Imagine an economy where a significant portion of the workforce transitions from stable, long-term employment to more insecure, short-term 'gig' work. In a model representing the real wage that firms must offer to secure effort from employees at various levels of economy-wide employment, what is the most likely consequence of this trend and why?

Gig Economy's Impact on Worker Incentives

The proliferation of app-based freelance platforms, which offer flexible but often insecure work arrangements, strengthens the bargaining position of the average worker. This empowerment leads to an upward shift in the curve that represents the real wage firms must pay at each level of employment to secure adequate worker effort.

Labor Market Impact of a New Ride-Sharing App