallen below the rate of inflation. In response, workers are not necessarily seeking new employers, but are instead increasing their working hours. WorkWhile’s platform data shows workers are “trading wage growth with more working hours,” Khalaf explained. This behavior echoes a long-standing pattern for hourly workers, who often balance multiple jobs to meet expenses, according to Ingo Payments CEO Drew Edwards.
“Whether it was early customers we served or even people in my own family, hourly workers have always worked extra hours or more than one job to make ends meet,” Edwards said. However, platforms are now easing some of those pressures by allowing workers to scale their hours more easily and gain greater control over their schedules. “They get the ability to manage when they work, how much they work, where they work,” Edwards added.
This shift towards flexible work is also raising expectations around the speed and reliability of payments. Edwards noted that traditional employment structures often left workers with limited control over income timing. “In that world, [the employers] control when they work, how many hours they get and what they get paid,” he said. The need for immediate access to funds is driving adoption of modern payment rails, with workers increasingly willing to pay for faster payouts to cover unexpected expenses.
Digital platforms are functioning as two-sided marketplaces, matching workers with employers in a system that resembles an open market. Edwards described this as providing workers with “the opportunity to actually find market wage rate based on true supply and demand.” WorkWhile exemplifies this dynamic, allowing workers to accept shifts based on total pay and enabling employers to adjust compensation in real-time to meet fluctuating labor demand. Khalaf cited an example of a sudden surge in demand for bartenders during a Taylor Swift concert, which the platform was able to quickly address.
The speed of payment is becoming a critical factor for workers managing tight budgets. Edwards explained that the decision to take out a loan or work additional shifts often depends on when funds will be available. “When they’re sitting there with that unexpected expense and evaluating whether to travel find a loan or do more work, inherent in that decision is ‘when will I get paid,’” he said. This has led to a rise in same-day pay as a central feature of platform-based labor systems.
The Wage to Wallet Index also suggests that workers demonstrate a high degree of loyalty to platforms, with a 98% continuation rate observed in February. This indicates that workers value the reliability and stability these systems provide. Artificial intelligence (AI) is beginning to play a role in matching workers with opportunities. WorkWhile recently introduced a tool that identifies transferable skills, helping workers discover roles they may not have previously considered. “You’d be surprised how many bartenders we have discovered among drivers,” Khalaf said. He envisions AI acting as a digital assistant, helping workers manage both income and expenses by predicting job market trends.
Ingo Payments’ Edwards emphasized the broader impact of these changes, stating, “This thing you’re building is bringing them into the light,” referring to workers who historically operated outside traditional financial systems. The Labor Economy, as defined by the Wage to Wallet Index, is not solely about employment, but about access to opportunity, the timing of income, and the tools that help workers navigate a changing financial landscape.
