Gig workers make up one quarter of the workforce: Study
Unfortunately, gig workers struggle to pay for housing, food and health care at measurably higher rates than their counterparts.
A new study finds that a significant number of Americans are engaged in “nonstandard” work arrangements—such as “gig” or freelance work—and that these workers are more likely to suffer economic hardships, including having trouble paying for health care or housing.
The report from the Urban Institute and the Robert Wood Johnson Foundation (RWJF) found that the growing number of gig workers are facing limitation of benefits, or no benefits at all, in the areas of health insurance, paid leave, overtime pay, and minimum wage requirements.
Related: Retirement security for gig workers shaky, even with spouse’s employer-sponsored plan
“Individuals in nonstandard work arrangements, including temporary work, contract positions, and those in the “gig” economy, struggle to pay for housing, food, and health care at measurably higher rates than their counterparts in more traditional fields and professions,” said an overview of the study on the RWJF website.
The challenge of defining nonstandard work
The report noted that there is no single definition of nonstandard work, but many workers and employers are very familiar with the concept. For this study, researchers included contingent work (work on a single project, or for a fixed time, or on a temporary basis), alternative work (usually contract or freelance workers), and informal work (usually service work such as childcare, house cleaning, or maintenance).
The study found that as of December 2020, just over 25% of Americans were engaged in some form of nonstandard work, and one in five (19%) listed nonstandard work as their main job. Those numbers may have been affected by COVID and the economic slowdown caused by the pandemic, since in 2019, 29% said they participated in nonstandard work, and 21% listed gig work as their main job.
Nonstandard work is more common among low-income workers: with workers whose incomes are below 200 percent of the federal poverty level (FPL), 44% reported nonstandard work arrangements in December 2020, and 36% reported nonstandard work as their main job. In addition, workers with nonstandard jobs were underemployed: those workers were more likely than traditional workers to report usually working fewer than 35 hours per week and wanting to work more hours.
A higher level of hardship
The study noted that gig workers were more likely to experience economic hardship than workers with traditional employment, even when comparing low-income workers. “Though we do not assess the causal relationship between types of employment arrangement and family well-being, our findings highlight the precarious economic circumstances of many adults with nonstandard work arrangements,” the study said. “Compared with adults with traditional jobs, these workers are more likely to struggle with insufficient work hours; difficulties paying for food, housing, and health care; and limited access to health insurance.”
Health insurance was one significant area of difference for nonstandard workers, compared with those who have traditional employment. The study found that workers in traditional jobs were much more likely to have an employer-sponsored plan (81%) than gig workers (55%). In addition, workers with nonstandard jobs were more likely to report unmet needs for medical care due to costs, especially those with lower incomes. For workers at more than 400% of FPL, 27% of gig workers reported unmet health care needs due to cost, while 21% of workers in traditional jobs reported the same.
The paper concluded by suggesting that policymakers pay closer attention to this growing type of employment and the unique challenges it creates. The researchers noted that public programs such as Medicaid may help fill in some gaps but added that income guidelines and work requirements of some social programs can be problematic, since gig workers often have fluctuating work assignments and incomes.
“Policy solutions are being considered and studied that would provide benefits as part of nonstandard work, reduce the misclassification of workers as independent contractors when they should be considered employees, and expand the definition of who is considered an employee,” the report said. Changes could also be made to public programs, the report added. “Policymakers, program administrators, researchers, and advocates could work together to develop creative solutions for these challenges, including developing systems for determining program eligibility for people with nonstandard work in ways that both support the programs’ needs for accountability and minimize burdens on programs and participants.”
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