Many Americans take jobs without employer benefits such as health care or paid vacation.
Many people came gig work than before, but because these jobs often do not provide employer benefits, their proliferation could exacerbate inequality for millions of Americans.
The number of people working unusually in the U.S. rose to a record 51 million this year, an unprecedented 34 percent jump compared to 2020, according to new data from MBO Partners, a company that provides business solutions to the independent worker and extends long -term group learning. These classes of workers – which include contract workers, self -employed people, temporary and on -call workers, and those who get temporary jobs through online apps or markets – now equal to one -third of Working in the US.
Gig work transferred risk from employers to employees and may lead to financial instability for those who do so, resulting in even more economic and psychological stress than regular work. Most obviously, independent work does not include many of the protections afforded by conventional work. These include things like minimum wage, overtime, paid parental leave, and employer-provided health care. If people’s gig work doesn’t pay enough to pay the extra independents, it can put people at a severe economic disadvantage compared to regular employees.
However, there is independent work, It offers workers the flexibility to choose, to some extent, what, when, and where their work.
While advocates and some policymakers are actively trying to ensure full-time employment benefits for independent workers, progress has been sparse and out of line. California’s landmark bill AB 5 made multiple contractors employees and provided them with the same benefits – but soon after it was signed into law, Proposition 22, a voting move sponsored by gig companies, passed and saved many gig companies from considering their employees as employees. The battle in California is not over; in August, The California Supreme Court dismissed Prop 22 and made it unenforceable, but gig companies say they will appeal.
Meanwhile, the march towards independent employment continues though.
Growth in business registrations for companies without employees (i.e., an individual selling products on eBay or freelancers who found graphic design work through Upwork) surpassed the paid job. The average weekly sign-up with the Freelance Union, a nonprofit that promotes and provides resources to the growing independent workforce, has grown 300 percent since the start of the pandemic.
While independent employment has grown amid all employment conditions, it is growing most rapidly for people who do occasional (frequent, but no set hours per week) independent work. Those ranks grew 51 percent, to 24 million people. Many of them do what is commonly thought of as gig work: jobs demanded from platforms like Uber Eats or freelance job sites.
The work found through online markets is important for part-timers and full-timers as well. About 40 percent of all independent workers report finding jobs using online marketplaces, up from 27 percent by 2020.
The rise of independent employment has occurred over decades and for a variety of reasons, from the breakdown of traditional employment to the proliferation of online platforms connecting people to this type of work. Like many trends, it was accelerated by the pandemic – economic instability has historically increased independent employment – but it has shown no signs of disappearing once the pandemic is over. And so the jumping of the U.S. gig workers is something we need to pay attention to.
Why do people choose to work gigs?
Despite a loudness economic recovery, there are still 6 million fewer American employees than there were pre-pandemic, according to data from the Bureau of Labor Statistics. Many of those have to go into independent work – which is often missed by BLS data – to get paid.
Other independent workers have regular jobs, but those jobs don’t give them enough money. Nearly three-quarters of new part-time independents in the MBO survey said they took independent work to supplement their income.
“Satisfying income that has done well is becoming increasingly difficult,” Steve King, an MBO board member and a future employment expert, told Recode. “In our world, it’s very difficult for many people to hit their monthly target.”
Low wages are not the only shortcomings of regular work.
“For the most part, what we’ve seen over the past four and a half decades has been a huge erosion in workers’ leverage in a way that has led to less quality work for much of the luck of our labor market: little salary, short benefits, poor hours, poor working conditions, ”Heidi Shierholz, director of think tank policy at the Economic Policy Institute and former chief economist at the U.S. Labor Department, told Recode.
Most independent workers (63 percent) consider working independently to be completely their own option. But Shierholz said the choice is not because independent work is better.
“We know the quality of it [independent] The jobs they say they choose are always bad, ”Shierholz said. “And that means their other choices, too, are really serious.”
However, about 77 percent of independent workers in the MBO study said they were satisfied with their arrangements, 10 percent points higher than traditional job owners.
Working at a gig is a way for people to have control over what their job requires, greater flexibility in when and where they work, and a better work-life balance. Perks like the ability to work remotely are accomplished especially in-demand during the pandemic, where people thought of work first for most of their lives. Such work is even more important people with child care or elderly care responsibilities, or for people with disabilities where regular employment is difficult.
“I think one of the great things is that working on the online platform really enables people who are looking for more flexibility,” Adam Ozimek, chief economist at freelancing platform Upwork, told Recode. “A lot of people have tasted working away this year and they see the flexibility that comes with it, and they like it even more.”
An increasing proportion of traditional employees (29 percent) even view independent work as less risky than they are, according to the MBO. Thought by two-thirds of independent workers.
Independent work is sometimes easy to get. The rise of apps or platforms like TaskRabbit and Fiverr has made the process of finding independent work that much less difficult by centralizing and simplifying the process of achieving it.
Then there is the issue of misclassification that drives the growth of independent workers. Industries as far as construction and ride-hailing are growing in number calling their workers contractors rather than employees. The difference, while sometimes legal doubt, economically beneficial. Employees can save about 25 percent by transferring employees to contract workers, according to estimates from the Economic Policy Institute. The savings come from employers not having to pay for things like unemployment insurance, workers ’compensation, and paid vacation.
How can you protect the growing ranks of independent workers?
The absence of protections such as unemployment insurance or health care provided by the employer means that events such as an accident, new child, or a global pandemic can negatively affect to independent workers rather than traditional ones.
“Freelancers don’t have a social safety net to rely on so they can get through the weeks or months they’re out of work,” Rafael Espinal, executive director of the Freelancers Union, told Recode.
The union is one of many advocates working to create something called portable benefit so that independent workers can get things like paid vacation, unemployment insurance, retirement plans, and affordable health care, regardless of their working status.
Currently, fewer than 10 states guarantee paid work leave for new parents that will include gig workers. Biden suggested American Families Plan create a “nationally comprehensive” paid family leave plan that the Freelancers Union expects to include freelancers. The proposal is still being debated in Congress, so even if it passes, what the end of it will be is up in the air. Independent workers not covered by the Family and Medical Leave Act, which provides employment protection to workers on unpaid leave.
“If the budget passes, we will make sure that independent workers are included in the implementation of the program,” Espinal said. “It doesn’t have to be a difficult lift given that many states are successfully implementing a similar program.”
And paid travel is just the tip of the iceberg in terms of benefits. It is not enough to address all the needs of the rapidly growing number of freelance and independent workers, who represent a large portion of the U.S. workforce.
Espinal believes the job is on the government to protect independent workers.
“If it turns out to be unsustainable, it’s because the federal government hasn’t acted,” Espinal said. “I think the silver line in this pandemic is that it has shocked the federal and state governments to the point where they have to react and see how they create a safety net for millions. people who are accustomed to having no one. “